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SKOL Breweries Limited

Board of DirectorsBoard of DirectorsBoard of DirectorsBoard of DirectorsBoard of Directors

Mr. Ari Mervis - Chairman

Mr. Jonathan Andrew Kirby

Ms. Sue Clark

Mr. T.S.R. Subramanian

Mr. Richard (Pete) L Lloyd Upto 23.02.2009

Mr. Jean-Marc Delpon de Vaux Managing Director

Statutory AuditorsStatutory AuditorsStatutory AuditorsStatutory AuditorsStatutory Auditors

BSR & Co.,

Chartered Accountants

Maruthi Info-Tech Centre

11-12/1, Inner Ring Road

Koramangala, Bangalore 560 071

BankersBankersBankersBankersBankers

Standard Chartered Bank

ABN Amro Bank

Citi Bank

Societe Generale

ICICI Bank Limited

Audit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeAudit Committee

Mr. Jonathan Andrew Kirby

Mr. Ari Mervis

Mr. Richard (Pete) L LloydUpto 23.02.2009

Mr. Jean-Marc Delpon de Vaux

Registered OfficeRegistered OfficeRegistered OfficeRegistered OfficeRegistered Office

No.1, Mahal Industrial Estate

Mahakali Road

Andheri (East)

Mumbai 400 093

Corporate OfficeCorporate OfficeCorporate OfficeCorporate OfficeCorporate Office

Jalahalli Camp RoadYeshwanthpur

Bangalore-560 022

Registrar & SharRegistrar & SharRegistrar & SharRegistrar & SharRegistrar & Share Te Te Te Te Transfer Agentransfer Agentransfer Agentransfer Agentransfer Agent

Sharepro Services (India) Pvt Ltd

Samhita Warehousing Complex

Gala No-52 to 56, Bldg No.13 A-B

Near Sakinaka Telephone ExchangeAndheri Kurla Road, Sakinaka

Mumbai 400 072

UnitsUnitsUnitsUnitsUnits

Charminar Breweries, Medak, AP

Haryana Breweries, Sonepat, Haryana

Mysore Breweries, Bangalore, Karnataka

Pals Distilleries, Aurangabad, Maharashtra

Rochees Breweries, Neemrana, Rajasthan

Central Distilleries & Breweries, Meerut, UP

East Coast Breweries & Distilleries, Cuttack, Orissa

Malabar Breweries, Chalakudy, Kerala

SICA Breweries, Pondicherry



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Notice

NOTICENOTICENOTICENOTICENOTICE is hereby given that the 20th

Annual General Meeting of the membersof the Company will be held at M.C. GhiaHall, Bhogilal Hargovindas Building, 2ndfloor, 18/20, K. Dubash Marg, BehindPrince of Wales Museum, Kala Ghoda,Mumbai 400 001 on Tuesday, the 15thSeptember, 2009 at 3.00 p.m. to

transact the following business:

Ordinary Business:Ordinary Business:Ordinary Business:Ordinary Business:Ordinary Business:

01. To receive, consider and adopt theAudited Balance Sheet as at 31stMarch, 2009 and the Profit & Loss

Account for the year ended on that

date and the Report of the Directorsand Auditors thereon.

02. To appoint a Director in place of Ms.Sue Clark, who retires by rotation atthis meeting and being eligible,offers herself for re-appointment.

03. RESOLRESOLRESOLRESOLRESOLVED THAVED THAVED THAVED THAVED THATTTTT M/s. BSR & Co,

Chartered Accountants, who retireat the conclusion of this AnnualGeneral Meeting be and are herebyappointed as Statutory Auditors ofthe Company till the next AnnualGeneral Meeting at remuneration to

be fixed by the Board of Directorsand billed progressively.

Special Business:Special Business:Special Business:Special Business:Special Business:

04. To consider increase in BorrowingPowers.

To consider and if thought fit, topass, with or without modifications,the following Resolution as a SpecialResolution:

RESOLRESOLRESOLRESOLRESOLVED THAVED THAVED THAVED THAVED THATTTTT pursuant toSection 293 (1)(d) of the Companies

Act, 1956 and other enablingprovisions, if any, of the said Act,consent be and is hereby accordedto the Board of Directors of the

Company for borrowing any sum orsums of money from time to time

from one or more body corporate,banks or financial institutions or thepublic by way of cash, creditadvances, deposits or other loanswhether secured or unsecured bymortgage, charge, hypothecation orpledge of the Companys assets andproperties whether movables and/or

immovables or stock-in-trade(including book debts, bills, rawmaterials, stores and spare partsand components in stock or intransit) work-in-progress and debts

and advances notwithstanding thatthe sum or sums so borrowedtogether with the moneys, if any,

already borrowed by the Company(apart from the temporary loansobtained from the Companysbankers in the ordinary course ofbusiness) may exceed in theaggregate the paid-up capital of the

Company and its free reserveswhich have not been set part for anyspecific purpose but so that thetotal amount upto which the moneysmay be so borrowed shall not at any

time exceed Rs.2000 Crores.05. To consider a preferential issue of

shares.

To consider and if thought fit, topass, with or without modification/sthe following Resolution as a SpecialResolution.

RESOLRESOLRESOLRESOLRESOLVED THAVED THAVED THAVED THAVED THATTTTT pursuant to theprovisions of Section 81(1A) andother applicable provisions (if any) ofthe Companies Act, 1956, theUnlisted Public Companies(Preferential Allotment) Rules, 2003

and the relevant provisions of theMemorandum and Articles of

Association of the Company,

the consent of the Company be andis hereby accorded to offer, issueand/or allot on preferential basis toSABMiller Asia B.V. upto 50000000Equity Shares of the Company ofthe face value of Rs. 10/- each at apremium of Rs.46/- per share.

RESOLRESOLRESOLRESOLRESOLVED FURVED FURVED FURVED FURVED FURTHER THATHER THATHER THATHER THATHER THATTTT T suchnew equity shares shall rank pari

passu with the existing equity sharesof the Company, except that they

shall not rank for dividend, if any,declared or paid in respect of anyfinancial year of the Company prior

to the financial year in which they arealloted and shall rank for dividendpari passu from the date of their

allotment in respect of the financialyear in which they are alloted.

RESOLRESOLRESOLRESOLRESOLVED FURVED FURVED FURVED FURVED FURTHER THATHER THATHER THATHER THATHER THATTTTTMr. Kevin Heydenrych, Mr. GobindChandiramani, Mr. DeepakKewalramani and Mr. S.M. Pramod

be and are hereby jointly and/orseverally authorized to negotiate,

execute and deliver any agreement,letter, deed or document or anyamendments or modifications

thereto in connection with theaforesaid preferential issue of sharesin favour of SABMiller Asia B.V. and

to sign, execute, deliver and/or file allrelevant forms, filings, reports,documents, etc., required by anyapplicable regulations including withany regulatory authorities or anauthorized dealer in terms of theIndian exchange control regulations.

BY ORDER OF THE BOARD

Pramod S MCompany Secretary

Date:8th July, 2009Place : Bangalore

6-7


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NOTES:NOTES:NOTES:NOTES:NOTES:

01. A member entitled to attend andvote at the meeting is entitled to

appoint a proxy to attend and voteon a poll in his/her stead. A proxyneed not be a member of theCompany. Proxies in order to beeffective must be deposited at theregistered office of the Company notless than forty-eight hours before themeeting. A blank proxy form is

enclosed.

02. The Register of Members and theShare Transfer Books of theCompany will remain closed from1st September 2009 to 15thSeptember 2009 (both days

inclusive).

03. For convenience of members anattendance slip is also annexed.

Members are requested to affix theirsignature at the space providedtherefore and hand over the same at

the place of Meeting. The proxy of amember should mark on theattendance slip as Proxy.Members are also requested tobring their copies of the Annualreport to the venue of the Meeting.

04. All queries relating to non-receipt ofshare certificates after transfer/transmission/dematerialization/rematerialisation, mandates, changeof address, nomination etc. may be

sent to the Registrar & ShareTransfer Agents, M/s ShareproServices (India) Pvt. Ltd, Samhita

Warehousing Complex, Gala No-52to 56, Bldg No.13 A-B, NearSakinaka Telephone Exchange,

Andheri Kurla Road, Sakinaka,Mumbai-400 072, Telephone: 022-67720300/67720400,

Fax No: 022-28591568/28508927,E-Mail: [email protected]

05. Pursuant to Section 205C of theCompanies Act, 1956 all unclaimeddividends upto the Financial Year2000-2001 have been transferred tothe Investor Education andProtection Fund. Members of theerstwhile Mysore Breweries Limitedwho have not yet claimed their

Dividend for the financial year 2001-2002 and thereafter, may claim fromthe Company before the same istransferred to the Fund. It may benoted that no claims shall lie againstthe Company or the Fund in respectof individual amounts which wereunclaimed and unpaid for a period of

7 years and transferred to the Fundand no payment shall be made inrespect of any such claim.

Explanatory Statement pursuant toExplanatory Statement pursuant toExplanatory Statement pursuant toExplanatory Statement pursuant toExplanatory Statement pursuant to

Section 173(2) of the Companies Act,Section 173(2) of the Companies Act,Section 173(2) of the Companies Act,Section 173(2) of the Companies Act,Section 173(2) of the Companies Act,1956.1956.1956.1956.1956.

Item Nos. 2, 4 and 5

A brief resume of the Directors offeringthemselves for re-election is given below:

02. Ms. Sue Clark is a Bachelor ofScience (Hons) & MBA. She joinedSABMiller plc in 2003 as Corporate

Affairs Director. Prior to this, she held

a number of senior roles in UKCompanies, including Director ofCorporate Affairs for Railtrack Group

and Director of Corporate Affairs forScottish Power plc.

Except for Ms. Sue Clark, no other

Director is interested in the aforesaidResolution.

