SKOL Breweries Limited

Board of Directors Audit Committee

Mr. Ari Mervis - Chairman Mr. Jonathan Andrew Kirby
Mr. Jonathan Andrew Kirby Mr. Ari Mervis
Ms. Sue Clark Mr. Richard (Pete) L Lloyd–Upto 23.02.2009
Mr. T.S.R. Subramanian
Mr. Jean-Marc Delpon de Vaux
Mr. Richard (Pete) L Lloyd – Upto 23.02.2009
Mr. Jean-Marc Delpon de Vaux – Managing Director
Registered Office
Statutory Auditors No.1, Mahal Industrial Estate
BSR & Co., Mahakali Road
Chartered Accountants Andheri (East)
Maruthi Info-Tech Centre Mumbai – 400 093
11-12/1, Inner Ring Road
Koramangala, Bangalore – 560 071 Corporate Office
Jalahalli Camp Road
Bankers Yeshwanthpur
Standard Chartered Bank Bangalore-560 022
ABN Amro Bank
Citi Bank
Societe Generale
ICICI Bank Limited

Registrar & Shar

Sharee Transfer Agent
Transfer
Sharepro Services (India) Pvt Ltd
Samhita Warehousing Complex
Gala No-52 to 56, Bldg No.13 A-B
Near Sakinaka Telephone Exchange
Andheri – Kurla Road, Sakinaka
Mumbai – 400 072

Units
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

SKOL Breweries Limited

 Notice
6-7
NOTICE is hereby given that the 20th
Annual General Meeting of the members
of the Company will be held at M.C. Ghia
Hall, Bhogilal Hargovindas Building, 2nd
floor, 18/20, K. Dubash Marg, Behind
Prince of Wales Museum, Kala Ghoda,
Mumbai – 400 001 on Tuesday, the 15th
September, 2009 at 3.00 p.m. to
transact the following business:
Ordinary Business:
01. To receive, consider and adopt the
Audited Balance Sheet as at 31st
March, 2009 and the Profit & Loss
Account for the year ended on that
date and the Report of the Directors
and Auditors thereon.
02. To appoint a Director in place of Ms.
Sue Clark, who retires by rotation at
this meeting and being eligible,
offers herself for re-appointment.
03. RESOL
RESOLVEDVED THA
THAT T M/s. BSR & Co,
Chartered Accountants, who retire
at the conclusion of this Annual
General Meeting be and are hereby
appointed as Statutory Auditors of
the Company till the next Annual
General Meeting at remuneration to
be fixed by the Board of Directors
and billed progressively.
Special Business: the consent of the Company be and
is hereby accorded to offer, issue
04. To consider increase in Borrowing
and/or allot on preferential basis to
Powers.
SABMiller Asia B.V. upto 50000000
To consider and if thought fit, to Equity Shares of the Company of
pass, with or without modifications, the face value of Rs. 10/- each at a
the following Resolution as a Special premium of Rs.46/- per share.
Resolution:
RESOL
RESOLVED VED FUR THER THA
FURTHER THAT T such
RESOL
RESOLVED VED THA
THATT pursuant to new equity shares shall rank pari
Section 293 (1)(d) of the Companies passu with the existing equity shares
Act, 1956 and other enabling of the Company, except that they
provisions, if any, of the said Act, shall not rank for dividend, if any,
consent be and is hereby accorded declared or paid in respect of any
to the Board of Directors of the financial year of the Company prior
Company for borrowing any sum or to the financial year in which they are
sums of money from time to time alloted and shall rank for dividend
from one or more body corporate, pari passu from the date of their
banks or financial institutions or the allotment in respect of the financial
public by way of cash, credit year in which they are alloted.
advances, deposits or other loans
RESOL
RESOLVED VED FUR THER THA
FURTHER THATT
whether secured or unsecured by
Mr. Kevin Heydenrych, Mr. Gobind
mortgage, charge, hypothecation or
Chandiramani, Mr. Deepak
pledge of the Company’s assets and
Kewalramani and Mr. S.M. Pramod
properties whether movables and/or
be and are hereby jointly and/or
immovables or stock-in-trade
severally authorized to negotiate,
(including book debts, bills, raw
execute and deliver any agreement,
materials, stores and spare parts
letter, deed or document or any
and components in stock or in
amendments or modifications
transit) work-in-progress and debts
thereto in connection with the
and advances notwithstanding that
aforesaid preferential issue of shares
the sum or sums so borrowed
in favour of SABMiller Asia B.V. and
together with the money’s, if any,
to sign, execute, deliver and/or file all
already borrowed by the Company
relevant forms, filings, reports,
(apart from the temporary loans
documents, etc., required by any
obtained from the Company’s
applicable regulations including with
bankers in the ordinary course of
any regulatory authorities or an
business) may exceed in the
authorized dealer in terms of the
aggregate the paid-up capital of the
Indian exchange control regulations.
Company and its free reserves
which have not been set part for any BY ORDER OF THE BOARD
specific purpose but so that the
Pramod S M
total amount upto which the moneys
Company Secretary
may be so borrowed shall not at any
time exceed Rs.2000 Crores. Date : 8th July, 2009
Place : Bangalore
05. To consider a preferential issue of
shares.
To consider and if thought fit, to
pass, with or without modification/s
the following Resolution as a Special
Resolution.
RESOL
RESOLVEDVED THA
THAT T pursuant to the
provisions of Section 81(1A) and
other applicable provisions (if any) of
the Companies Act, 1956, the
Unlisted Public Companies
(Preferential Allotment) Rules, 2003
and the relevant provisions of the
Memorandum and Articles of
Association of the Company,
NOTES:
01. A member entitled to attend and
vote at the meeting is entitled to
appoint a proxy to attend and vote
on a poll in his/her stead. A proxy
need not be a member of the
Company. Proxies in order to be
effective must be deposited at the
registered office of the Company not
less than forty-eight hours before the
meeting. A blank proxy form is
enclosed.
02. The Register of Members and the
Share Transfer Books of the
Company will remain closed from
1st September 2009 to 15th
September 2009 (both days
inclusive).
03. For convenience of members an
attendance slip is also annexed.
Members are requested to affix their
signature at the space provided
therefore and hand over the same at
the place of Meeting. The proxy of a
member should mark on the
attendance slip as Proxy.
Members are also requested to
bring their copies of the Annual
report to the venue of the Meeting.
04. All queries relating to non-receipt of
share certificates after transfer/
transmission/dematerialization/
rematerialisation, mandates, change
of address, nomination etc. may be
sent to the Registrar & Share
Transfer Agents, M/s Sharepro
Services (India) Pvt. Ltd, Samhita
Warehousing Complex, Gala No-52
to 56, Bldg No.13 A-B, Near
Sakinaka Telephone Exchange,
Andheri –Kurla Road, Sakinaka,
Mumbai-400 072, Telephone: 022-
67720300/67720400,
Fax No: 022-28591568/28508927,
E-Mail: sharepro@shareproservices.com
“Children of a culture born in a water-rich
environment, we have never really learned how
important water is to us. We understand it,
but we do not respect it.”
05. Pursuant to Section 205C of the
Companies Act, 1956 all unclaimed
dividends upto the Financial Year
2000-2001 have been transferred to
the Investor Education and
Protection Fund. Members of the
erstwhile Mysore Breweries Limited
who have not yet claimed their
Dividend for the financial year 2001-
2002 and thereafter, may claim from
the Company before the same is
transferred to the Fund. It may be
noted that no claims shall lie against
the Company or the Fund in respect
of individual amounts which were
unclaimed and unpaid for a period of
7 years and transferred to the Fund
and no payment shall be made in
respect of any such claim.
Explanatory Statement pursuant to
Section 173(2) of the Companies Act,
1956.
Item Nos. 2, 4 and 5
A brief resume of the Directors offering
themselves for re-election is given below:
02. Ms. Sue Clark is a Bachelor of
Science (Hons) & MBA. She joined
SABMiller plc in 2003 as Corporate
Affairs Director. Prior to this, she held
a number of senior roles in UK
Companies, including Director of
Corporate Affairs for Railtrack Group
and Director of Corporate Affairs for
Scottish Power plc.
Except for Ms. Sue Clark, no other
Director is interested in the aforesaid
Resolution.
04. At the Annual General Meeting of the
Company held on 10th September,
2008, the Members empowered the
Board of Directors under Section
293(1)(d) of the Companies Act,
1956 to borrow monies for the
business purposes of the Company
up to a limit of Rs.1500 Crores.
Keeping in view the Company’s
business requirements and its
investment and growth plans, it is
considered desirable to increase the
said borrowing limits to Rs.2000
Crores as outlined in the resolution.
In terms of the provisions of Section
293 (1) (d) of the Companies Act,
1956, approval of the members is
being accordingly sought through
resolution under item no.04 for such
increase in limits.
05. The Company proposes to issue and
allot, on a preferential basis upto
50000000 equity shares of face
value of Rs.10/- each to SABMiller
Asia B.V. at a premium of Rs. 46/-
per share (based on the valuation
report) which requires shareholders’
approval under Section 81 (1A) of
the Companies Act, 1956.
Information as required under
Unlisted Public Companies
(Preferential Allotment) Rules, 2003
is given below.
a. The price of price band at which
allotment is proposed: The Equity
Shares of Rs.10/- each will be
allotted at a premium of Rs.46/- per
Share.
b. The relevant date on the basis of
which price has been arrived at:
Valuation as at 31st March, 2009 and
the rate of the eariler preferential
accounts.
c. The objects of the issue through
preferential offer: To issue Equity
Shares of the Company to SABMiller
Asia B.V. for cash and to utilize the
money received hereunder for the
purpose of paying down some of its
debts and for other corporate
purposes.
SKOL Breweries Limited
 Notice
8-9

d. The class or classes of persons to
whom the allotment is proposed to
be made: The allotment will be made
to SABMiller Asia B.V.
e. Intention of promoters/directors/key
management persons to subscribe
to the offer: SABMiller Asia B.V. has
signified its intention of subscribing
to the issue.
f. Share holding pattern of promoters
and others classes of shares before
and after the offer: The shareholding
pattern of the Company before and
after the issue is set out below
g. Proposed time within which the The Board recommends the adoption of
allotment shall be completed: Within the resolution.
one year from the date of the AGM
BY ORDER OF THE BOARD
h. Whether a change in control is
Pramod S M
intended or expected: There will be
Company Secretary
no change in control of the Company
Registered office:
after the preferential issue.
1, Mahal Industrial Estate, Mahakali
None of the Directors of the Company Road, Andheri (East), Mumbai-400 093
are deemed to be interested in the said
Place: Bangalore
resolution.
Date : 8th July, 2009

Category Pre Issue Post Issue

No of Shares % No of Shares %

A Pr omoter’
Promoter’ s holding
omoter’s 229384473 99.22 279384473 99.36
Sub total 229384473 99.22 279384473 99.36

B Non-Promoters Holding
Institutional 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 total 6248 0.00 6248 0.00

Others
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 total 1793024 0.78 1793024 0.64

Total 231183745 100.00 281183745 100.00

“There are a number of ways to save water,

and they all start with you.”
“Water has become a highly precious resource.
There are some places where a barrel of water
costs more than a barrel of oil.”

SKOL Breweries Limited

 Directors’ Report
10-11
OPERATIONS
OPERATIONS
The turnover and volumes of your
Company during the year 2008-09 has
considerably increased. The turnover
increased by 23% over the previous year
to Rs.2172 Crores from Rs.1766
Crores. The turnover has increased by
6% as a result of entering into a lease
arrangement with a brewery which earlier
was a contract bottling arrangement.
The Company however reports a loss for
the year on account of the following:
1. A one time charge of Rs. 34 Crores
due to change in accounting policy of
containers. (See Significant
accounting policies Note 1.5)
2. The new brewery in Haryana was
commissioned at the end of last year
as a result of which the depreciation
charged to the Profit and Loss
account has increased.
3. The Interest cost has gone up 182%
due to increase in borrowings and the
interest rates as compared to
previous year.
“Water is life's mater and matrix, mother and medium.
There is no life without water.”
Dear Members,
Your Directors have pleasure in submitting their report and the Statement of
accounts for the year ended 31st March 2009.
FINANCIAL RESULTS (Rupees in Crores)
Financial Year Financial Year
2008-2009 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
4. Cost pressures on account of rising WATER MANAGEMENT IN INDIA
commodity prices and glass bottles.
Your Company’s commitment to
5. Inability to price in many markets sustainable development is ongoing.
where selling prices are constrained It is a core part of the organisation’s
by regulations. business. It underpins our ability to
grow and our license to operate.
6. Stand off in AP leading to stoppage
Water is one of our top sustainable
of production and supply for 38 days
development priorities.
during peak in the beginning of the
financial year. Given the fact that this key raw material
for our Industry is a stressed resource its
A sum of Rs.411.26 Crores has been
scarcity and quality are becoming
invested in upgrading existing plant and
increasingly critical issues of immediate
machinery and in developing capacity.
relevance to the Company.
There has also been continuous
Conservation of water is one critical
upgrading and implementation of best
element of our commitment to deliver
practices at all units to increase
best in class performance within our
productivity and bring down the cost of
sustainable development framework.
production.
The organisation is committed to sound
Your Board enjoys the unqualified water management practices throughout
support of all its financiers whose its global operations in a manner that
confidence in the future of your Company takes account of local geographical,
is evidenced by the fact that all environmental and social factors. This is
borrowings have been made without the reflected in the “5 R” water management
bankers taking any charges over any of strategy adopted by the group.
your Company’s assets. As such the
In India the implementation of 5R
majority of the borrowings are short term
strategy has seen internal measures to
and renewed from year to year.
reduce, recycle and reuse water at all
Observations of the auditors are self
our breweries.
explanatory.
DIVIDEND
As the Company has incurred loss during
the year, the Directors do not
recommend any dividend on the equity
capital.

Our operations have been engaged in
consistently reducing water consumption
in the brewing process, year by year the
trends indicate a reduction in overall
water consumption from 26.2 million HL
in F’08 to 23.6 million HL in F’09.
This is despite growing volumes.
Your Company committed to reduce
water waste in our breweries and has
set itself the target of reducing our water
usage to 3.5 litres used to make litre of
beer before the year 2015.
We recognise that water issues are by
nature cross-community and cross
boundary, which therefore cannot be
managed simply within the fence lines of
our own operations. Therefore we have
started external interventions in
partnerships with NGOs, communities
and local governments striving to build
long term sustainable partnerships to
address local water issues.
Moving towards a country wide
structured watershed mapping process
to understand the water availability and
quality across all our operations for
future business planning, we have
completed watershed mapping for three
sites in India. The data will also be used
to assess the opportunity to manage
these watersheds for the long term
sustainability of the community.
Conservation through rain water
harvesting is practiced inside our
breweries. We have also commenced
water replenishing initiatives within the
communities. We have embarked upon a
natural recharge initiative near our
Rochees Brewery in the water stressed
region of Alwar district, Rajasthan in
availability in the region for agriculture
which is the main source of livelihood for
the farming community.
Similarly, initiatives are on in the water
stressed area of Medak District in Andhra
Pradesh to build capacity of the
community to develop sustainable water
management practices and enhance
groundwater availability through
improved water use efficiency.
The interventions being conducted under
the leadership of ICRISAT ( International
Crop Research Institute for Semi Arid
Tropics) include enhancing rainwater
Northern India. The ground water conservation, improving water use
recharge initiative, launched in October efficiency and manage the water demand,
2008, is currently the largest in this while improving the livelihoods and
region. It is expected to recharge 300 promoting a shift towards less water
million liters of water a year- the same intensive cropping patterns.
amount as extracted by the brewery’s
borewell pumps. Spread over a
catchment expanse of about 120
hectares the design involves the Water harvesting at Neemrana, Rajasthan
construction of three check dams in a
wasteland area to facilitate natural
recharge. The key strength of the
project lies in demonstrating a low
cost technology enabling natural
recharge (as against artificial through
recharge shafts, etc).
The project is being conducted in
collaboration with the apex industry
organisation – CII (Confederation of
Indian Industry) and a partner
organisation of CII, ACWADAM
(Advanced Center for Water Resources
Development and Management)
specialising in ground water
management.
This recharge will augment the local
groundwater resources in the region.
The structures will trap the water that
would otherwise have simply run off.
The recharge initiative assumes a greater
significance in view of the fact that the
overall incidence of irrigation through
groundwater has increased in the region
further stressing the resource.
We are conducting further studies to
identify more natural recharge sites within
the region to further augment the aquifer.
Your Company has also built 3 water
harvesting structures in the Cuttack
District of Orissa, improving the water Beneficiaries of water harvesting at Neemrana, Rajasthan
SKOL Breweries Limited
 Directors’ Report
12-13
REGULATOR
REGULATORY CHALLENGE AND
TORY
CONSTRAINT
Despite repeated request and
representations to the State procured
monopoly in the State of Andhra
Pradesh no price increase has been
forthcoming. Your Company along with
United Breweries Ltd has therefore filed a
Writ Petition in the Hon’ble High Court of
Andhra Pradesh against the repeated
refusal of the Corporation to grant a price
increase to meet rising input costs.
As a consequence of the litigation the
Corporation stopped procurement of
beer from 1st April to mid June 2009. The
case is still pending with the Andhra
Pradesh High Court.
Similarly in the State of UP the Company
was unable to effect supplies during April
to early June 2009.
The Government of Rajasthan has also
reduced the number of retail outlets and
has imposed an ad valorem tax. This has
given a spurt to economy brands. As
your Company does not participate in
this segment, this has adversely affected
the market share of the Company.
The above stands being taken by the
Company would have adverse short term
impact on the profitability of the business
of the Company but we believe that they
will inure long term benefits which are
immeasurable.
DIRECTORS DIRECTORS’ RESPONSIBILITY
STATEMENT U/S 217 (2AA) OF THE
STA
In accordance with the Articles of
COMP ANIES ACT
COMPANIES ACT,, 1956
Association, Ms. Sue Clark, Director of
the Company retires by rotation at this Your Directors state that:
meeting and being eligible, offer herself
1. The financial statements have been
for re-appointment.
prepared in conformity with the
Mr. Richard (Pete) L Lloyd has resigned generally accepted accounting
as a Director of the Company w.e.f. 23rd principles and applicable accounting
February, 2009. The Board places on standards in India.
record the meritorious services rendered
2. The Directors have selected such
by Mr. Richard (Pete) L Lloyd during his
accounting policies as are applicable
tenure as Director on the Board.
and have applied them consistently
AUDIT COMMITTEE and made reasonable and prudent
judgment and estimates so as to give
Pursuant to the provisions of Section
a true and fair view of the state of
292A of the Companies Act, 1956 an
affairs of the Company at the end of
Audit Committee has been constituted.
the financial year and of the profit or
On account of resignation of Mr. Richard
loss for the year.
(Pete) L Lloyd, the present members of
the Committee are Mr. Jonathan Andrew 3. The Directors have taken proper and
Kirby, Mr. Jean-Marc Delpon de Vaux and sufficient care for the maintenance of
Mr. Ari Mervis. Mr. Jean-Marc Delpon de adequate accounting records in
Vaux Chairman of the Audit Committee accordance with the provisions of the
was present at the last Annual General Companies Act for safeguarding the
Meeting. assets of the Company and for
preventing and detecting fraud and
AUDITORS
other irregularities.
M/s BSR & Co., Chartered Accountants,
4. The financial statements have been
retiring Auditors, have signified their
prepared on the basis of “Going
willingness to be reappointed as
Concern” considering the ability of
Statutory Auditors of the Company. They
the Company to carry on its business
have confirmed that their reappointment
in the foreseeable future.
if made will be within the limits prescribed
under Section 224(1B) of the Companies ACKNOWLEDGEMENT
Act, 1956. Your Directors recommend
Your Directors wish to place on record
their appointment at the ensuing Annual
their appreciation to employees at all
General Meeting.
levels for their co-operation. The
PUBLIC DEPOSIT Directors would also like to acknowledge
the continued support of the Company’s
During the year, the Company has not
Bankers, Distributors, Shareholders,
accepted any public deposits as defined
Customers and Suppliers.
in the Companies (Acceptance of
Deposits) Rules, 1975. FOR AND ON BEHALF OF THE BOARD
PAR TICULARS OF EMPLOYEES
ARTICULARS Jonathan Andrew Kirby
Director
The details of employees covered under
the provisions of Section 217 (2A) of the Jean-Marc Delpon de Vaux
Companies Act, 1956 and the rules Managing Director
framed there under, as amended to date (Bangalore)
are attached herewith.
Place: Hong Kong
CONSER
CONSERVVATION OF ENERGY AND Dated: 8 July, 2009
TECHNOLOGY ABSORPTION
The statement pursuant to Section 217
(1) (e) of the Companies Act, 1956 read
with the Companies (Disclosure of
Particulars in the Report of Board of
Directors) Rules, 1988 to the extent
applicable are set in the annexure hereto.
“It is a curious situation that water,
from which life first arose, should now be threatened
by the activities of one form of that life.”