04. At the Annual General Meeting of theCompany held on 10th September,2008, the Members empowered theBoard of Directors under Section293(1)(d) of the Companies Act,1956 to borrow monies for thebusiness purposes of the Companyup to a limit of Rs.1500 Crores.

Keeping in view the Companysbusiness requirements and itsinvestment and growth plans, it isconsidered desirable to increase thesaid borrowing limits to Rs.2000Crores as outlined in the resolution.

In terms of the provisions of Section293 (1) (d) of the Companies Act,1956, approval of the members isbeing accordingly sought throughresolution under item no.04 for suchincrease in limits.

05. The Company proposes to issue andallot, on a preferential basis upto50000000 equity shares of facevalue of Rs.10/- each to SABMiller

Asia B.V. at a premium of Rs. 46/-per share (based on the valuationreport) which requires shareholdersapproval under Section 81 (1A) of

the Companies Act, 1956.

Information as required underUnlisted Public Companies(Preferential Allotment) Rules, 2003is given below.

a. The price of price band at whichallotment is proposed: The Equity

Shares of Rs.10/- each will beallotted at a premium of Rs.46/- perShare.

b. The relevant date on the basis ofwhich price has been arrived at:

Valuation as at 31st March, 2009 and

the rate of the eariler preferentialaccounts.

c. The objects of the issue throughpreferential offer: To issue EquityShares of the Company to SABMiller

Asia B.V. for cash and to utilize themoney received hereunder for thepurpose of paying down some of its

debts and for other corporatepurposes.

Children of a culture born in a water-richenvironment, we have never really learned how

important water is to us. We understand it,

but we do not respect it.


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CategoryCategoryCategoryCategoryCategory Pre IssuePre IssuePre IssuePre IssuePre Issue Post IssuePost IssuePost IssuePost IssuePost Issue

No of Shares % No of Shares %

AAAAA PrPrPrPrPromoteromoteromoteromoteromoters holdings holdings holdings holdings holding 229384473 99.22 279384473 99.36

Sub totalSub totalSub totalSub totalSub total 229384473229384473229384473229384473229384473 99.2299.2299.2299.2299.22 279384473279384473279384473279384473279384473 99.3699.3699.3699.3699.36

BBBBB Non-Promoters HoldingNon-Promoters HoldingNon-Promoters HoldingNon-Promoters HoldingNon-Promoters Holding

Institutional InvestorsInstitutional InvestorsInstitutional InvestorsInstitutional InvestorsInstitutional Investors

a Mutual Funds and UTI 2240 0.00 2240 0.00

b Banks, Insurance Co, FI 4008 0.00 4008 0.00

c FII - - - -Sub totalSub totalSub totalSub totalSub total 62486248624862486248 0.000.000.000.000.00 62486248624862486248 0.000.000.000.000.00

OthersOthersOthersOthersOthers

a Private Corporate Bodies 73192 0.03 73192 0.03

b Indian public 1616507 0.70 1616507 0.57

c NRI 103325 0.04 103325 0.04

d Any other - - - -

Sub totalSub totalSub totalSub totalSub total 17930241793024179302417930241793024 0.780.780.780.780.78 17930241793024179302417930241793024 0.640.640.640.640.64

TTTTTotalotalotalotalotal 231183745231183745231183745231183745231183745 100.00100.00100.00100.00100.00 281183745281183745281183745281183745281183745 100.00100.00100.00100.00100.00

d. The class or classes of persons to

whom the allotment is proposed tobe made: The allotment will be madeto SABMiller Asia B.V.

e. Intention of promoters/directors/key

management persons to subscribeto the offer: SABMiller Asia B.V. hassignified its intention of subscribingto the issue.

f. Share holding pattern of promotersand others classes of shares before

and after the offer: The shareholdingpattern of the Company before andafter the issue is set out below

g. Proposed time within which the

allotment shall be completed: Withinone year from the date of the AGM

h. Whether a change in control isintended or expected: There will be

no change in control of the Companyafter the preferential issue.

None of the Directors of the Companyare deemed to be interested in the saidresolution.

The Board recommends the adoption of

the resolution.

BY ORDER OF THE BOARD

Pramod S MCompany Secretary

Registered office:1, Mahal Industrial Estate, MahakaliRoad, Andheri (East), Mumbai-400 093

Place: BangaloreDate:8th July, 2009

Notice

There are a number of ways to save water,and they all start with you.

8-9


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Dear Members,

Your Directors have pleasure in submitting their report and the Statement ofaccounts for the year ended 31st March 2009.

FINANCIAL RESULTS

Financial Year Financial Year2008-2009 2007-2008

Gross Revenue 2171.91 1766.45

Profit/(Loss) before taxation (72.57) 40.85

Less: Provision for taxation (7.70) 6.37

Profit/(Loss) after taxation (64.88) 34.48

Surplus/(deficit) brought forward from previous year (95.22) 129.69

Balance carried to Balance Sheet 160.09 95.21

(Rupees in Crores)

OPERAOPERAOPERAOPERAOPERATIONSTIONSTIONSTIONSTIONS

The turnover and volumes of yourCompany during the year 2008-09 hasconsiderably increased. The turnover

increased by 23% over the previous yearto Rs.2172 Crores from Rs.1766Crores. The turnover has increased by6% as a result of entering into a leasearrangement with a brewery which earlier

was a contract bottling arrangement.The Company however reports a loss forthe year on account of the following:

1. A one time charge of Rs. 34 Croresdue to change in accounting policy ofcontainers. (See Significantaccounting policies Note 1.5)

2. The new brewery in Haryana wascommissioned at the end of last yearas a result of which the depreciationcharged to the Profit and Lossaccount has increased.

3. The Interest cost has gone up 182%

due to increase in borrowings and theinterest rates as compared toprevious year.

4. Cost pressures on account of risingcommodity prices and glass bottles.

5. Inability to price in many marketswhere selling prices are constrained

by regulations.

6. Stand off in AP leading to stoppageof production and supply for 38 daysduring peak in the beginning of thefinancial year.

A sum of Rs.411.26 Crores has been

invested in upgrading existing plant andmachinery and in developing capacity.

There has also been continuousupgrading and implementation of bestpractices at all units to increaseproductivity and bring down the cost of

production.

Your Board enjoys the unqual ifiedsupport of all its financiers whoseconfidence in the future of your Companyis evidenced by the fact that allborrowings have been made without the

bankers taking any charges over any ofyour Companys assets. As such themajority of the borrowings are short termand renewed from year to year.Observations of the auditors are selfexplanatory.

DIVIDENDDIVIDENDDIVIDENDDIVIDENDDIVIDEND

As the Company has incurred loss duringthe year, the Directors do notrecommend any dividend on the equitycapital.

WWWWWAAAAATER MANAGEMENT IN INDIATER MANAGEMENT IN INDIATER MANAGEMENT IN INDIATER MANAGEMENT IN INDIATER MANAGEMENT IN INDIA

Your Companys commitment tosustainable development is ongoing.It is a core part of the organisations

business. It underpins our ability togrow and our license to operate.Water is one of our top sustainabledevelopment priorities.

Given the fact that this key raw materialfor our Industry is a stressed resource itsscarcity and quality are becomingincreasingly critical issues of immediaterelevance to the Company.Conservation of water is one criticalelement of our commitment to deliverbest in class performance within oursustainable development framework.

The organisation is committed to sound

water management practices throughoutits global operations in a manner thattakes account of local geographical,environmental and social factors. This isreflected in the 5 R water management

strategy adopted by the group.

In India the implementation of 5Rstrategy has seen internal measures toreduce, recycle and reuse water at allour breweries.

Water is life's mater and matrix, mother and medium.There is no life without water.

Directors Report10-11


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Our operations have been engaged in

consistently reducing water consumptionin the brewing process, year by year thetrends indicate a reduction in overallwater consumption from 26.2 million HLin F08 to 23.6 million HL in F09.

This is despite growing volumes.

Your Company committed to reducewater waste in our breweries and has

set itself the target of reducing our water

usage to 3.5 litres used to make litre ofbeer before the year 2015.

We recognise that water issues are bynature cross-community and crossboundary, which therefore cannot bemanaged simply within the fence lines ofour own operations. Therefore we havestarted external interventions in

partnerships with NGOs, communitiesand local governments striving to buildlong term sustainable partnerships toaddress local water issues.

Moving towards a country wide

structured watershed mapping processto understand the water availability andquality across all our operations forfuture business planning, we havecompleted watershed mapping for threesites in India. The data will also be usedto assess the opportunity to manage

these watersheds for the long termsustainability of the community.

Conservation through rain waterharvesting is practiced inside ourbreweries. We have also commencedwater replenishing initiatives within thecommunities. We have embarked upon a

natural recharge initiative near ourRochees Brewery in the water stressedregion of Alwar district, Rajasthan in

Northern India. The ground water

recharge initiative, launched in October2008, is currently the largest in thisregion. It is expected to recharge 300million li ters of water a year- the sameamount as extracted by the brewerysborewell pumps. Spread over acatchment expanse of about 120hectares the design involves the

construction of three check dams in awasteland area to facilitate naturalrecharge.The key strength of theThe key strength of theThe key strength of theThe key strength of theThe key strength of the

project lies in demonstrating a lowproject lies in demonstrating a lowproject lies in demonstrating a lowproject lies in demonstrating a lowproject lies in demonstrating a low

cost technology enabling naturalcost technology enabling naturalcost technology enabling naturalcost technology enabling naturalcost technology enabling natural

recharge (as against artificial throughrecharge (as against artificial throughrecharge (as against artificial throughrecharge (as against artificial throughrecharge (as against artificial through

recharge shafts, etc).recharge shafts, etc).recharge shafts, etc).recharge shafts, etc).recharge shafts, etc).

The project is being conducted incollaboration with the apex industryorganisation CII (Confederation ofIndian Industry) and a partnerorganisation of CII, ACWADAM(Advanced Center for Water ResourcesDevelopment and Management)

specialising in ground watermanagement.