SKOL Breweries Limited

 Directors’ Report
14-15
STEAM ENERGY PER HL OF BEER MANUFACTURED
MANUFACTURED
250
200
150
100
50
0.0
F’05 F’06 F’07
Steam Energy Requirement (MJ/HL)
The Company has commissioned a
state-of-the-art brewery in Haryana in
F’09. This brewery marks a significant
reduction in the specific energy
requirement and would become the
benchmark for future energy efficient
breweries.
While the positive trend in energy
reduction thus far has been made
possible by operational excellence in
breweries, there is a need to adopt
newer energy efficient technologies to
sustain this momentum going forward.
The Company is actively evaluating
greener technologies for introduction in
its breweries. Some of these
technologies are not prevalent in Indian
breweries because of various barriers,
one of them being high capital cost.
The possibility of availing Carbon Credits
would certainly help the Company in
pursuing greener technologies otherwise
unsustainable due to high costs.
A summary of the major measures taken
by the Company at its various units are
as under-
“The crisis of our diminishing water resources is just
as severe as any wartime crisis we have ever faced.
Our survival is just as much at stake as it was at the time of
any major wars or revolutions.”
DISCLOSURE AS PER THE COMP ANIES (DISCLOSURE OF P
COMPANIES AR
PAR TICULARS IN
ARTICULARS
THE REPORT OF DIRECTORS) RULES, 1988.
A. CONSER
CONSERVVATION OF ENERGY
Energy efficiency in breweries is achieved through a process of continuous
improvement. The Company is in the process of standardizing energy efficiency
measures across its breweries to further reduce the specific energy requirement
in brewing.
ELECTRICITY PER HL OF BEER MANUFACTURED
MANUFACTURED
20
15
10
5
0.0
F’08 F’09 F’05 F’06 F’07 F’08 F’09
Steam Energy Requirement (MJ/HL)
1. Aggressive target setting in B. FOREIGN EXCHANGE EARNINGS
breweries based on extensive AND OUTGO
benchmarking.
During the year, the Company has earned
2. Use of methane generated from Rs.16.10 Crores in foreign exchange
waste water treatment as boiler fuel. earnings. An amount of Rs.60.38 Crores
was incurred in foreign exchange.
3. Fuel switch from fossil fuel to
biomass in selected breweries to
reduce the carbon footprint.
FOR AND ON BEHALF OF THE BOARD
4. Adopting a 5 R strategy in breweries
Jonathan Andrew Kirby
aimed at Replenishment, Reduce,
Director
Reuse, Recycle and Redistribute.
A rain water harvesting structure has Jean-Marc Delpon de Vaux
been put up in one of the breweries in Managing Director
the North. This would help replenish (Bangalore)
the water table in the region.
Place: Hong Kong
5. Use of treated effluent for gardening Dated: 8 July, 2009
of the factory campus by drain
system. Use of UF & RO technology
to recycle treated effluent water at
strategic sites.
SKOL Breweries Limited
 Auditors’ Report
16-17

To the Members of SKOL Breweries

Breweries (iv) in our opinion, the balance sheet, the
Limited profit and loss account and the cash
flow statement dealt with by this
We have audited the attached balance
report comply with the accounting
sheet of SKOL Breweries Limited
standards referred to in sub-section
(“the Company”) as at 31 March 2009,
(3C) of Section 211 of the Companies
the profit and loss account and the cash
Act, 1956;
flow statement for the year ended on that
date annexed thereto. These financial (v) on the basis of written
statements are the responsibility of the representations received from the
Company’s management. directors of the Company as on
Our responsibility is to express an 31 March 2009, and taken on record
opinion on these financial statements by the Board of Directors, we report
based on our audit. that none of the directors is
disqualified as on 31 March 2009
We conducted our audit in accordance
from being appointed as a director in
with auditing standards generally
terms of clause (g) of sub-section (1)
accepted in India. Those standards
of Section 274 of the Companies Act,
require that we plan and perform the
1956; and
audit to obtain reasonable assurance
about whether the financial statements (vi) in our opinion and to the best of our
are free of material misstatement. information and according to the
An audit includes examining, on a test explanations given to us, the said
basis, evidence supporting the amounts accounts give the information
and disclosures in the financial required by the Companies Act,
statements. An audit also includes 1956, in the manner so required and
assessing the accounting principles used give a true and fair view in conformity
and significant estimates made by with the accounting principles
management, as well as evaluating the generally accepted in India:
overall financial statement presentation.
a. in the case of the balance sheet,
We believe that our audit provides a
of the state of affairs of the
reasonable basis for our opinion.
Company as at 31 March 2009;
As required by the Companies (Auditor’s
b. in the case of the profit and loss
Report) Order, 2003, as amended,
account, of the loss of the
(“the Order”) issued by the Central
Company for the year ended on
Government of India in terms of
that date; and
sub-section (4A) of Section 227 of the
Companies Act, 1956, we enclose in c. in the case of the cash flow
the Annexure a statement on the statement, of the cash flows of the
matters specified in paragraphs 4 and 5 Company for the year ended on
of the Order. that date.
Further to our comments in the Annexure
referred to above, we report that:
for B S R & Co.
(i) we have obtained all the information Chartered accountants
and explanations, which to the best
of our knowledge and belief were Zubin Shekary
necessary for the purpose of our Partner
audit; Membership No. 48814
Bangalore
(ii) in our opinion, proper books of
08 July 2009
account as required by law have been
kept by the Company so far as
appears from our examination of
those books;
(iii) the balance sheet, the profit and loss
account and the cash flow statement
dealt with by this report are in
agreement with the books of
account;
Annexure to the Auditors’ report
Annexure referred to in the Auditors’
Report to the Members of SKOL
Breweries Limited (“the Company”) for the
year ended 31 March 2009. We report
that:
i. (a) The Company has maintained
proper records showing full
particulars, including quantitative
details and situation of fixed
assets.
(b) The Company has a regular
programme of physical verification
of its fixed assets by which all fixed
assets are verified over a period of
three years. In our opinion, this
periodicity of physical verification is
reasonable having regard to the
size of the Company and the
nature of its assets. No material
discrepancies were noticed on
such verification.
(c) Fixed assets disposed off during
the year were not substantial, and
therefore, do not affect the going
concern assumption.
ii. (a) The inventory, except for goods-in-
transit and stock lying with third
parties, has been physically verified
by the management during the
year. In our opinion, the frequency
of such verification is reasonable.
For stocks lying with third parties
at the year-end, written
confirmations have been obtained.
(b) The procedures for the physical
verification of inventories followed
by the management are reasonable
and adequate in relation to the size
of the Company and the nature of
its business.
(c) The Company is maintaining
proper records of inventory.
The discrepancies noticed on
verification between the physical
stocks and the book records were
not material.
19
iii. (a) The Company has not granted any b) In our opinion, and according to the
loans, secured or unsecured, to information and explanations given
companies, firms or other parties to us, the transactions made in
covered in the register maintained pursuance of contracts and
under Section 301 of the arrangements referred to above
Companies Act, 1956. and exceeding the value of Rs. 5
Accordingly, paragraph 4(iii)(a), lakhs with any party during the year
4(iii)(b), 4(iii)(c) and 4(iii)(d) of the have been made at prices which
Order is not applicable. are reasonable having
regard to the prevailing market
(b) The Company has taken a loan
prices at the relevant time.
from Company covered in the
register maintained under Section vi. In our opinion and according to the
301 of the Companies Act, 1956. information and explanations given
The maximum amount outstanding to us, the Company has complied
during the year and the year-end with the provisions of Section 58A,
balance of such loan was Rs Section 58AA and other relevant
513,170,374 and Rs 211,624,493 provisions of the Companies Act,
respectively. 1956 and the rules framed there
under/ the directives issued by the
(c) In our opinion, the rate of interest
Reserve Bank of India (as
for the above loan taken from the
applicable) with regard to deposits
Company, listed in the register
accepted from the public.
maintained under Section 301 of
Accordingly, there have been no
the Companies Act, 1956 are not,
proceedings before the Company
prima facie, prejudicial to the
Law Board or National Company
interest of the Company. Tenure
Law Tribunal (as applicable) or
and repayment terms have not
Reserve Bank of India or any Court
been specified for such loans.
or any other Tribunal in this matter
and no order has been passed by
(d) According to the information and
any of the aforesaid authorities.
explanations given to us, the tenure
and repayment terms have not
vii. In our opinion, the Company has an
been specified for the above
internal audit system commensurate
mentioned loan. Consequently,
with its size and nature of its business.
we are unable to comment on
paragraph 4(iii)(g) of the Order. viii. The Central Government has not
prescribed the maintenance of cost
iv. In our opinion and according to the
records under Section 209(1)(d) of
information and explanations given
the Companies Act, 1956 for any
to us, there is an adequate internal
of the products manufactured by
control system commensurate with
the Company.
the size of the Company and the
nature of its business with regard
to purchase of inventories and fixed
assets and with regard to the sale
of goods. We have not observed
any major weakness in the internal
control system during the course
of the audit.
v. a) In our opinion and according to the
information and explanations given
to us, the particulars of contracts
or arrangements referred to in
Section 301 of the Companies Act,
1956 have been entered in the
register required to be maintained
under that Section.
SKOL Breweries Limited
 Annexure to the Auditors’ report
18-19

ix. (a) According to the information
and explanations given to us and
on the basis of our examination of
the records of the Company,
amounts deducted/ accrued in the
books of account in respect of
undisputed statutory dues
including Provident Fund,
Employees’ State Insurance,
Income-tax, Sales Tax/ Value
Added Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty,
Cess, and other material statutory
dues have generally been regularly
deposited during the year by the
Company with the appropriate
authorities though there has been a
slight delay in a few cases. Amount
due in respect of Investor
Education and Protection Fund has
not been regularly deposited during
the year by the Company with the
appropriate authorities.
Further, since the Central Government
has till date not prescribed the amount
of cess payable under Section 441A
of the Companies Act, 1956, we are
not in a position to comment upon the
regularity or otherwise of the
Company in depositing the same.
According to the information and
explanations given to us, there are no
undisputed amounts payable in respect of
Provident Fund, Employees’ State
Insurance, Income-tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty,
Investor Education and Protection Fund
and other material statutory dues which
were in arrears as at 31 March 2009 for a
period of more than six months from the
date they became payable.
In respect of Sales Tax, the Company is in
process of collecting statutory forms.
Management has represented that the
same would be submitted to the
authorities at the time of the assessment.
Hence payment of differential sales tax
has not been made on the statutory
forms which are pending to be collected
for the periods for which assessments
have not been completed.
(b) According to the information and
explanations given to us, there are
no dues of Wealth Tax and Cess
which have not been deposited
with the appropriate authorities on
account of any dispute. The
following dues of Income-tax,
Sales Tax, Service Tax, Customs
Duty and Excise Duty have not
been deposited by the Company
on account of disputes.

Name of the Statute Nature of the Dues Amount (Rs.) Period to which Forum where
the amount relates dispute is pending

Punjab Excise Act, 1914 Duty on beer loss 13,745,236 1974-75 Financial
to 1990-91 Commissioner,
Haryana
Orissa and Bihar Interest on excise 3,222,705 1989 Orissa High Court
Excise 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 Court
of excise staff
Bombay Prohibition Supervision charges 550,930 1983-84 to 1988-89 Bombay High Court
Act, 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 High
Act, 1965 Court
Overtime wages of 6,679,691 1998-99 to 2004-05 Karnataka High
excise staff Court
Central Excise Act, 1944 Central excise duty 70,235,608 1996-97 to 1999-00 Customs Excise
Service Tax
Appellate 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 Assistant
Tax Act, 1975 Commissioner of
Commercial Taxes
(Appeals), New Delhi
Annexure to the Auditors’ report

Name of the Statute Nature of the Dues Amount (Rs.) Period to which Forum where
the amount relates dispute is pending

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 Deputy
Commissioner,
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, Uttar
Sales Tax Act, 1956 Pradesh
Andhra Pradesh General Sales Tax 3,675,677 1991-92 to 1992-93 Andhra Pradesh
Sales Tax Act, 1957 High Court
Pondicherry 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 Sales
Tax, New Delhi
Uttar Pradesh Tax on Penalty 379,728 2003-04 Deputy
Entry 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 High
Development Tax Act, 2000 Development Tax Court
Finance Act, 1994 Service Tax and penalty 32,129,640 2006-07 to 2007-08 Customs Excise and
Service Tax
Appellate Tribunal,
Mumbai
Customs Act, 1962 Customs Duty 261,555 2007-08 Customs Excise and
Service Tax
Appellate Tribunal,
Mumbai

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

SKOL Breweries Limited

 Annexure to the Auditors’ report
20-21
x. The Company has accumulated xviii. The Company has not made any
losses of Rs. 1,600,944,149 at the preferential allotment of shares to
end of the financial year which is less companies/ firms/ parties covered in
than fifty per cent of its net worth. the register maintained under Section
The Company has not incurred cash 301 of the Companies Act, 1956.
losses in the financial year and in the
xix. The Company did not have any
immediately preceding financial year.
outstanding debentures during
xi. In our opinion and according to the the year.
information and explanations given to
xx. The Company has not raised any
us, the Company has not defaulted in
money by public issues during
repayment of dues to its bankers.
the year.
The Company did not have any
outstanding dues to any financial xxi. According to the information and
institutions or debenture holders explanations given to us, there was
during the year. one fraud on the Company during the
year where there was an allegation
xii. In our opinion the Company has
against an employee of the Company
maintained adequate records in
for colluding with a vendor involving
cases where it has granted loans and
an amount of Rs. 67,000. Services
advances on the basis of security by
of the employee have since been
way of pledge of shares.
terminated. According to the
The Company has not granted any
information and explanations given
loans and advances on the basis of
to us, no other fraud on or by
security by way of pledge of
the Company has been noticed
debentures and other securities.
or reported during the course of
xiii. In our opinion and according to the our audit.
information and explanations given to
us, the Company is not a chit fund or
a nidhi/ mutual benefit fund/ society. for B S R & Co.
Chartered accountants
xiv. According to the information and
explanations given to us, the Zubin Shekary
Company is not dealing or trading in Partner
shares, securities, debentures and Membership No. 48814
other investments. Bangalore
08 July 2009
xv. According to the information and
explanations given to us, the
Company has not given any
guarantee for loans taken by others
from banks or financial institutions.
xvi. In our opinion and according to the
information and explanations given
to us, the term loans taken by the
Company have been applied for the
purpose for which they were raised.
xvii. According to the information and
explanations given to us and on an
overall examination of the balance
sheet of the Company, we are of the
opinion that funds raised on
short-term basis amounting to
Rs. 4,451,820,029 have been
used for long-term investment in
fixed assets.
“Don’t throw away the old bucket
until you know whether the new one holds water.”

SKOL Breweries Limited

 Balance sheet
22-23

(Rs.)
As at As at
Schedule 31 March 2009 31 March 2008
SOURCES OF FUNDS
Shareholders’ 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 funds
Unsecured loans 4 6,170,031,896 3,774,422,006

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

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

APPLICA TION OF FUNDS

APPLICATION
Fixed 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

Investments 6 11,359,225 11,359,225

Current assets, loans and advances

Inventories 7 1,650,081,511 1,183,482,865

Sundry 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 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 account 1,457,236,076 1,457,236,076

Debit balance in profit and loss account 1,600,944,149 952,184,208

Less: Balance in general reserve account 3 (1,218,399,316) (952,184,208)
382,544,833 -

14,622,507,094 12,556,856,348
S ignificant accounting policies 1
Notes to the accounts 18

The schedules referred to above form an integral part of the balance sheet.
As per our report attached
for B S R & Co. for SKOL Breweries Limited
Chartered Accountants
Zubin 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

(Rs.)
Schedule For the year ended For the year ended
31 March 2009 31 March 2008
Income
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 13,160,176,239 10,626,305,626

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

Other income 13 185,950,917 281,767,214
13,489,700,276 11,127,408,501
Expenditure
Cost 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
14,215,434,014 10,718,862,816

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

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 (648,759,941) 344,777,187
Debit balance in profit and loss account brought forward (952,184,208) (1,296,961,395)
Debit balance in profit and loss account carried (1,600,944,149) (952,184,208)
over to the balance sheet

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 policies 1

Notes to the accounts 18

The schedules referred to above form an integral part of the profit and loss account.
As per our report attached
for B S R & Co. for SKOL Breweries Limited
Chartered Accountants
Zubin 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