This recharge will augment the localgroundwater resources in the region.

The structures will trap the water thatwould otherwise have simply run off.

The recharge initiative assumes a greatersignificance in view of the fact that theoverall incidence of irrigation through

groundwater has increased in the regionfurther stressing the resource.

We are conducting further studies toidentify more natural recharge sites withinthe region to further augment the aquifer.

Your Company has also built 3 waterharvesting structures in the CuttackDistrict of Orissa, improving the water

availability in the region for agriculture

which is the main source of livelihood forthe farming community.

Similarly, initiatives are on in the waterstressed area of Medak District in AndhraPradesh to build capacity of thecommunity to develop sustainable water

management practices and enhancegroundwater availability throughimproved water use efficiency.

The interventions being conducted underthe leadership of ICRISAT ( InternationalCrop Research Institute for Semi Arid

Tropics) include enhancing rainwaterconservation, improving water use

efficiency and manage the water demand,while improving the livelihoods andpromoting a shift towards less waterintensive cropping patterns.

Water harvesting at Neemrana, Rajasthan

Beneficiaries of water harvesting at Neemrana, Rajasthan


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REGULAREGULAREGULAREGULAREGULATORTORTORTORTORY CHALLENGE ANDY CHALLENGE ANDY CHALLENGE ANDY CHALLENGE ANDY CHALLENGE AND

CONSTRAINTCONSTRAINTCONSTRAINTCONSTRAINTCONSTRAINT

Despite repeated request and

representations to the State procuredmonopoly in the State of AndhraPradesh no price increase has beenforthcoming. Your Company along withUnited Breweries Ltd has therefore filed aWrit Petition in the Honble High Court of

Andhra Pradesh against the repeatedrefusal of the Corporation to grant a price

increase to meet rising input costs.

As a consequence of the litigation theCorporation stopped procurement of

beer from 1st

April to mid June 2009. Thecase is still pending with the AndhraPradesh High Court.

Similarly in the State of UP the Company

was unable to effect supplies during Aprilto early June 2009.

The Government of Rajasthan has alsoreduced the number of retail outlets andhas imposed an ad valorem tax. This hasgiven a spurt to economy brands. Asyour Company does not participate inthis segment, this has adversely affected

the market share of the Company.

The above stands being taken by theCompany would have adverse short termimpact on the profitability of the businessof the Company but we believe that theywill inure long term benefits which are

immeasurable.

DIRECTORSDIRECTORSDIRECTORSDIRECTORSDIRECTORS

In accordance with the Articles ofAssociation, Ms. Sue Clark, Director of

the Company retires by rotation at thismeeting and being eligible, offer herselffor re-appointment.

Mr. Richard (Pete) L Lloyd has resignedas a Director of the Company w.e.f. 23rd

February, 2009. The Board places on

record the meritorious services renderedby Mr. Richard (Pete) L Lloyd during histenure as Director on the Board.

AUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEE

Pursuant to the provisions of Section292A of the Companies Act, 1956 an

Audit Committee has been constituted.On account of resignation of Mr. Richard(Pete) L Lloyd, the present members of

the Committee are Mr. Jonathan AndrewKirby, Mr. Jean-Marc Delpon de Vaux andMr. Ari Mervis. Mr. Jean-Marc Delpon de

Vaux Chairman of the Audit Committeewas present at the last Annual GeneralMeeting.

AUDITORSAUDITORSAUDITORSAUDITORSAUDITORS

M/s BSR & Co., Chartered Accountants,retiring Auditors, have signified theirwillingness to be reappointed asStatutory Auditors of the Company. Theyhave confirmed that their reappointment

if made will be within the limits prescribedunder Section 224(1B) of the Companies

Act, 1956. Your Directors recommendtheir appointment at the ensuing AnnualGeneral Meeting.

PUBLIC DEPOSITPUBLIC DEPOSITPUBLIC DEPOSITPUBLIC DEPOSITPUBLIC DEPOSIT

During the year, the Company has notaccepted any public deposits as definedin the Companies (Acceptance ofDeposits) Rules, 1975.

PPPPPARARARARARTICULARS OF EMPLOYEESTICULARS OF EMPLOYEESTICULARS OF EMPLOYEESTICULARS OF EMPLOYEESTICULARS OF EMPLOYEES

The details of employees covered underthe provisions of Section 217 (2A) of the

Companies Act, 1956 and the rulesframed there under, as amended to dateare attached herewith.

CONSERCONSERCONSERCONSERCONSERVVVVVAAAAATION OF ENERGY ANDTION OF ENERGY ANDTION OF ENERGY ANDTION OF ENERGY ANDTION OF ENERGY AND

TECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTION

The statement pursuant to Section 217

(1) (e) of the Companies Act, 1956 readwith the Companies (Disclosure ofParticulars in the Report of Board of

Directors) Rules, 1988 to the extentapplicable are set in the annexure hereto.

DIRECTORS RESPONSIBILITYDIRECTORS RESPONSIBILITYDIRECTORS RESPONSIBILITYDIRECTORS RESPONSIBILITYDIRECTORS RESPONSIBILITY

STSTSTSTSTAAAAATEMENT U/S 217 (2AA) OF THETEMENT U/S 217 (2AA) OF THETEMENT U/S 217 (2AA) OF THETEMENT U/S 217 (2AA) OF THETEMENT U/S 217 (2AA) OF THECOMPCOMPCOMPCOMPCOMPANIES ACTANIES ACTANIES ACTANIES ACTANIES ACT, 1956, 1956, 1956, 1956, 1956

Your Directors state that:

1. The financial statements have beenprepared in conformity with thegenerally accepted accountingprinciples and applicable accountingstandards in India.

2. The Directors have selected suchaccounting policies as are applicableand have applied them consistently

and made reasonable and prudentjudgment and estimates so as to give

a true and fair view of the state ofaffairs of the Company at the end ofthe financial year and of the profit orloss for the year.

3. The Directors have taken proper andsufficient care for the maintenance ofadequate accounting records inaccordance with the provisions of theCompanies Act for safeguarding theassets of the Company and forpreventing and detecting fraud andother irregularities.

4. The financial statements have been

prepared on the basis of GoingConcern considering the ability ofthe Company to carry on its businessin the foreseeable future.

ACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENT

Your Directors wish to place on recordtheir appreciation to employees at alllevels for their co-operation. TheDirectors would also like to acknowledge

the continued support of the CompanysBankers, Distributors, Shareholders,Customers and Suppliers.

FOR AND ON BEHALF OF THE BOARD

Jonathan Andrew KirbyDirector

Jean-Marc Delpon de Vaux

Managing Director(Bangalore)

Place: Hong KongDated: 8 July, 2009



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It is a curious situation that water,

from which life first arose, should now be threatenedby the activities of one form of that life.


16/60

DISCLOSURE AS PER THE COMPDISCLOSURE AS PER THE COMPDISCLOSURE AS PER THE COMPDISCLOSURE AS PER THE COMPDISCLOSURE AS PER THE COMPANIES (DISCLOSURE OF PANIES (DISCLOSURE OF PANIES (DISCLOSURE OF PANIES (DISCLOSURE OF PANIES (DISCLOSURE OF PARARARARARTICULARS INTICULARS INTICULARS INTICULARS INTICULARS IN

THE REPORT OF DIRECTORS) RULES, 1988.THE REPORT OF DIRECTORS) RULES, 1988.THE REPORT OF DIRECTORS) RULES, 1988.THE REPORT OF DIRECTORS) RULES, 1988.THE REPORT OF DIRECTORS) RULES, 1988.

A.A.A.A.A. CONSERCONSERCONSERCONSERCONSERVVVVVAAAAATION OF ENERGYTION OF ENERGYTION OF ENERGYTION OF ENERGYTION OF ENERGY

Energy efficiency in breweries is achieved through a process of continuousimprovement. The Company is in the process of standardizing energy efficiency

measures across its breweries to further reduce the specific energy requirementin brewing.

STEAM ENERGY PER HL OF BEER MANUFSTEAM ENERGY PER HL OF BEER MANUFSTEAM ENERGY PER HL OF BEER MANUFSTEAM ENERGY PER HL OF BEER MANUFSTEAM ENERGY PER HL OF BEER MANUFACTUREDACTUREDACTUREDACTUREDACTURED

The Company has commissioned astate-of-the-art brewery in Haryana inF09. This brewery marks a significantreduction in the specific energyrequirement and would become thebenchmark for future energy efficientbreweries.

While the positive trend in energyreduction thus far has been madepossible by operational excellence inbreweries, there is a need to adoptnewer energy efficient technologies tosustain this momentum going forward.

The Company is actively evaluatinggreener technologies for introduction inits breweries. Some of thesetechnologies are not prevalent in Indianbreweries because of various barriers,one of them being high capital cost.

The possibility of availing Carbon Credits

would certainly help the Company inpursuing greener technologies otherwiseunsustainable due to high costs.

A summary of the major measures takenby the Company at its various units areas under-

250

200

150

10050

0.0F05 F06 F07 F08 F09

Steam Energy Requirement (MJ/HL)

ELECTRICITY PER HL OF BEER MANUFELECTRICITY PER HL OF BEER MANUFELECTRICITY PER HL OF BEER MANUFELECTRICITY PER HL OF BEER MANUFELECTRICITY PER HL OF BEER MANUFACTUREDACTUREDACTUREDACTUREDACTURED

20

15

10

5

0.0F05 F06 F07 F08 F09

Steam Energy Requirement (MJ/HL)

1. Aggressive target setting inbreweries based on extensivebenchmarking.

2. Use of methane generated fromwaste water treatment as boiler fuel.

3. Fuel switch from fossil fuel to

biomass in selected breweries toreduce the carbon footprint.

4. Adopting a 5 R strategy in breweriesaimed at Replenishment, Reduce,Reuse, Recycle and Redistribute.

A rain water harvesting structure hasbeen put up in one of the breweries inthe North. This would help replenishthe water table in the region.

5. Use of treated effluent for gardeningof the factory campus by drainsystem. Use of UF & RO technologyto recycle treated effluent water at

strategic sites.

B. FOREIGN EXCHANGE EARNINGSB. FOREIGN EXCHANGE EARNINGSB. FOREIGN EXCHANGE EARNINGSB. FOREIGN EXCHANGE EARNINGSB. FOREIGN EXCHANGE EARNINGSAND OUTGOAND OUTGOAND OUTGOAND OUTGOAND OUTGO

During the year, the Company has earnedRs.16.10 Crores in foreign exchangeearnings. An amount of Rs.60.38 Croreswas incurred in foreign exchange.

FOR AND ON BEHALF OF THE BOARD

Jonathan Andrew KirbyDirector

Jean-Marc Delpon de Vaux

Managing Director(Bangalore)

Place: Hong KongDated: 8 July, 2009

The crisis of our diminishing water resources is justas severe as any wartime crisis we have ever faced.Our survival is just as much at stake as it was at the time ofany major wars or revolutions.



17/60



18/60

TTTTTo the Members of SKOL Bro the Members of SKOL Bro the Members of SKOL Bro the Members of SKOL Bro the Members of SKOL BreweriesewerieseweriesewerieseweriesLimitedLimitedLimitedLimitedLimited

We have audited the attached balance

sheet of SKOL Breweries Limited(the Company) as at 31 March 2009,the profit and loss account and the cashflow statement for the year ended on thatdate annexed thereto. These financialstatements are the responsibility of theCompanys management.Our responsibility is to express an

opinion on these financial statements

based on our audit.We conducted our audit in accordancewith auditing standards generallyaccepted in India. Those standardsrequire that we plan and perform the

audit to obtain reasonable assuranceabout whether the financial statementsare free of material misstatement.

An audit includes examining, on a testbasis, evidence supporting the amountsand disclosures in the financialstatements. An audit also includesassessing the accounting principles used

and significant estimates made by

management, as well as evaluating theoverall financial statement presentation.We believe that our audit provides areasonable basis for our opinion.

As required by the Companies (Auditors

Report) Order, 2003, as amended,(the Order) issued by the CentralGovernment of India in terms ofsub-section (4A) of Section 227 of theCompanies Act, 1956, we enclose inthe Annexure a statement on thematters specified in paragraphs 4 and 5of the Order.

Further to our comments in the Annexurereferred to above, we report that:

(i) we have obtained all the informationand explanations, which to the best

of our knowledge and belief werenecessary for the purpose of ouraudit;

(ii) in our opinion, proper books ofaccount as required by law have beenkept by the Company so far as

appears from our examination ofthose books;

(iii) the balance sheet, the profit and loss

account and the cash flow statementdealt with by this report are inagreement with the books of

account;

(iv) in our opinion, the balance sheet, theprofit and loss account and the cash

flow statement dealt with by thisreport comply with the accountingstandards referred to in sub-section(3C) of Section 211 of the Companies

Act, 1956;

(v) on the basis of writtenrepresentations received from thedirectors of the Company as on31 March 2009, and taken on record

by the Board of Directors, we report

that none of the directors isdisqualified as on 31 March 2009from being appointed as a director interms 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 ourinformation and according to theexplanations given to us, the saidaccounts give the informationrequired by the Companies Act,1956, in the manner so required andgive a true and fair view in conformity

with the accounting principles

generally accepted in India:

a. in the case of the balance sheet,of the state of affairs of theCompany as at 31 March 2009;

b. in the case of the profit and lossaccount, of the loss of theCompany for the year ended onthat date; and

c. in the case of the cash flow

statement, of the cash flows of theCompany for the year ended onthat date.

for B S R & Co.B S R & Co.B S R & Co.B S R & Co.B S R & Co.Chartered accountants

Zubin ShekaryZubin ShekaryZubin ShekaryZubin ShekaryZubin ShekaryPartnerMembership No. 48814Bangalore08 July 2009

Auditors Report16-17


19/60


Annexure referred to in the AuditorsReport to the Members of SKOL

Breweries Limited (the Company) for theyear ended 31 March 2009. We reportthat:

i. (a) The Company has maintainedproper records showing fullparticulars, including quantitativedetails and situation of fixedassets.

(b) The Company has a regularprogramme of physical verification

of its fixed assets by which all fixedassets are verified over a period ofthree years. In our opinion, thisperiodicity of physical verification isreasonable having regard to the

size of the Company and thenature of its assets. No materialdiscrepancies were noticed onsuch verification.

(c) Fixed assets disposed off duringthe year were not substantial, and

therefore, do not affect the goingconcern assumption.

ii. (a) The inventory, except for goods-in-transit and stock lying with thirdparties, has been physically verifiedby the management during the

year. In our opinion, the frequencyof such verification is reasonable.For stocks lying with third partiesat the year-end, writtenconfirmations have been obtained.

(b) The procedures for the physical

verification of inventories followedby the management are reasonableand adequate in relation to the sizeof the Company and the nature of

its business.

(c) The Company is maintaining

proper records of inventory.The discrepancies noticed onverification between the physicalstocks and the book records werenot material.

iii. (a) The Company has not granted anyloans, secured or unsecured, to

companies, firms or other partiescovered in the register maintainedunder Section 301 of theCompanies Act, 1956.

Accordingly, paragraph 4(iii)(a),4(iii)(b), 4(iii)(c) and 4(iii)(d) of the

Order is not applicable.

(b) The Company has taken a loanfrom Company covered in the

register maintained under Section

301 of the Companies Act, 1956.The maximum amount outstandingduring the year and the year-endbalance of such loan was Rs513,170,374 and Rs 211,624,493

respectively.

(c) In our opinion, the rate of interestfor the above loan taken from theCompany, listed in the registermaintained under Section 301 ofthe Companies Act, 1956 are not,prima facie, prejudicial to theinterest of the Company. Tenure

and repayment terms have not

been specified for such loans.

(d) According to the information andexplanations given to us, the tenureand repayment terms have notbeen specified for the above

mentioned loan. Consequently,we are unable to comment onparagraph 4(iii)(g) of the Order.

iv. In our opinion and according to theinformation and explanations givento us, there is an adequate internal

control system commensurate withthe size of the Company and thenature of its business with regardto purchase of inventories and fixedassets and with regard to the saleof goods. We have not observed

any major weakness in the internalcontrol system during the course

of the audit.

v. a) In our opinion and according to theinformation and explanations givento us, the particulars of contractsor arrangements referred to inSection 301 of the Companies Act,

1956 have been entered in theregister required to be maintained

under that Section.

19

Annexure to the Auditors report

b) In our opinion, and according to theinformation and explanations given

to us, the transactions made inpursuance of contracts andarrangements referred to aboveand exceeding the value of Rs. 5lakhs with any party during the yearhave been made at prices which

are reasonable havingregard to the prevailing marketprices at the relevant time.

vi. In our opinion and according to the

information and explanations givento us, the Company has compliedwith the provisions of Section 58A,Section 58AA and other relevantprovisions of the Companies Act,1956 and the rules framed thereunder/ the directives issued by the

Reserve Bank of India (asapplicable) with regard to depositsaccepted from the public.

Accordingly, there have been noproceedings before the CompanyLaw Board or National CompanyLaw Tribunal (as applicable) orReserve Bank of India or any Court

or any other Tribunal in this matterand no order has been passed byany of the aforesaid authorities.

vii. In our opinion, the Company has an

internal audit system commensuratewith its size and nature of its business.

viii. The Central Government has notprescribed the maintenance of costrecords under Section 209(1)(d) ofthe Companies Act, 1956 for anyof the products manufactured bythe Company.


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ix. (a) According to the information

and explanations given to us andon the basis of our examination ofthe records of the Company,amounts deducted/ accrued in thebooks of account in respect ofundisputed statutory dues

including Provident Fund,Employees State Insurance,Income-tax, Sales Tax/ Value

Added Tax, Wealth Tax, ServiceTax, Customs Duty, Excise Duty,Cess, and other material statutorydues have generally been regularlydeposited during the year by the

Company with the appropriateauthorities though there has been aslight delay in a few cases. Amountdue in respect of InvestorEducation and Protection Fund hasnot been regularly deposited during

the year by the Company with theappropriate authorities.

Further, since the Central Government

has till date not prescribed the amountof cess payable under Section 441Aof the Companies Act, 1956, we arenot in a position to comment upon theregularity or otherwise of theCompany in depositing the same.

According to the information andexplanations given to us, there are noundisputed amounts payable in respect ofProvident Fund, Employees StateInsurance, Income-tax, Wealth Tax,Service Tax, Customs Duty, Excise Duty,

Investor Education and Protection Fundand other material statutory dues which

were in arrears as at 31 March 2009 for aperiod of more than six months from thedate they became payable.

In respect of Sales Tax, the Company is in

process of collecting statutory forms.Management has represented that thesame would be submitted to the

authorities at the time of the assessment.

Hence payment of differential sales taxhas not been made on the statutoryforms which are pending to be collectedfor the periods for which assessmentshave not been completed.

(b) According to the information andexplanations given to us, there areno dues of Wealth Tax and Cesswhich have not been depositedwith the appropriate authorities onaccount of any dispute. Thefollowing dues of Income-tax,

Sales Tax, Service Tax, CustomsDuty and Excise Duty have not

been deposited by the Companyon account of disputes.