SKOL Breweries Limited

 Schedules to the financial statements
24-25
1. Significant accounting policies
Background
SKOL Breweries Limited (“the Company”
or “SKOL”) was incorporated as a public
limited company under the Companies
Act, 1956 on 18 November 1988.
The Company is primarily engaged in the
business of brewing, packaging,
distribution, marketing and sale of beer.
1.1 Basis of preparation
1.4 Revenue recognition
The financial statements have been
prepared and presented under the
historical cost convention on the
accrual basis of accounting.
The financial statements have been
prepared to comply in all material
respects with the mandatory
Accounting Standards (‘AS’)
prescribed by Companies
(Accounting Standards) Rules,
2006 and the relevant provisions of
the Companies Act, 1956, to the
extent applicable. These financial
statements are prepared and
presented in Indian Rupees.
1.2 Going concern
These financial statements have
been prepared on a going concern
basis, notwithstanding accumulated
losses and reliance on short term
borrowings due to the following
considerations:
- Expected steady future growth
reflected in financial projections
prepared by the management;
- Expected continual technical and
financial support by the SABMiller
group.
- Subsequent renewal of short term
borrowings from banks.
These financial statements,
therefore, do not include any
adjustments relating to
recoverability and classification of
asset amounts or to classification
and amount of liabilities that may be
necessary if the Company was
unable to continue as a going
concern.
1.3 Use of estimates
The preparation of financial
statements in conformity with
generally accepted accounting
principles in India requires
management to make estimates
and assumptions that affect the
reported amounts of assets and
liabilities and disclosure of
contingent liabilities on the date of
1.5 Fixed assets
the financial statements and the
results of operations during the
reporting period end. Actual results
could differ from those estimates.
Any revision to accounting
estimates is recognised
prospectively in current and future
periods.
Revenue is recognised to the extent
that it is probable that the economic
benefits will flow to the Company
and the revenue can be measured
reliably.
(i) Sale of goods
Revenue from sale of
manufactured and traded goods
is recognised on transfer of all
the significant risks and rewards
of ownership to the buyer which
normally takes place on
despatch of goods. The amount
recognised as sale is net of
sales tax, sales returns and
discount. Sales are presented
both gross and net of excise
duty.
(ii) Income from contract
bottling
Income from contract bottling is
recognised when the right to
receive bottling fee is
established which normally
takes place on dispatch of
goods by contract bottlers to
its customers.
(iii) Interest
Interest is recognised using the
time proportion basis taking into
account the amount outstanding
and the interest rate applicable.
(iv) Sale of scrap and spent malt
Revenue from sale of scrap and
spent malt is recognised on
transfer of all the significant risks
and rewards of ownership to the
buyer which normally takes
place on dispatch of goods.
The amount recognised as sale
is net of sales tax and sales
returns.
(v) Gain on prepayment of
deferred sales tax loan
Gain on prepayment of deferred
sales tax loan is recognised
when the deferred sales tax
loan, is settled at a discounted value
as mentioned in the deferral scheme.
Fixed assets are carried at cost of
acquisition or construction less
accumulated depreciation and
provision for impairment of assets.
The cost of fixed assets includes
freight, duties, taxes and other
incidental expenses related to the
acquisition or construction of the
respective assets. Borrowing costs
directly attributable to acquisition or
construction of those fixed assets
which necessarily take a substantial
period of time to get ready for their
intended use are capitalised to the
extent they relate to the period till
such assets are ready to be put to
use. Intangible assets are recorded
at their acquisition cost.
Advances paid towards the
acquisition or construction of fixed
assets outstanding at the balance
sheet date and the cost of the fixed
assets not ready for their intended
use on such date, are disclosed as
capital work-in-progress.
Upto 31 March 2008, containers
(empty bottles) were recorded as
fixed assets and depreciated over a
period of two years. The Company
is a dominant/ key player in the
Indian market and the policy of
recording containers as fixed assets
is more prevalent in International
markets. Other Companies in India
(i.e. competitors) record containers
as inventories and not as fixed
assets. This resulted in an issue on
comparability of results and
performance. In order to ensure
comparability of financial
performance with other Companies
in India, Management, with effect
from 1 April 2008, have changed
the policy of recording containers as
inventories which were hitherto
recorded as fixed assets.
Management believes that this
change will result in a more
appropriate presentation of the
financial statements (refer note 2 of
Schedule 18).
26-27
1.6 Depreciation
Depreciation on fixed assets is
provided on the straight-line method
as per the rates and in the manner
prescribed in Schedule XIV to the
Companies Act, 1956. The rates of
depreciation prescribed in Schedule
XIV to the Companies Act, 1956 are
considered as minimum rates.
However, where the management’s
estimate of the useful life of a fixed
Pursuant to this policy the following fixed assets are depreciated to their residual
value over their estimated useful life:
Class of Assets
Computer equipment
Furniture, fittings and office equipment
Brands
Buildings
Computer software
Motor Vehicles
Vehicles
Plant and Machinery
- Chillers
- Crates
- Wooden pallets
- Others
Freehold land is not depreciated.
Leasehold land is amortised over
the lease term. Leasehold
improvements are amortised over
the lease term or its estimated
useful life of 5 years, whichever is
lower.
Pro-rated depreciation is provided
on all assets purchased or sold
during the year. Assets, costing
individually Rs 5,000 or less, are
depreciated in full in the year of
purchase.
The useful lives of brands, which
primarily represent brands
purchased, have been determined
based on management’s
assessment of market conditions in
India, intent to use and ability to
maintain these assets, previous
history of these brands and
internationally accepted practices.
asset at the time of acquisition of
the asset or of the remaining useful
life on a subsequent review is
shorter than that envisaged in the
aforesaid schedule, depreciation is
provided at a higher rate based on
the management’s estimate of
useful life/ remaining useful life.
Years
4 the net book value that would have
6 loss had been recognised.
20
28
4 attributable to acquisition or
10
5 borrowing costs are accounted as
2 an expense.
3 1.9 Investments
14-18
1.7 Impairment
The Company periodically assesses
whether there is any indication that
an asset or a group of assets
comprising a cash generating unit
may be impaired. If any such
indication exists, the Company
estimates the recoverable amount
of the asset. For an asset or group
of assets that does not generate
largely independent cash inflows,
the recoverable amount is
determined for the cash-generating
unit to which the asset belongs. If
such recoverable amount of the
asset or the recoverable amount of
the cash generating unit to which
the asset belongs is less than its
carrying amount, the carrying
amount is reduced to its
recoverable amount. The reduction
is treated as an impairment loss and
is recognised in the profit and loss
account. The recoverable amount is
higher of the assets’ net selling price
and value in use.
After recognition of impairment loss,
depreciation is provided on the
revised carrying amount of the
asset, less its residual value (if any),
over its remaining useful life.
If at the balance sheet date there is
an indication that if a previously
assessed impairment loss no longer
exists, the recoverable amount is
reassessed and the asset is
reflected at the recoverable amount
subject to a maximum of
depreciable historical cost.
An impairment loss is reversed only
to the extent that the carrying
amount of asset does not exceed
been determined; if no impairment
1.8 Borrowing costs
Borrowing costs directly
construction of those fixed assets,
which necessarily take a substantial
period of time to get ready for their
intended use, are capitalised. Other
Long-term investments are carried
at cost less any other-than-
temporary diminution in the value, as
determined by management on
commercial consideration
determined separately for each
individual investment.
1.10 Inventories
Inventories are valued at lower of
cost and net realisable value.
Cost of inventories comprises
purchase price, costs of conversion
and other costs incurred in bringing
the inventories to their present
location and condition.
“The wars of the
twenty-first century
will be fought over
water.”
SKOL Breweries Limited
 Schedules to the financial statements
26-27
The methods of determination of cost of various categories of inventories
are as follows:
Raw materials, packing materials, stores
and spares and traded goods
Work-in-progress and finished goods
(including goods in transit)
Maintenance spares, which are in
regular use and are not an integral
part of any fixed asset, are treated
as inventory and valued at cost.
The comparison of cost and net
realisable value is made on an item-
by-item basis. The net realisable
value of work-in-progress is
determined with reference to the
selling prices of related finished
goods in the ordinary course of
business, less estimated cost of
completion and estimated costs
necessary to make the sale.
Raw materials, packing materials
and other supplies held for use in
production of inventories are not
written below cost except in cases
where material prices have declined,
and it is estimated that the cost of
the finished products will exceed
their net realisable value.
1.11 Foreign exchange
Foreign exchange transactions are
recorded at the rates of exchange
prevailing on the dates of the
respective transactions. Exchange
differences arising on foreign
exchange transactions settled
during the year are recognised in the
profit and loss account for the year.
Monetary assets and liabilities
denominated in foreign currencies
as at the balance sheet date are
translated at the closing exchange
rate on that date; the resultant
exchange differences are
recognised in the profit and loss
account.
Forward contracts and other
derivatives are entered into to
hedge the foreign currency risk of
the underlying outstanding at the
balance sheet date. The premium
or discount on all such contracts
arising at the inception of each
contract is amortised as income
or expense over the life of the
– First-in-first-out (FIFO) method
– FIFO method. Production
overheads are allocated on the
basis of normal capacity of
production facilities.
contract. Any profit or loss arising
on the cancellation or renewal of
forward contracts is recognised as
income or as expense for the
period.
The exchange difference on the
forward exchange contract entered
into to hedge the foreign currency
risk of the underlying outstanding at
the balance sheet date, is calculated
as the difference between the
foreign currency amount of the
contract translated at the exchange
rate at the reporting date, or the
settlement date where the
transaction is settled during the
reporting period, and the
corresponding foreign currency
amount translated at the later of the
date of inception of the forward
exchange contract and the last
reporting date. Such exchange
differences are recognised in the
profit and loss account in the
reporting period in which the
exchange rates change.
For forward exchange contracts
and other derivatives that are not
covered by AS 11 and that relate
to a firm commitment or highly
probable forecast transactions,
the Company has adopted the
principles of Accounting Standard
(‘AS’) 30, ‘Financial Instruments:
Recognition and Measurement’ with
effect from April 1, 2008. Derivative
financial instruments, which qualify
for cash flow hedge accounting and
where Company has met all the
conditions of cash flow hedge
accounting, are fair valued at
balance sheet date and the resultant
exchange loss/(gain) is debited/
credited to the hedge reserve.
This loss/ (gain) would be recorded
in profit and loss account when the
underlying transactions affect
earnings. Other derivative
instruments that relate to a firm
commitment or a highly probable
forecast transaction and that do not
qualify for hedge accounting have
been recorded at fair value at the
reporting date and the resultant
exchange loss/ (gain) has been
debited/ credited to profit and loss
account for the year.
1.12 Employee benefits
(i) Contributions to provident funds,
which is a defined contribution
scheme, are charged to the profit
and loss account on an accrual
basis.
(ii) The Company has an
arrangement with Life Insurance
Corporation of India to administer
its superannuation scheme, which
is a defined contribution scheme.
The contributions to the said
scheme are charged to the profit
and loss account on an accrual
basis.
(iii) Gratuity, which is a defined
benefit scheme is provided for
based on an actuarial valuation
carried out by an independent
actuary as at the balance sheet
date. Actuarial gains/ losses are
recognised immediately in the
profit and loss account and are
not deferred.
(iv) Compensated absences are
provided for based on an actuarial
valuation carried out by an
independent actuary as at the
balance sheet date.
In the previous year due to
adoption of the AS 15 - Employee
benefits (Revised 2005), the
Company has provided for long
term compensated absences
based on actuarial valuation.
Further in accordance with the
transitional provision in AS 15 -
Emplyoee benefits (Revised 2005),
Rs. 13,670,268 (net of deferred tax
28-29
asset of Rs. 7,039,122) has been
adjusted to the general reserve. This
change did not result in a material
impact on the profit for the previous
year.
1.13 Leases
Leases where the lessor effectively
retains substantially all the risks and
rewards of ownership of the leased
asset are classified as operating
leases. Operating lease payments are
recognised as an expense in the profit
and loss account on a straight-line
basis over the lease term.
1.14 Provisions and contingent
liabilities
The Company recognises a provision
when there is a present obligation as a
result of an obligating event that
probably requires outflow of
resources and a reliable estimate can
be made of the amount of the
obligation. A disclosure of a
contingent liability is made when there
is a possible obligation or a present
obligation that may, but probably will
not, require an outflow of resources.
When there is a possible obligation or
a present obligation that the likelihood
of outflow of resources is remote,
no provision or disclosure is made.
Provisions for onerous contracts, i.e.
contracts where the expected
unavoidable costs of meeting the
obligations under the contract exceed
the economic benefits expected to be
received under it, are recognised
when it is probable that an outflow
of resources embodying economic
benefits will be required to settle a
present obligation as a result of
an obligating event, based on a
reliable estimate of such obligation.
1.15 Taxation
Income tax expense comprises
current tax (i.e. amount of tax for the
year determined in accordance with
the Income-tax law) and deferred tax
charge or credit (reflecting the tax
effects of timing differences between
accounting income and taxable
income for the year). The deferred tax
charge or credit and the
corresponding deferred tax liabilities
or assets are recognised using the tax
rates that have been enacted or
substantively enacted by the balance
sheet date. Deferred tax assets are
recognised only to the extent there is
reasonable certainty that the assets
can be realised in future; however,
where there is unabsorbed
depreciation or carried forward
business loss under taxation laws,
deferred tax assets are recognised
only if there is a virtual certainty of
realisation of such assets.
Deferred tax assets are reviewed as
at each balance sheet date and written
down or written up to reflect the
amount that is reasonably/virtually
certain (as the case may be) to be
realised.
The Company offsets, the current
(on a year on year basis) and deferred
tax assets and liabilities, where it has a
legally enforceable right and where it
intends to settle such assets and
liabilities on a net basis.
The Company provides for and
discloses the Fringe Benefit Tax
(“FBT”) in accordance with the
provisions of Section 115 WC of the
Income-tax Act, 1961 and the
guidance note on FBT issued by ICAI.
1.16 Earnings per share
The basic earnings per share is
computed by dividing the net profit
or loss attributable to equity
shareholders for the year by the
weighted average number of equity
shares outstanding during the year.
The number of equity shares used in
computing diluted earnings per share
comprises the weighted average
shares considered for deriving basic
earnings per share, and also the
weighted average number of equity
shares, which would have been issued
on conversion of all potentially dilutive
equity shares. Potential dilutive equity
shares are deemed converted as of
the beginning of the year, unless they
have been issued at a later date.
The potentially dilutive equity shares
have been adjusted for the proceeds
receivable had the shares been
actually issued at a fair value
(i.e. the average market value of the
outstanding shares). In computing the
dilutive earnings per share, only
potential equity shares that are dilutive
and that either reduces the earnings
per share or increases loss per share
are included.
1.17 Employee stock compensation
cost
The Company applies intrinsic value
method of accounting for stock
options granted by the ultimate
holding Company to the employees
of the Company after 1 April 2005.
The intrinsic value of the employee
services received in exchange for the
grant of such options is recognised as
an expense. The amount recognised
is spread over the vesting period
which is also the period over which
some of the scheme performance
criteria relate. At each balance sheet
date, the estimates of the number of
options that are expected to become
exercisable are revised.
It recognises the impact of the
revision of the original estimates,
if any, in the profit and loss account
over the remaining vesting period.
The effect of uncertainty as to whether
any performance criteria of share
options will be met is dealt with by
estimating the probability of shares
vesting and therefore the cost is
adjusted and readjusted for the
probability of vesting in the vesting
period.
1.18 Cash flow statement
Cash flows are reported using the
indirect method, whereby the net
profit before tax is adjusted for the
effects of transactions of a non-cash
nature and any deferrals or accruals of
past or future cash receipts or
payments. The cash flows from
regular revenue generating, investing
and financing activities of the
Company are segregated.
1.19 Amalgamation adjustment reserve
account
With effect from 21 May, 2003, the
direct and step down subsidiaries of
the Company were amalgamated in
to the Company. The Company has
accounted for amalgamation
adjustment reserve as per the
scheme approved by the Honourable
High Courts. Amalgamation
adjustment reserve account
represents excess of the carrying
value of investments, over the share
capital of the Transferor Companies.
SKOL Breweries Limited
 Schedules to the financial statements
28-29