Name of the StatuteName of the StatuteName of the StatuteName of the StatuteName of the Statute Nature of the DuesNature of the DuesNature of the DuesNature of the DuesNature of the Dues Amount (Rs.)Amount (Rs.)Amount (Rs.)Amount (Rs.)Amount (Rs.) Period to whichPeriod to whichPeriod to whichPeriod to whichPeriod to which Forum whereForum whereForum whereForum whereForum where

the amount relatesthe amount relatesthe amount relatesthe amount relatesthe amount relates dispute is pendingdispute is pendingdispute is pendingdispute is pendingdispute is pending

Punjab Excise Act, 1914 Duty on beer loss 13,745,236 1974-75 Financialto 1990-91 Commissioner,

Haryana

Orissa and Bihar Interest on excise 3,222,705 1989 Orissa High CourtExcise Act, 1965 loan draw back

scheme

Adhesive label fees 10,877,028 2001-02 to 2004-05 Orissa High Court

Overtime wages 2,152,000 2005-06 Orissa High Courtof excise staff

Bombay Prohibition Supervision charges 550,930 1983-84 to 1988-89 Bombay High CourtAct, 1949 of excise staff

Duty on expired beer 1,037,085 2000-01 Commissioner of State Excise,Maharashtra

Karnataka Excise Duty on breakages 329,131 1997-98 to 1999-00 Karnataka HighAct, 1965 Court

Overtime wages of 6,679,691 1998-99 to 2004-05 Karnataka Highexcise staff Court

Central Excise Act, 1944 Central excise duty 70,235,608 1996-97 to 1999-00 Customs Excise

Service TaxAppellate Tribunal,Mumbai

Orissa Sales Sales Tax 92,728,022 1994-95 to 2000-01 Sales Tax Tribunal,Tax Act, 1947 Orissa

Orissa Entry Sales Tax 242,508 2000-01 Sales Tax Tribunal,Tax Act, 1999 Orissa

Delhi Sales Sales Tax 1,260,000 2002-03 to 2003-04 AssistantTax Act, 1975 Commissioner of

Commercial Taxes(Appeals), New Delhi

Annexure to the Auditors report18-19


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Annexure to the Auditors report

Bombay Sales Sales Tax 1,514,943 1992-93 Appellate Tribunal,Tax Act, 1959 Maharashtra

Sales Tax 4,139,154 1995-96 Sales Tax Tribunal,Maharashtra

Sales Tax 1,445,537 1996-97 Sales Tax Tribunal,Maharashtra

Bombay Sales Tax Act, Sales Tax 13,617,495 2001-02 Sales Tax Tribunal,1959 & Central Sales Maharashtra

Tax Act, 1956

Sales Tax 8,050,922 2002-03 DeputyCommissioner,Mumbai

Sales Tax 4,984,290 2002-03 Joint Commissioner(Appeals), Mumbai

Uttar Pradesh Penalty 185,000 2003-04 Sales Tax Tribunal,Trade Tax Act, 1948 Uttar Pradesh

Uttar Pradesh Trade Sales Tax 4,026,568 2003-04 Commissioner of Tax Act, 1948 & Central Appeals, UttarSales Tax Act, 1956 Pradesh

Andhra Pradesh General Sales Tax 3,675,677 1991-92 to 1992-93 Andhra Pradesh

Sales Tax Act, 1957 High CourtPondicherry General Sales Tax 11,982,000 1981-82 to 1984-85, Assessing Authority,Sales Act, 1967 1997-98 to 1998-99 Pondicherry

Haryana Sales Sales Tax 5,965,472 1989-90 to 1996-97, Sales Tax Tribunal,Tax Act, 1973 1998-99 to 2003-04 Haryana

Central Sales Tax Sales Tax 5,428,400 2002-03 Sales Tax Tribunal,Act, 1956 Uttar Pradesh

Sales Tax 51,114 2006-07 Joint Commissioner,Meerut

Delhi Sales Tax Act, 1975 Sales Tax 137,749 2004-05 Additional

Commissioner SalesTax, New Delhi

Uttar Pradesh Tax on Penalty 379,728 2003-04 DeputyEntry of Goods Act, 2000 Commissioner,

Meerut

Entry Tax 7,465,500 2003-04 to 2005-06 Supreme Court

Haryana Local Area Local Area 6,175,447 2000-01 to 2003-04 Chandigarh HighDevelopment Tax Act, 2000 Development Tax Court

Finance Act, 1994 Service Tax and penalty 32,129,640 2006-07 to 2007-08 Customs Excise andService Tax

Appellate Tribunal,Mumbai

Customs Act, 1962 Customs Duty 261,555 2007-08 Customs Excise andService Tax

Appellate Tribunal,Mumbai

Note: The amounts paid under protest have been reduced from the amounts demanded in arriving at the aforesaid disclosure.

Name of the StatuteName of the StatuteName of the StatuteName of the StatuteName of the Statute Nature of the DuesNature of the DuesNature of the DuesNature of the DuesNature of the Dues Amount (Rs.)Amount (Rs.)Amount (Rs.)Amount (Rs.)Amount (Rs.) Period to whichPeriod to whichPeriod to whichPeriod to whichPeriod to which Forum whereForum whereForum whereForum whereForum where

the amount relatesthe amount relatesthe amount relatesthe amount relatesthe amount relates dispute is pendingdispute is pendingdispute is pendingdispute is pendingdispute is pending


22/60

x. The Company has accumulated

losses of Rs. 1,600,944,149 at theend of the financial year which is less

than fifty per cent of its net worth.The Company has not incurred cashlosses in the financial year and in theimmediately preceding financial year.

xi. In our opinion and according to theinformation and explanations given to

us, the Company has not defaulted inrepayment of dues to its bankers.

The Company did not have anyoutstanding dues to any financialinstitutions or debenture holdersduring the year.

xii. In our opinion the Company hasmaintained adequate records incases where it has granted loans andadvances on the basis of security byway of pledge of shares.

The Company has not granted anyloans and advances on the basis ofsecurity by way of pledge of

debentures and other securities.

xiii. In our opinion and according to theinformation and explanations given tous, the Company is not a chit fund ora nidhi/ mutual benefit fund/ society.

xiv. According to the information andexplanations given to us, theCompany is not dealing or trading inshares, securities, debentures andother investments.

xv. According to the information andexplanations given to us, theCompany has not given anyguarantee for loans taken by othersfrom banks or financial institutions.

xvi. In our opinion and according to theinformation and explanations givento us, the term loans taken by the

Company have been applied for thepurpose for which they were raised.

xvii. According to the information andexplanations given to us and on anoverall examination of the balancesheet of the Company, we are of theopinion that funds raised onshort-term basis amounting toRs. 4,451,820,029 have been

used for long-term investment infixed assets.

xviii. The Company has not made any

preferential allotment of shares tocompanies/ firms/ parties covered in

the register maintained under Section301 of the Companies Act, 1956.

xix. The Company did not have anyoutstanding debentures duringthe year.

xx. The Company has not raised anymoney by public issues duringthe year.

xxi. According to the information andexplanations given to us, there was

one fraud on the Company during the

year where there was an allegationagainst an employee of the Companyfor colluding with a vendor involvingan amount of Rs. 67,000. Servicesof the employee have since beenterminated.According to theinformation and explanations given

to us, no other fraud on or bythe Company has been noticedor reported during the course ofour audit.

forB S R & Co.B S R & Co.B S R & Co.B S R & Co.B S R & Co.

Chartered accountants

Zubin ShekaryZubin ShekaryZubin ShekaryZubin ShekaryZubin ShekaryPartnerMembership No. 48814Bangalore08 July 2009

Annexure to the Auditors report20-21


23/60


Dont throw away the old bucketuntil you know whether the new one holds water.


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(Rs.)

As atAs atAs atAs atAs at As at

Schedule 31 March 200931 March 200931 March 200931 March 200931 March 2009 31 March 2008

SOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDS

Shareholders fundsShareholders fundsShareholders fundsShareholders fundsShareholders funds

Share capital 2 2,311,837,450 2,311,837,450

Reserves and surplus 3 6,140,637,748 6,406,852,856

8,452,475,198 8,718,690,306

Loan fundsLoan fundsLoan fundsLoan fundsLoan funds

Unsecured loans 4 6,170,031,896 3,774,422,006

Deferred tax liability, net 18 (15) - 63,744,036

14,622,507,09414,622,507,09414,622,507,09414,622,507,09414,622,507,094 12,556,856,34812,556,856,34812,556,856,34812,556,856,34812,556,856,348

APPLICAAPPLICAAPPLICAAPPLICAAPPLICA TION OF FUNDS TION OF FUNDS TION OF FUNDS TION OF FUNDS TION OF FUNDS

Fixed assetsFixed assetsFixed assetsFixed assetsFixed assets 5

Gross block 13,556,110,406 10,973,596,079

Less: Accumulated depreciation (2,397,970,441) (2,074,943,657)

Less: Provision for impairment of fixed assets (143,814,725) (156,563,671)

Net block 11,014,325,240 8,742,088,751

Capital work-in-progress 506,703,130 1,491,630,978

11,521,028,370 10,233,719,729

InvestmentsInvestmentsInvestmentsInvestmentsInvestments 6 11,359,225 11,359,225

Current assets, loans and advancesCurrent assets, loans and advancesCurrent assets, loans and advancesCurrent assets, loans and advancesCurrent assets, loans and advances

Inventories 7 1,650,081,511 1,183,482,865Sundry debtors 8 3,390,344,214 2,536,219,383

Cash and bank balances 9 317,395,443 311,251,107

Loans and advances 10 1,176,231,356 1,283,275,219

6,534,052,524 5,314,228,574

Current liabilities and provisionsCurrent liabilities and provisionsCurrent liabilities and provisionsCurrent liabilities and provisionsCurrent liabilities and provisions

Current liabilities 11 4,861,783,690 4,046,106,947

Provisions 12 421,930,244 413,580,309

5,283,713,934 4,459,687,256

Net current assets 1,250,338,590 854,541,318

Amalgamation adjustment reserve accountAmalgamation adjustment reserve accountAmalgamation adjustment reserve accountAmalgamation adjustment reserve account Amalgamation adjustment reserve account 1,457,236,076 1,457,236,076

Debit balance in profit and loss accountDebit balance in profit and loss accountDebit balance in profit and loss accountDebit balance in profit and loss accountDebit balance in profit and loss account 1,600,944,149 952,184,208Less: Balance in general reserve account 3 (1,218,399,316) (952,184,208)

382,544,833 -

14,622,507,09414,622,507,09414,622,507,09414,622,507,09414,622,507,094 12,556,856,34812,556,856,34812,556,856,34812,556,856,34812,556,856,348

SSSSSignificant accounting policiesignificant accounting policiesignificant accounting policiesignificant accounting policiesignificant accounting policies 1Notes to the accountsNotes to the accountsNotes to the accountsNotes to the accountsNotes to the accounts 18

The schedules referred to above form an integral part of the balance sheet.As per our report attached

forB S R & Co.B S R & Co.B S R & Co.B S R & Co.B S R & Co. forSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedChartered Accountants

Zubin ShekaryZubin ShekaryZubin ShekaryZubin ShekaryZubin Shekary Jean-Marc Delpon De Vaux Jonathan Andrew KirbyPartner Managing Director Director Membership No. 48814 (Bangalore)

Kevin Heydenrych Pramod S MChief Finance Officer Company Secretary (Bangalore) (Bangalore)

Bangalore Hong Kong08 July 2009 08 July 2009

Balance sheet22-23


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(Rs.)

Schedule For the year endedFor the year endedFor the year endedFor the year endedFor the year ended For the year ended31 March 200931 March 200931 March 200931 March 200931 March 2009 31 March 2008

IncomeIncomeIncomeIncomeIncome

Sale of manufactured goods, gross 21,622,215,155 17,367,693,602

Sale of traded goods, gross 96,894,530 296,758,472

21,719,109,685 17,664,452,074

Less: Excise duty (7,518,279,022) (6,307,912,578)

Less: Discounts (1,040,654,424) (730,233,870)

Sales, net 13,160,176,23913,160,176,23913,160,176,23913,160,176,23913,160,176,239 10,626,305,62610,626,305,62610,626,305,62610,626,305,62610,626,305,626

Income from contract bottling 143,573,120 219,335,661

Other income 13 185,950,917 281,767,214

13,489,700,27613,489,700,27613,489,700,27613,489,700,27613,489,700,276 11,127,408,50111,127,408,50111,127,408,50111,127,408,50111,127,408,501

ExpenditureExpenditureExpenditureExpenditureExpenditureCost of materials 14 6,839,899,584 3,027,155,449

Personnel costs 15 974,679,780 804,928,296

Other expenses 16 4,982,476,471 5,757,867,250

Depreciation 5 651,299,955 858,090,043

Provision for impairment of fixed assets 18 (17) (7,066,845) 117,306,243

Opening adjustment for returnable containers 18 (2) 340,493,099 -----

Borrowing cost 17 433,651,970 153,515,535

14,215,434,01414,215,434,01414,215,434,01414,215,434,01414,215,434,014 10,718,862,81610,718,862,81610,718,862,81610,718,862,81610,718,862,816

(Loss)/ profit before tax(Loss)/ profit before tax(Loss)/ profit before tax(Loss)/ profit before tax(Loss)/ profit before tax (725,733,738)(725,733,738)(725,733,738)(725,733,738)(725,733,738) 408,545,685408,545,685408,545,685408,545,685408,545,685

Provision for tax

- current tax - -

- pertaining to earlier years (reversal) (48,582,678) (37,573,724)

- fringe benefit tax 35,160,648 30,320,522

- deferred tax (credit)/ charge 18 (15) (63,744,036) 70,783,158

- wealth tax 192,269 238,542

(Loss)/ profit after tax(Loss)/ profit after tax(Loss)/ profit after tax(Loss)/ profit after tax(Loss)/ profit after tax (648,759,941)(648,759,941)(648,759,941)(648,759,941)(648,759,941) 344,777,187344,777,187344,777,187344,777,187344,777,187

Debit balance in profit and loss account brought forward (952,184,208) (1,296,961,395)

Debit balance in profit and loss account carriedDebit balance in profit and loss account carriedDebit balance in profit and loss account carriedDebit balance in profit and loss account carriedDebit balance in profit and loss account carried (1,600,944,149)(1,600,944,149)(1,600,944,149)(1,600,944,149)(1,600,944,149) (952,184,208)(952,184,208)(952,184,208)(952,184,208)(952,184,208)

over to the balance sheetover to the balance sheetover to the balance sheetover to the balance sheetover to the balance sheet

Earnings per share (par value; Rs. 10 each)Earnings per share (par value; Rs. 10 each)Earnings per share (par value; Rs. 10 each)Earnings per share (par value; Rs. 10 each)Earnings per share (par value; Rs. 10 each) 18 (6)

- Basic earnings per share (2.81) 1.52

- Diluted earnings per share (2.81) 1.49

Significant accounting policiesSignificant accounting policiesSignificant accounting policiesSignificant accounting policiesSignificant accounting policies 1

Notes to the accountsNotes to the accountsNotes to the accountsNotes to the accountsNotes to the accounts 18

The schedules referred to above form an integral part of the profit and loss account.As per our report attached

forB S R & Co.B S R & Co.B S R & Co.B S R & Co.B S R & Co. forSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries Limited

Chartered Accountants

Zubin ShekaryZubin ShekaryZubin ShekaryZubin ShekaryZubin Shekary Jean-Marc Delpon De Vaux Jonathan Andrew Kirby

Partner Managing Director Director

Membership No. 48814 (Bangalore)

Kevin Heydenrych Pramod S M

Chief Finance Officer Company Secretary

(Bangalore) (Bangalore)

Bangalore Hong Kong

08 July 2009 08 July 2009

Profit and loss account


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1. Significant accounting policies

Background

SKOL Breweries Limited (the Companyor SKOL) was incorporated as a publiclimited company under the Companies

Act, 1956 on 18 November 1988.The Company is primarily engaged in thebusiness of brewing, packaging,distribution, marketing and sale of beer.

1.11.11.11.11.1 Basis of preparationBasis of preparationBasis of preparationBasis of preparationBasis of preparation

The financial statements have beenprepared and presented under thehistorical cost convention on the

accrual basis of accounting.The financial statements have beenprepared to comply in all materialrespects with the mandatory

Accounting Standards (AS)prescribed by Companies(Accounting Standards) Rules,2006 and the relevant provisions ofthe Companies Act, 1956, to theextent applicable. These financialstatements are prepared andpresented in Indian Rupees.

1.21.21.21.21.2 Going concernGoing concernGoing concernGoing concernGoing concern

These financial statements have

been prepared on a going concernbasis, notwithstanding accumulated

losses and reliance on short termborrowings due to the followingconsiderations:

- Expected steady future growthreflected in financial projectionsprepared by the management;

- Expected continual technical andfinancial support by the SABMillergroup.

- Subsequent renewal of short termborrowings from banks.

These financial statements,therefore, do not include any

adjustments relating torecoverability and classification ofasset amounts or to classificationand amount of liabilities that may benecessary if the Company wasunable to continue as a goingconcern.

1.31.31.31.31.3 Use of estimatesUse of estimatesUse of estimatesUse of estimatesUse of estimates

The preparation of financialstatements in conformity withgenerally accepted accountingprinciples in India requires

management to make estimatesand assumptions that affect the

reported amounts of assets and

liabilities and disclosure ofcontingent liabili ties on the date ofthe financial statements and theresults of operations during thereporting period end. Actual resultscould differ from those estimates.

Any revision to accountingestimates is recognisedprospectively in current and futureperiods.

1.41.41.41.41.4 Revenue recognitionRevenue recognitionRevenue recognitionRevenue recognitionRevenue recognition

Revenue is recognised to the extent

that it is probable that the economicbenefits will flow to the Companyand the revenue can be measuredreliably.

(i)(i)(i)(i)(i) Sale of goodsSale of goodsSale of goodsSale of goodsSale of goodsRevenue from sale of

manufactured and traded goodsis recognised on transfer of allthe significant risks and rewardsof ownership to the buyer whichnormally takes place ondespatch of goods. The amount

recognised as sale is net ofsales tax, sales returns anddiscount. Sales are presented

both gross and net of exciseduty.

(ii)(ii)(ii)(ii)(ii) Income from contractIncome from contractIncome from contractIncome from contractIncome from contract

bottlingbottlingbottlingbottlingbottlingIncome from contract bottling isrecognised when the right toreceive bottling fee isestablished which normallytakes place on dispatch ofgoods by contract bottlers toits customers.

(iii)(iii)(iii)(iii)(iii) InterestInterestInterestInterestInterestInterest is recognised using thetime proportion basis taking into

account the amount outstandingand the interest rate applicable.

(iv)(iv)(iv)(iv)(iv) Sale of scrap and spent maltSale of scrap and spent maltSale of scrap and spent maltSale of scrap and spent maltSale of scrap and spent malt

Revenue from sale of scrap andspent malt is recognised ontransfer of all the significant risksand rewards of ownership to thebuyer which normally takesplace on dispatch of goods.

The amount recognised as saleis net of sales tax and salesreturns.

(v)(v)(v)(v)(v) Gain on prepayment ofGain on prepayment ofGain on prepayment ofGain on prepayment ofGain on prepayment of

deferreddeferreddeferreddeferreddeferred sales tax loansales tax loansales tax loansales tax loansales tax loanGain on prepayment of deferredsales tax loan is recognisedwhen the deferred sales tax

loan, is settled at a discounted value

as mentioned in the deferral scheme.

1.51.51.51.51.5 Fixed assetsFixed assetsFixed assetsFixed assetsFixed assets

Fixed assets are carried at cost ofacquisition or construction less

accumulated depreciation andprovision for impairment of assets.