(Rs.)
2. Share capital As at As at
31 March 2009 31 March 2008
Authorised
300,000,000 (previous year: 250,000,000) equity shares of Rs. 10 each 3,000,000,000 2,500,000,000
3,000,000,000 2,500,000,000
Issued, 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 2,311,837,450
2,311,837,450 2,311,837,450
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 surplus As at As at
31 March 2009 31 March 2008
Capital reserve 2,000,000 2,000,000

Securities premium
At the beginning of the year 6,138,637,748 4,608,316,326
Addition during the year - 1,530,321,422
6,138,637,748 6,138,637,748
General reserve
At the beginning of the year 1,218,399,316 1,232,069,584
Less: 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)
- 266,215,108

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

(Rs.)
4. Unsecured loans As at As at
31 March 2009 31 March 2008

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

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

Other loans
External commercial borrowings from banks [Refer note (a) below] 662,275,628 442,092,599
From 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
6,170,031,896 3,774,422,006

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.
 5. Fixed assets

Provision
Gross Block Accumulated Depreciation for Net block
impairment
Description As at As at 31
As at As at As at As at As at
1 April 2008 Additions Deletions Charge Deletions/ March 2009
31 March 2009 1 April 2008 31 March 2009 31 March 2009 31 March 2008
adjustments (refer note 1
below)
Tangible assets
Freehold land 182,896,936 222,449,871 - 405,346,807 - - - - 16,600,000 388,746,807 166,296,936
Leasehold land 15,831,621 - - 15,831,621 4,551,264 1,014,956 - 5,566,220 - 10,265,401 11,280,357
Leasehold improvements 9,698,369 - - 9,698,369 488,904 1,939,674 - 2,428,578 - 7,269,791 9,209,465
Buildings 1,190,787,234 721,851,226 526,912 1,912,111,548 146,976,042 53,761,057 129,687 200,607,412 11,674,312 1,699,829,824 1,035,344,627
Plant and machinery
- Returnable containers (refer note 2 of schedule 18) 1,510,709,393 - 1,510,709,393 - 317,041,425 - 317,041,425 - - - 1,193,667,968
- Others 4,407,793,634 3,118,119,346 12,048,584 7,513,864,396 1,084,449,702 380,306,975 7,847,275 1,456,909,402 113,398,625 5,943,556,369 3,193,751,447
Computer equipment 78,991,059 22,131,403 1,271,440 99,851,022 59,739,757 10,971,626 1,215,312 69,496,071 930,146 29,424,805 18,409,595
Furniture, fittings and office equipment 62,350,116 8,544,712 360,745 70,534,083 34,641,133 8,032,720 352,085 42,321,768 953,086 27,259,229 26,904,625
Motor vehicles 32,300,867 42,155 4,201,925 28,141,097 11,315,362 2,724,807 821,759 13,218,410 258,556 14,664,131 20,726,949
Intangible assets
Brands 3,410,920,245 - - 3,410,920,245 376,637,450 173,241,899 - 549,879,349 - 2,861,040,896 3,034,282,795
Computer software 71,316,605 19,411,813 917,200 89,811,218 39,102,618 19,306,241 865,628 57,543,231 - 32,267,987 32,213,987
Total
Total 10,973,596,079 4,112,550,526 1,530,036,199 13,556,110,406 2,074,943,657 651,299,955 328,273,171 2,397,970,441 143,814,725 11,014,325,240 8,742,088,751
Previous year 8,795,466,503 2,813,346,689 635,217,113 10,973,596,079 1,525,150,636 858,090,043 308,297,022 2,074,943,657 156,563,671 8,742,088,751

Note 1: Provision for impairment (Also refer note 17 of Schedule 18):

(Rs.)

Provision for impairment

Description As at 1 April 2008 Char ge / (reversal)
Charge Deletion As at 31 March 2009

Freehold land 16,600,000 - - 16,600,000

Buildings 8,466,565 3,207,747 - 11,674,312
Plant and machinery - others 129,592,485 (10,511,759) 5,682,101 113,398,625
Computer equipment 841,707 88,439 - 930,146
Furniture, fittings and office equipment 804,358 148,728 - 953,086
Motor vehicles 258,556 - - 258,556
Total
otal 156,563,671 (7,066,845) 5,682,101 143,814,725
Previous year 52,523,898 117,306,243 13,266,470 156,563,671

SKOL Breweries Limited

 Schedules to the financial statements
30-31

(Rs.)
6. Investments As at As at
31 March 2009 31 March 2008

Long term investments

1. Non trade - unquoted
(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 paid up equity shares
1 (previous year:1) fully paid up equity shares of Rs. 10 each of MBL (AP) Breweries Limited 1 1
12,000 (previous year: 12,000) fully paid up equity shares of Rs. 10 each of Shushruta 12,000 12,000
Medical Aid and Research Hospitals Limited
5,000 (previous year: 5,000) fully paid up equity shares of Rs. 10 each of Maini Granites Limited 5,000 5,000
300 (previous year: 300) fully paid up equity shares of Rs. 10 each 300 300
in AP Heavy Machinery & Engineering Limited
10,000 (previous year:10,000) fully paid up equity shares of Rs. 10 each in 10,000 10,000
Ramanashree Comforts Limited
10,000 (previous year: 10,000) fully paid up equity shares of Rs. 10 each in 10,000 10,000
Anusha International Limited
1,700 (previous year: 1,700) fully paid up equity shares of Rs. 100 each 1,700 1,700
in Maa Communication Bozel Limited
7,000 (previous year: 7,000) fully paid up equity shares of Rs. 10 each 7,000 7,000
in Sachdev International Limited
12,500 (previous year: 12,500) fully paid up equity shares of Rs. 10 each 12,500 12,500
in Scarlet Flowers and Agritech Limited
100 (previous year: 100) fully paid up equity shares of Rs. 10 each 100 100
in Indana Spices and Food India Limited
80,000 (previous year: 80,000) fully paid up equity shares of Rs. 10 each 80,000 80,000
in Vulcan Leasing and Investments Limited
5,005 (previous year: 5,005) fully paid up equity shares of Rs. 100 each 500,500 500,500
in Janata Sahakari Bank Limited
295 (previous year: 295) fully paid up equity shares of Rs. 100 each 29,500 29,500
in Haryana State Cooperative Bank Limited
50,000 (previous year: 50,000) fully paid up equity shares of Rs. 10 each in 50,000 50,000
SDF Industires Limited (Formerly Super Star Distilleries Limited)
718,601 718,601
2. Non trade - quoted
Fully paid up equity shares
15,000 (previous year: 15,000) fully paid up equity shares of Rs. 1 each in ITC Limited 2,619,750 2,619,750
400 (previous year: 400) fully paid up equity shares of Rs. 10 each in Ultratech Cement Limited 400,060 400,060
80 (previous year: 80) fully paid up equity shares of Rs. 10 each in Tata Motors Limited 56,944 56,944
15,000 (previous year: 15,000) fully paid up equity shares of Rs. 2 each 2,115,000 2,115,000
in Gujarat Ambuja Cement Limited
2,000 (previous year: 1,000) fully paid up equity shares of Rs. 2 each in Larsen & Toubro Limited * 2,598,850 2,598,850
1,400 (previous year: 1,400) fully paid up equity shares of Rs. 2 each in Satyam Computers Limited 633,500 633,500
8,600 (previous year: 8,600) fully paid up equity shares of Rs. 10 each in Syndicate Bank Limited 700,470 700,470
9,124,574 9,124,574
Total long term investment 11,889,225 11,889,225
Less: Provision for, other than temporary, diminution in the value of investments (530,000) (530,000)
11,359,225 11,359,225

The aggregate book value and market value of quoted investments and book value of unquoted investments are as follows:

Quoted investment
Aggregate book value 9,124,574 9,124,574
Aggregate market value 5,876,574 7,775,281
Aggregate book value of unquoted investments 2,234,651 2,234,651
* On 3 October 2008 the Company has received bonus shares in Larsen & Tourbo Limited in the ratio of 1:1.
 (Rs.)
7. Inventories As at As at
31 March 2009 31 March 2008

Raw materials and packing materials 558,534,061 424,926,983

Stores and spares 92,353,625 61,739,226
Work-in-progress 182,761,543 124,986,877
Finished goods 798,896,716 560,769,112
Goods in transit - finished goods 15,313,095 3,372,180
Traded goods 2,222,471 7,688,487
1,650,081,511 1,183,482,865

(Rs.)
8. Sundry debtors As at As at
31 March 2009 31 March 2008

Unsecured
Debts outstanding for a period exceeding six months
- considered good 16,366,113 30,028,871
- considered doubtful 232,378,340 210,674,357
248,744,453 240,703,228

Other debts
- considered good 3,373,978,101 2,506,190,512
- considered doubtful 4,823,658 88,980,586
3,627,546,212 2,835,874,326
Less: Provision for doubtful debts (237,201,998) (299,654,943)
3,390,344,214 2,536,219,383

(Rs.)
9. Cash and bank balances As at As at
31 March 2009 31 March 2008

Cash on hand 35,068 666,437

Cheques in hand 60,860,594 41,338,772
Balances with scheduled banks
- in current accounts 241,718,047 246,729,811
- in margin money deposit accounts 13,734,611 11,864,657
- in exchange earnings foreign currency (EEFC) account 928,808 9,504,220
- in unclaimed public deposit account 30,000 30,000
- in unclaimed dividend accounts 88,315 1,117,210
317,395,443 311,251,107

“When we save a river, we save a major part of an

ecosystem, and we save ourselves as well
because of our dependence—physical, economic,
spiritual,—on the water and its community of life.”