The cost of fixed assets includesfreight, duties, taxes and otherincidental expenses related to theacquisition or construction of the

respective assets. Borrowing costsdirectly attributable to acquisition orconstruction of those fixed assetswhich necessarily take a substantialperiod of time to get ready for theirintended use are capitalised to theextent they relate to the period tillsuch assets are ready to be put to

use. Intangible assets are recordedat their acquisition cost.

Advances paid towards theacquisition or construction of fixedassets outstanding at the balancesheet date and the cost of the fixed

assets not ready for their intendeduse on such date, are disclosed ascapital work-in-progress.

Upto 31 March 2008, containers(empty bottles) were recorded asfixed assets and depreciated over a

period of two years. The Companyis a dominant/ key player in theIndian market and the policy ofrecording containers as fixed assetsis more prevalent in Internationalmarkets. Other Companies in India(i.e. competitors) record containersas inventories and not as fixed

assets. This resulted in an issue oncomparability of results andperformance. In order to ensure

comparability of financialperformance with other Companiesin India, Management, with effectfrom 1 April 2008, have changedthe policy of recording containers as

inventories which were hithertorecorded as fixed assets.Management believes that thischange will result in a moreappropriate presentation of thefinancial statements (refer note 2 of

Schedule 18).

Schedules to the financial statementsSchedules to the financial statements24-25


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Freehold land is not depreciated.Leasehold land is amortised overthe lease term. Leaseholdimprovements are amortised overthe lease term or its estimateduseful life of 5 years, whichever islower.

Pro-rated depreciation is provided

on all assets purchased or soldduring the year. Assets, costing

individually Rs 5,000 or less, aredepreciated in full in the year ofpurchase.

The useful lives of brands, which

primarily represent brandspurchased, have been determinedbased on managementsassessment of market conditions inIndia, intent to use and ability tomaintain these assets, previous

history of these brands andinternationally accepted practices.

1.61.61.61.61.6 DepreciationDepreciationDepreciationDepreciationDepreciation

Depreciation on fixed assets isprovided on the straight-line methodas per the rates and in the mannerprescribed in Schedule XIV to the

Companies Act, 1956. The rates ofdepreciation prescribed in Schedule

XIV to the Companies Act, 1956 areconsidered as minimum rates.However, where the managementsestimate of the useful life of a fixed

1.71.71.71.71.7 ImpairmentImpairmentImpairmentImpairmentImpairment

The Company periodically assesseswhether there is any indication thatan asset or a group of assetscomprising a cash generating unitmay be impaired. If any such

indication exists, the Companyestimates the recoverable amount

of the asset. For an asset or groupof assets that does not generate

largely independent cash inflows,the recoverable amount isdetermined for the cash-generatingunit to which the asset belongs. If

such recoverable amount of theasset or the recoverable amount ofthe cash generating unit to whichthe asset belongs is less than itscarrying amount, the carryingamount is reduced to itsrecoverable amount. The reductionis treated as an impairment loss and

is recognised in the profit and lossaccount.The recoverable amount is

higher of the assets net selling priceand value in use.

asset at the time of acquisition of

the asset or of the remaining usefullife on a subsequent review isshorter than that envisaged in theaforesaid schedule, depreciation isprovided at a higher rate based onthe managements estimate of

useful life/ remaining useful life.

Pursuant to this policy the following fixed assets are depreciated to their residualvalue over their estimated useful life:

Class of Assets Years

Computer equipmentComputer equipmentComputer equipmentComputer equipmentComputer equipment 4

Furniture, fittings and office equipmentFurniture, fittings and office equipmentFurniture, fittings and office equipmentFurniture, fittings and office equipmentFurniture, fittings and office equipment 6

BrandsBrandsBrandsBrandsBrands 20

BuildingsBuildingsBuildingsBuildingsBuildings 28

Computer softwareComputer softwareComputer softwareComputer softwareComputer software 4

Motor VMotor VMotor VMotor VMotor Vehiclesehiclesehiclesehiclesehicles 10

Plant and MachineryPlant and MachineryPlant and MachineryPlant and MachineryPlant and Machinery

- Chillers 5

- Crates 2

- Wooden pallets 3

- Others 14-18

After recognition of impairment loss,

depreciation is provided on therevised carrying amount of theasset, less its residual value (if any),over its remaining useful life.

If at the balance sheet date there isan indication that if a previouslyassessed impairment loss no longerexists, the recoverable amount isreassessed and the asset isreflected at the recoverable amountsubject to a maximum ofdepreciable historical cost.

An impairment loss is reversed onlyto the extent that the carrying

amount of asset does not exceedthe net book value that would havebeen determined; if no impairmentloss had been recognised.

1.8 Borrowing costs1.8 Borrowing costs1.8 Borrowing costs1.8 Borrowing costs1.8 Borrowing costs

Borrowing costs directlyattributable to acquisition orconstruction of those fixed assets,which necessarily take a substantialperiod of time to get ready for their

intended use, are capitalised. Otherborrowing costs are accounted asan expense.

1.91.91.91.91.9 InvestmentsInvestmentsInvestmentsInvestmentsInvestments

Long-term investments are carriedat cost less any other-than-

temporary diminution in the value, asdetermined by management oncommercial considerationdetermined separately for eachindividual investment.

1.101.101.101.101.10 InventoriesInventoriesInventoriesInventoriesInventories

Inventories are valued at lower of

cost and net realisable value.Cost of inventories comprisespurchase price, costs of conversion

and other costs incurred in bringingthe inventories to their presentlocation and condition.

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Maintenance spares, which are in

regular use and are not an integralpart of any fixed asset, are treatedas inventory and valued at cost.

The comparison of cost and netrealisable value is made on an item-by-item basis. The net realisable

value of work-in-progress isdetermined with reference to theselling prices of related finishedgoods in the ordinary course ofbusiness, less estimated cost ofcompletion and estimated costsnecessary to make the sale.Raw materials, packing materials

and other supplies held for use inproduction of inventories are notwritten below cost except in cases

where material prices have declined,and it is estimated that the cost ofthe finished products will exceedtheir net realisable value.

1.111.111.111.111.11Foreign exchangeForeign exchangeForeign exchangeForeign exchangeForeign exchange

Foreign exchange transactions are

recorded at the rates of exchangeprevailing on the dates of therespective transactions. Exchangedifferences arising on foreignexchange transactions settledduring the year are recognised in the

profit and loss account for the year.

Monetary assets and liabilitiesdenominated in foreign currenciesas at the balance sheet date aretranslated at the closing exchangerate on that date; the resultant

exchange differences arerecognised in the profit and loss

account.

Forward contracts and otherderivatives are entered into tohedge the foreign currency risk of

the underlying outstanding at thebalance sheet date. The premium

or discount on all such contracts

arising at the inception of eachcontract is amortised as incomeor expense over the life of the

contract. Any profit or loss arisingon the cancellation or renewal offorward contracts is recognised asincome or as expense for the

period.The exchange difference on theforward exchange contract enteredinto to hedge the foreign currencyrisk of the underlying outstanding atthe balance sheet date, is calculatedas the difference between theforeign currency amount of thecontract translated at the exchange

rate at the reporting date, or thesettlement date where thetransaction is settled during thereporting period, and thecorresponding foreign currency

amount translated at the later of thedate of inception of the forwardexchange contract and the lastreporting date. Such exchangedifferences are recognised in theprofit and loss account in thereporting period in which theexchange rates change.

For forward exchange contracts

and other derivatives that are notcovered by AS 11 and that relateto a firm commitment or highlyprobable forecast transactions,the Company has adopted the

principles of Accounting Standard(AS) 30, Financial Instruments:Recognition and Measurement witheffect from April 1, 2008. Derivativefinancial instruments, which qualifyfor cash flow hedge accounting andwhere Company has met all theconditions of cash flow hedgeaccounting, are fair valued at

balance sheet date and the resultantexchange loss/(gain) is debited/credited to the hedge reserve.

This loss/ (gain) would be recordedin profit and loss account when theunderlying transactions affectearnings. Other derivativeinstruments that relate to a firm

commitment or a highly probableforecast transaction and that do not

qualify for hedge accounting havebeen recorded at fair value at the

reporting date and the resultantexchange loss/ (gain) has beendebited/ credited to profit and lossaccount for the year.

1.121.121.121.121.12 Employee benefitsEmployee benefitsEmployee benefitsEmployee benefitsEmployee benefits

(i) Contributions to provident funds,which is a defined contributionscheme, are charged to the profitand loss account on an accrualbasis.

(ii) The Company has anarrangement with Life InsuranceCorporation of India to administer

its superannuation scheme, whichis a defined contribution scheme.

The contributions to the said

scheme are charged to the profitand loss account on an accrualbasis.

(iii) Gratuity, which is a definedbenefit scheme is provided forbased on an actuarial valuation

carried out by an independentactuary as at the balance sheetdate. Actuarial gains/ losses arerecognised immediately in theprofit and loss account and are

not deferred.

(iv) Compensated absences areprovided for based on an actuarial

valuation carried out by anindependent actuary as at thebalance sheet date.

In the previous year due to

adoption of the AS 15 - Employeebenefits (Revised 2005), the

Company has provided for longterm compensated absencesbased on actuarial valuation.Further in accordance with thetransitional provision in AS 15 -Emplyoee benefits (Revised 2005),

Rs. 13,670,268 (net of deferred tax

The methods of determination of cost of various categories of inventoriesare as follows:

Raw materials, packing materials, stores First-in-first-out (FIFO) methodand spares and traded goods

Work-in-progress and f inished goods FIFO method. Production(including goods in transit) overheads are allocated on the

basis of normal capacity ofproduction facilities.

Schedules to the financial statements26-27


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asset of Rs. 7,039,122) has been

adjusted to the general reserve. Thischange did not result in a materialimpact on the profit for the previousyear.

1.131.131.131.131.13LeasesLeasesLeasesLeasesLeases

Leases where the lessor effectivelyretains substantially all the risks and

rewards of ownership of the leasedasset are classified as operatingleases. Operating lease payments arerecognised as an expense in the profitand loss account on a straight-linebasis over the lease term.