SKOL Breweries Limited

 Schedules to the financial statements
32-33

(Rs.)
10. Loans and advances As at As at
31 March 2009 31 March 2008

Unsecured
Considered good
Advances recoverable in cash or in kind or for value to be received 397,023,049 444,740,092
Prepaid expenses 177,816,042 133,432,402
Inter-company deposit 22,667,915 -
Rental deposits 40,989,686 39,174,886
Other deposits 130,744,750 133,438,135
Advance fringe benefit tax (net of provision for fringe benefit tax ) 477,793 1,264,449
Advance tax and tax deducted at source (net of provision for income-tax) 115,372,693 135,499,862
Balances with excise authorities 288,712,959 393,797,080
Interest accrued but not due 2,426,469 1,928,313
1,176,231,356 1,283,275,219
Considered doubtful
Advances recoverable in cash or in kind or for value to be received 236,999,042 170,218,956
Less: Provision for doubtful advances (236,999,042) (170,218,956)
1,176,231,356 1,283,275,219

Notes:
Dues from Companies under the same management outstanding as at the balance sheet date is
Rs. Nil (previous year: Rs. Nil). Maximum amount outstanding during the year:
MBL Investments Limited - 128,785,130
SABMiller India Limited - 9,560,863

(Rs.)
11. Current liabilities As at As at
31 March 2009 31 March 2008

Acceptances 70,092,260 19,956,173

Sundry creditors
- micro and small enterpises (refer note 19 of Schedule 18) 15,156,599 34,630,832
- others 1,747,881,276 750,368,959
Payable to group Companies 1,448,206,620 1,008,195,088
Deposits from customers and del credre agents 90,881,516 81,907,134
Book overdraft 514,838 -
Interest accrued but not due 20,315,815 11,167,966
Liability for returnable containers (refer note 2 of schedule 18) - 601,678,875
Accrual for sales schemes and discounts 252,691,379 302,293,444
Excise duty payable 354,692,729 290,387,687
Other current liabilities 861,232,343 944,373,579
Investor education and protection fund shall be credited by the following amounts when due:
- Unclaimed dividend 88,315 1,117,210
- Unclaimed matured public deposit 30,000 30,000
4,861,783,690 4,046,106,947

(Rs.)
12. Provisions As at As at
31 March 2009 31 March 2008

Provision for compensated absences 47,112,420 47,708,072

Provision for gratuity 52,697,985 44,489,785
Provision for income-tax (net of advance tax and tax deducted at source) 18,011,044 96,752,121
Provision for fringe benefit tax (net of advance tax) 4,489,085 -
Provision for claims (refer to note 13 of Schedule 18) 299,619,710 224,630,331
421,930,244 413,580,309
 (Rs.)
13. Other income For the year ended For the year ended
31 March 2009 31 March 2008

Sale of spent malt and scrap 132,542,796 107,032,547

Interest
- inter-corporate deposit [tax deducted at source Rs. Nil (previous year: Rs. 836,719 )] - 3,692,493
- fixed deposit [tax deducted at source Rs. 240,071(previous year: Rs. 10,294,726 )] 2,008,395 48,743,316
Profit on sale of fixed assets, net 15,004,247 111,962,935
Gain on prepayment of sales tax deferral loan 14,322,809 -
Duty draw back on export of beer 8,113,532 -
Royalty income 6,611,772 3,547,972
Dividend income 177,101 -
Miscellaneous income 7,170,265 6,787,951
185,950,917 281,767,214

(Rs.)
14. Cost of materials For the year ended For the year ended
31 March 2009 31 March 2008

Cost of traded goods sold 77,339,029 129,050,240

Raw materials and packing materials consumed [includes cost of containers
consumed Rs. 2,979,601,969 (previous year: Rs. Nil] of which stock of empty
bottles on hand as at 1 April 2008 was Rs. 123,178,449 (previous year: Rs. Nil).
(refer note 2 of schedule 18) 6,736,736,577 2,869,821,961
Malt processing charges 110,599,032 172,798,620

Opening stock
Work-in-progress 124,986,877 99,559,379
Finished goods (including goods in transit) 564,141,292 281,936,166
Cost of bottles included in finished goods as at 1 April 2008 128,317,545 -
(refer note 2 of schedule 18)
817,445,714 381,495,545
Less: Excise duty on opening stock 304,023,888 140,906,636
(A) 513,421,826 240,588,909
Closing stock
Work-in-progress 182,761,543 124,986,877
Finished goods (including goods in transit) and cost of containers 814,209,811 564,141,292
996,971,354 689,128,169
Less: Excise duty on closing stock 398,774,474 304,023,888
(B) 598,196,880 385,104,281

(Increase) in work-in-progress and finished goods (A-B) (84,775,054) (144,515,372)

6,839,899,584 3,027,155,449

(Rs.)
15. Personnel costs For the year ended For the year ended
31 March 2009 31 March 2008

Salaries, wages and bonus 868,118,126 729,129,579

Contributions to provident and other funds 30,886,292 27,672,075
Gratuity expense 14,483,680 10,839,791
Compensated absences 5,839,464 1,625,400
Workmen and staff welfare expenses 55,352,218 35,661,451
974,679,780 804,928,296

SKOL Breweries Limited

 Schedules to the financial statements
34-35

(Rs.)
16. Other expenses For the year ended For the year ended
31 March 2009 31 March 2008

Cost of returnable containers (refer note 2 of schedule 18) - 1,652,361,344

Sales scheme expenses 731,286,351 599,201,681
Commission on sales 195,608,001 179,930,597
Freight outward 774,819,322 641,104,558
Power and fuel 698,588,332 594,402,878
Advertisement and publicity 668,107,856 579,909,782
Management fees 515,999,971 409,179,310
Rates and taxes 271,523,243 220,206,608
Legal and professional fees 152,976,820 132,552,686
Clearing and forwarding 75,720,004 68,554,855
Travel and conveyance 121,812,185 106,170,115
Consumption of stores and spares 128,418,139 102,150,451
Rent 170,384,812 75,261,801
Repairs and maintenance
- buildings 9,143,153 12,283,695
- plant and machinery 17,813,825 24,739,869
- others 43,331,462 25,023,663
Telephone and other communication 35,740,410 31,940,020
Training and development 30,603,680 21,112,274
Insurance 25,275,349 24,455,559
Provision for doubtful debts (62,452,945) 16,833,319
Bad debts written off 20,895,115 14,296,898
Printing and stationery 11,215,839 11,613,540
Provision for doubtful loans and advances 66,780,086 91,521,158
Doubtful advances written off - 8,322,007
Provision for claims, net 74,989,379 (55,864,649)
Foreign exchange loss, net 15,094,179 49,754,609
Miscellaneous expenses 188,801,903 120,848,622
4,982,476,471 5,757,867,250

(Rs.)
17. Borrowing cost For the year ended For the year ended
31 March 2009 31 March 2008

Interest
- On external commercial borrowings 35,740,247 29,531,653
- On term loans 474,026,661 119,327,275
- Others 45,754,180 17,297,303
Bank charges 26,457,914 5,348,994
581,979,002 171,505,225
Less: Borrowing cost capitalised (148,327,032) (17,989,690)
433,651,970 153,515,535

“Time your shower to keep it under 5 minutes.

You’ll save up to 1000 gallons a month.”
36-37

18. Notes to the accounts

1. Contingent liabilities and other commitments (Rs.)

Particulars As at As at
31 March 2009 31 March 2008
Claims against the Company not acknowledged as debts in respect of:
a) Sales tax matters 57,788,606 98,512,478
b) Excise matters 91,641,840 91,641,840
c) Service tax matters 32,129,640 -
d) Custom matters 261,555 -
e) Other matters 32,379,016 32,379,016
Other commitments
f) Bank guarantees 31,037,612 16,414,057
g) Estimated amount of contracts remaining to be executed on 604,587,467 1,243,881,396
capital account (net of advances) and not provided for
2. In the current year, pursuant to the change in accounting policy for returnable containers, the Company has carried out the following accounting
adjustments in the books of account as at 1 April 2008.
Particulars Amount (Rs)
Reversal of opening balance for returnable containers appearing in the financial
statements as at 1 April 2008:
Gross block of returnable containers 1,510,709,393
Accumulated depreciation of returnable containers (317,041,425)
Containers liability (601,678,875)
591,989,093
Opening stock of containers as at 1 April 2008, accounted as inventories as per the revised accounting policy
Finished goods 128,317,545
Packing materials 123,178,449 (251,495,994)
Total 340,493,099
Due to the change in accounting policy for returnable containers in the current year, the loss for the year is higher by Rs. 524,241,616 as compared to
the previous year, of which Rs. 340,493,099 is debited seperatly in the profit and loss account as “opening adjustment for returnable containers”.
3. Early adoption of AS 30
During the current year, the Company has early adopted the principles of AS 30 for forward exchange contracts and other derivatives that are not
covered by AS 11 and that relate to a firm commitment or a highly probable forecast transaction effective 1 April 2008. In the previous year, the
Company had accounted for such contracts in accordance with the guidance provided in the ICAI Announcement dated 29 March 2008.
Due to the change in accounting policy in the current year, the loss for the year is lower by Rs. 2,297,633 as compared to the previous year.
4. Income from contract bottling operations pertains to the revenue share the Company has earned on sales made by the tie up units.
These revenues is recorded on a net basis in order to comply with relevant statutory regulations where by tie up units raise invoices on its
customers, accounts for collections in its books of accounts, discharge statutory dues and taxes and records sales on a gross basis in the financial
statements. The contract bottling agreement further specifies that the dealing between the Company and the contract bottlers is on a principal to
principal basis. The above practice is consistent with prevalent industry practice.
5. Auditors’ remuneration, net of service tax (included under legal and professional fees) (Rs.)
Particulars For the year ended For the year ended
31 March 2009 31 March 2008
As auditor
- Statutory audit 9,200,000 8,300,000
- Tax audit 1,000,000 1,000,000
- Agreed upon procedures - 1,750,000
Reimbursement of expenses 528,339 466,327