1.141.141.141.141.14Provisions and contingentProvisions and contingentProvisions and contingentProvisions and contingentProvisions and contingentliabilitiesliabilitiesliabilitiesliabilitiesliabilities

The Company recognises a provision

when there is a present obligation as aresult of an obligating event thatprobably requires outflow ofresources and a reliable estimate canbe made of the amount of theobligation. A disclosure of a

contingent liability is made when thereis a possible obligation or a presentobligation that may, but probably willnot, require an outflow of resources.When there is a possible obligation or

a present obligation that the likelihoodof outflow of resources is remote,no provision or disclosure is made.

Provisions for onerous contracts, i.e.contracts where the expectedunavoidable costs of meeting theobligations under the contract exceedthe economic benefits expected to bereceived under it, are recognised

when it is probable that an outflowof resources embodying economicbenefits will be required to settle apresent obligation as a result ofan obligating event, based on a

reliable estimate of such obligation.

1.151.151.151.151.15TTTTTaxationaxationaxationaxationaxation

Income tax expense comprisescurrent tax (i.e. amount of tax for theyear determined in accordance withthe Income-tax law) and deferred taxcharge or credit (reflecting the tax

effects of timing differences betweenaccounting income and taxableincome for the year). The deferred taxcharge or credit and thecorresponding deferred tax liabilitiesor assets are recognised using the tax

rates that have been enacted orsubstantively enacted by the balance

sheet date. Deferred tax assets arerecognised only to the extent there is

reasonable certainty that the assets

can be realised in future; however,where there is unabsorbeddepreciation or carried forwardbusiness loss under taxation laws,deferred tax assets are recognisedonly if there is a virtual certainty ofrealisation of such assets.

Deferred tax assets are reviewed asat each balance sheet date and writtendown or written up to reflect theamount that is reasonably/virtuallycertain (as the case may be) to berealised.

The Company offsets, the current(on a year on year basis) and deferred

tax assets and liabilities, where it has alegally enforceable right and where itintends to settle such assets andliabilities on a net basis.

The Company provides for anddiscloses the Fringe Benefit Tax

(FBT) in accordance with theprovisions of Section 115 WC of theIncome-tax Act, 1961 and theguidance note on FBT issued by ICAI.

1.161.161.161.161.16Earnings per shareEarnings per shareEarnings per shareEarnings per shareEarnings per share

The basic earnings per share iscomputed by dividing the net profit

or loss attributable to equityshareholders for the year by theweighted average number of equityshares outstanding during the year.

The number of equity shares used incomputing diluted earnings per sharecomprises the weighted averageshares considered for deriving basic

earnings per share, and also theweighted average number of equityshares, which would have been issuedon conversion of all potentially dilutiveequity shares. Potential dilutive equity

shares are deemed converted as ofthe beginning of the year, unless theyhave been issued at a later date.

The potentially dilutive equity shareshave been adjusted for the proceedsreceivable had the shares beenactually issued at a fair value(i.e. the average market value of theoutstanding shares). In computing the

dilutive earnings per share, onlypotential equity shares that are dilutive

and that either reduces the earningsper share or increases loss per shareare included.

1.171.171.171.171.17 Employee stock compensationEmployee stock compensationEmployee stock compensationEmployee stock compensationEmployee stock compensation

costcostcostcostcostThe Company applies intrinsic valuemethod of accounting for stockoptions granted by the ultimateholding Company to the employeesof the Company after 1 April 2005.

The intrinsic value of the employee

services received in exchange for thegrant of such options is recognised as

an expense. The amount recognisedis spread over the vesting periodwhich is also the period over whichsome of the scheme performancecriteria relate. At each balance sheet

date, the estimates of the number ofoptions that are expected to becomeexercisable are revised.It recognises the impact of therevision of the original estimates,if any, in the profit and loss accountover the remaining vesting period.

The effect of uncertainty as to whetherany performance criteria of share

options will be met is dealt with byestimating the probability of sharesvesting and therefore the cost isadjusted and readjusted for theprobability of vesting in the vestingperiod.

1.181.181.181.181.18 Cash flow statementCash flow statementCash flow statementCash flow statementCash flow statement

Cash flows are reported using theindirect method, whereby the netprofit before tax is adjusted for theeffects of transactions of a non-cashnature and any deferrals or accruals of

past or future cash receipts orpayments. The cash flows fromregular revenue generating, investingand financing activities of theCompany are segregated.

1.191.191.191.191.19 Amalgamation adjustment reserve Amalgamation adjustment reserve Amalgamation adjustment reserve Amalgamation adjustment reserve Amalgamation adjustment reserve

accountaccountaccountaccountaccountWith effect from 21 May, 2003, thedirect and step down subsidiaries of

the Company were amalgamated into the Company. The Company hasaccounted for amalgamationadjustment reserve as per thescheme approved by the HonourableHigh Courts. Amalgamationadjustment reserve accountrepresents excess of the carrying

value of investments, over the sharecapital of the Transferor Companies.

29


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(Rs.)

2. Share capital2. Share capital2. Share capital2. Share capital2. Share capital As atAs atAs atAs atAs at As at

31 March 200931 March 200931 March 200931 March 200931 March 2009 31 March 2008

AuthorisedAuthorisedAuthorisedAuthorisedAuthorised300,000,000 (previous year: 250,000,000) equity shares of Rs. 10 each 3,000,000,000 2,500,000,000

3,000,000,0003,000,000,0003,000,000,0003,000,000,0003,000,000,000 2,500,000,0002,500,000,0002,500,000,0002,500,000,0002,500,000,000Issued, subscribed and paid upIssued, subscribed and paid upIssued, subscribed and paid upIssued, subscribed and paid upIssued, subscribed and paid up

231,183,745 (previous year: 231,183,745) equity shares of Rs. 10 each fully paid up 2,311,837,450 2,311,837,4502,311,837,4502,311,837,4502,311,837,4502,311,837,4502,311,837,450 2,311,837,4502,311,837,4502,311,837,4502,311,837,4502,311,837,450

Of the above :

1) 142,041,561 (previous year: 142,041,561) equity shares of Rs. 10 each are held by SABMiller Breweries Private Limited,the immediate holding company. 87,341,038 (previous year: 87,341,038) equity shares of Rs. 10 each are held by SABMiller

Asia B.V., another group Company. SABMiller Plc is the ultimate holding Company.

2) Pursuant to a scheme of arrangement 34,636,335 (previous year: 34,636,335) equity shares of Rs. 10 each were allotted,in earlier years, for consideration other than in cash.

(Rs.)

3. Reserves and surplus3. Reserves and surplus3. Reserves and surplus3. Reserves and surplus3. Reserves and surplus As atAs atAs atAs atAs at As at

31 March 200931 March 200931 March 200931 March 200931 March 2009 31 March 2008

Capital reserveCapital reserveCapital reserveCapital reserveCapital reserve 2,000,000 2,000,000

Securities premiumSecurities premiumSecurities premiumSecurities premiumSecurities premiumAt the beginning of the year 6,138,637,748 4,608,316,326Addition during the year - 1,530,321,422

6,138,637,7486,138,637,7486,138,637,7486,138,637,7486,138,637,748 6,138,637,7486,138,637,7486,138,637,7486,138,637,7486,138,637,748

General reserveGeneral reserveGeneral reserveGeneral reserveGeneral reserveAt the beginning of the year 1,218,399,316 1,232,069,584Less: Transitional adjustment for employee benefits (net of tax of Rs. 7,039,122) ----- (13,670,268)

(refer to note 1.12)Less: Debit balance in profit and loss account (1,218,399,316) (952,184,208)

----- 266,215,108266,215,108266,215,108266,215,108266,215,108

6,140,637,7486,140,637,7486,140,637,7486,140,637,7486,140,637,748 6,406,852,8566,406,852,8566,406,852,8566,406,852,8566,406,852,856

(Rs.)

4. Unsecured loans4. Unsecured loans4. Unsecured loans4. Unsecured loans4. Unsecured loans As atAs atAs atAs atAs at As at31 March 200931 March 200931 March 200931 March 200931 March 2009 31 March 2008

Bank overdraft 415,394,900 263,732,853

Short term bank loansShort term bank loansShort term bank loansShort term bank loansShort term bank loans 4,834,617,711 2,650,010,288

Other loansOther loansOther loansOther loansOther loans

External commercial borrowings from banks [Refer note (a) below] 662,275,628 442,092,599From others:

- loan from holding Company [Refer note (b) below] 211,624,493 385,269,911- loan from fellow subsidiary [Refer note (b) below] 46,119,164 -- deferred sales tax loan - 33,316,355

6,170,031,8966,170,031,8966,170,031,8966,170,031,8966,170,031,896 3,774,422,0063,774,422,0063,774,422,0063,774,422,0063,774,422,006

Notes:Notes:Notes:Notes:Notes:a) Amount repayable within a period of 12 months Rs.178,325,000 (previous year: Rs. 207,625,175).

b) Tenure and terms for repayment have not been specified for loans obtained from holding company and fellow subsidiaries.

Schedules to the financial statements28-29


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(Rs.)

6. Investments6. Investments6. Investments6. Investments6. Investments As atAs atAs atAs atAs at As at31 March 200931 March 200931 March 200931 March 200931 March 2009 31 March 2008

Long term investmentsLong term investmentsLong term investmentsLong term investmentsLong term investments

1. Non trade - unquoted1. Non trade - unquoted1. Non trade - unquoted1. Non trade - unquoted1. Non trade - unquoted

(i) Government and trust securities(i) Government and trust securities(i) Government and trust securities(i) Government and trust securities(i) Government and trust securities

National Savings Certificates 2,019,500 2,019,500

Indira Vikas Patra 26,550 26,550

2,046,050 2,046,050

(ii) Fully pai

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