6. Earnings per share (Figures in Rs. except number of shares)

Particulars For the year ended For the year ended
31 March 2009 31 March 2008
(Loss)/ profit for the year attributable to equity shareholders (648,759,941) 344,777,187
Weighted average number of equity shares of Rs. 10 each used 231,183,745 227,184,330
for calculation of basic earnings per share
Adjustments for dilutive effect of share application money - 3,999,415
Weighted average number of equity shares of Rs. 10 each used 231,183,745 231,183,745
for calculation of diluted earnings per share
Basic earnings per share (2.81) 1.52
Diluted earnings per share (2.81) 1.49

SKOL Breweries Limited

 Schedules to the financial statements
36-37

18. Notes to the accounts

7. Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to

the Companies Act, 1956 (quantitative information has been compiled from records and technical data in
respect of each class of goods manufactured/ purchased by the Company):
(a) Details of finished goods (including goods in transit) and turnover (gross)

For the year ended For the year ended

31 March 2009 31 March 2008
Beer Quantity Amount Quantity Amount
(in cases) (Rs.) (in cases) (Rs.)
Opening stock 2,337,847 564,141,292 1,330,528 281,936,166
Sales (gross of excise duty and discounts)* 52,221,556 21,622,215,155 47,428,745 17,367,693,602
Closing stock 2,509,859 814,209,811 2,337,847 564,141,292
* Includes 189,854 (previous year: 62,321) cases charged to consumption on account of breakages, damages and wastage.

(b) Details of traded goods

For the year ended For the year ended
31 March 2009 31 March 2008
Beer Quantity Amount Quantity Amount
(in cases) (Rs.) (in cases) (Rs.)
Opening stock 17,479 7,688,487 11,154 2,858,364
Purchases 167,825 71,873,013 837,335 133,880,363
Sales (gross of excise duty and discounts)** 180,230 96,894,530 831,010 296,758,472
Closing stock 5,074 2,222,471 17,479 7,688,487
** Includes 534 (previous year: 65) cases charged to consumption on account of breakages, damages and wastage.

(c) Details of capacity and production (in cases)

Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Licensed capacity # 77,559,542 50,126,379
Installed capacity* 73,522,209 50,007,210
Actual production 52,393,568 48,436,064
* Installed capacity is as certified by management and relied upon by the auditors being a technical matter.
# Licensed capacity is 6,049,644 HLs (previous year: 3,909,858 HLs) which is converted in cases considering 7.8 litres per case.

(d) Consumption of raw materials and packing materials

Particulars Units For the year ended For the year ended
31 March 2009 31 March 2008
Quantity Amount (Rs.) Quantity Amount (Rs.)
Malt (Note 1) MT 56,555 1,490,307,345 55,597 1,522,565,105
Cartons Nos 54,346,529 371,018,654 43,940,130 263,950,089
Cans Nos 109,874,866 664,968,771 53,451,141 274,220,123
Bottles Nos 660,535,313 2,979,601,969 Note 3 -
Others (Note 2) 1,341,438,870 981,885,265
Total 6,847,335,609 3,042,620,582
Note 1: Includes processing charges.
Note 2: It is not practicable to furnish quantitative information in view of the large number of items which differ in size and nature, each being less
than 10% in value of the total consumption.
Note 3: Previous year details are not provided as bottles were recorded as fixed assets up to 31 March 2008.
38-39

18. Notes to the accounts

(e) Consumption of imported and indigenous raw materials and packing materials

Particulars For the year ended For the year ended

31 March 2009 31 March 2008
Amount % age Amount % age
(Rs.) (Rs.)
Imported 750,972,187 11 477,663,725 16
Indigenous 6,096,363,422 89 2,564,956,857 84
Total 6,847,335,609 100 3,042,620,582 100

(f) Consumption of imported and indigenous stores and spares

Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Amount % age Amount % age
(Rs.) (Rs.)
Imported 5,556,272 4 1,749,696 2
Indigenous 122,861,867 96 100,400,755 98
Total 128,418,139 100 102,150,451 100

8. Value of imports on CIF basis (Rs.)

Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Raw materials and packing materials 517,290,769 447,980,124
Spare parts 7,805,209 1,367,463
Capital goods 843,645,026 128,484,910
1,368,741,004 577,832,497

9. Expenditure in foreign currency (accrual basis) (Rs.)

Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Travel 11,598,125 8,672,944
Management fees * 515,999,971 409,179,310
Interest ** 35,740,247 29,531,653
Professional and consultation fees 35,866,618 23,244,952
Others 4,624,002 8,791,717
Total 603,828,963 479,420,576

* Includes withholding taxes of Rs. 51,599,997 (previous year: Rs. 40,917,931) and research and development cess payable
Rs. 25,799,999 (previous year: Rs. 20,458,965)
**Includes withholding taxes of Rs. 1,669,945 (previous year: Rs. 2,450,361)

10. Earnings in foreign currency (accrual basis) (Rs.)

Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Export sales at FOB value 161,031,946 67,529,043

SKOL Breweries Limited

 Schedules to the financial statements
38-39

18. Notes to the accounts

11. Gratuity
The Company has a gratuity plan for the employees of the Company. Every employee who has completed 5 years or more of
service is eligible for gratuity on separation, worked out at 15 days salary (last drawn salary) for each completed year of
service. The obligation under the scheme is partially funded by contributions being made towards qualifying insurance policies
obtained from the insurer.
Profit and loss account
Net employee benefit expense (recognised in personnel expenses) (Rs.)
Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Current service cost 7,335,412 6,028,085
Interest cost on benefit obligation 5,137,100 4,503,848
Expected return on plan assets (1,557,617) (1,569,374)
Net actuarial loss recognised for the year 3,568,785 1,877,232
Net benefit expense 14,483,680 10,839,791
Actual return on plan assets 2,198,880 1,318,667

Balance Sheet
Details of provisions for gratuity (Rs.)
Particulars As at As at
31 March 2009 31 March 2008
Defined benefit obligations 75,152,540 62,980,939
Fair value of plan assets 22,454,555 18,491,154
Plan liabilities 52,697,985 44,489,785

Changes in the present value of the defined benefit obligation (Rs.)

Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Opening defined benefit obligation 62,980,939 51,632,939
Current service cost 7,335,412 6,028,085
Interest cost 5,137,100 4,503,848
Benefits paid (4,510,959) (810,458)
Actuarial loss on obligation 4,210,048 1,626,525
Closing defined benefit obligation 75,152,540 62,980,939

Changes in the fair value of plan assets (Rs.)

Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Opening fair value of plan assets 18,491,154 17,982,945
Expected return on plan assets 1,557,617 1,569,374
Actuarial gain/(loss) on plan assets 641,263 (250,707)
Contributions by employer 6,275,480 -
Benefits paid (4,510,959) (810,458)
Closing fair value of plan assets 22,454,555 18,491,154

The Company expects to contribute Rs.10,000,000 in the qualifying insurance policy during 2009-10.

Major categories of plan assets as a percentage of the fair value of total plan assets
Particulars As at As at
31 March 2009 31 March 2008
Qualifying insurance policies from the insurer 100% 100%
18. Notes to the accounts

Principal assumptions used in determining gratuity benefit obligations for the Company's plan (Rs.)
Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Discount rate 6.40% 7.60%
Expected rate of return on plan assets 7.50% 7.50%
Salary increase 10% for Executives 10% for Executives
7% for Workers 7% for Workers
Employee turnover 10% for Executives 10% for Executives
2% for Workers 2% for Workers
Retirement age 55 - 60 Years 55 - 60 Years
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and
other relevant factors such as supply and demand factors in the employment market.
The overall expected rate of return on plan assets is determined based on the market prices prevailing on that date,
applicable to the period over which the obligation is to be settled.

Amounts for the current and previous three periods (Rs.)

Particulars As at As at As at As at
31 March 2009 31 March 2008 31 March 2007 31 March 2006
Defined benefit obligation 75,152,540 62,980,939 51,632,939 55,673,233
Plan assets 22,454,555 18,491,154 17,982,945 18,726,037
(Deficit) (52,697,985) (44,489,785) (33,649,994) (36,947,196)
Experienced adjustments on plan liabilities (2,341,056) (293,399) (904,245) -
Experienced adjustments on plan assets 641,263 (250,707) 149,941 (105,070)

12. Segmental reporting

Business segments:
The Company's sole business segment is 'Beer'. Consequently, the requirement for separate business segment disclosures as
required under AS 17 - ‘Segment Reporting’ is not applicable.
Geographical segments:
The Company operates in two principal geographical areas of the world: India and rest of the world
The accounting principles used in the preparation of the financial statements are also consistently applied to record income and
expenditure in individual segments. Income and direct expenses in relation to segments are categorised based on items that are
individually identifiable to that segment, while the remainder of costs are apportioned on an appropriate basis. Certain expenses
are not specifically allocable to the individual segments as these expenses are common in nature. The Company therefore
believes that it is not practicable to provide segment disclosure relating to such expenses and accordingly such expenses are
separately disclosed as unallocated and directly charged against total income.
Certain segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used
by the segment and consist principally of fixed assets, inventories, sundry debtors and loans and advances. Segment liabilities
include trade creditors, creditors for expenses and other operating liabilities and provisions. Certain assets and liabilities that are
not specifically allocable to the individual segments have been separately disclosed as unallocated.
Revenue For the year ended For the year ended
31 March 2009 31 March 2008
India 12,999,144,293 10,558,776,583
Rest of world 161,031,946 67,529,043
13,160,176,239 10,626,305,626

Segment asset As at As at
31 March 2009 31 March 2008
India 18,060,449,424 15,556,454,184
Rest of world 5,990,695 2,853,344
18,066,440,119 15,559,307,528

SKOL Breweries Limited

 Schedules to the financial statements
40-41
18. Notes to the accounts

13. Provisions for claims

The provisions is utilised to settle previously anticipated and determined adverse outcomes of legal cases against
the Company. The provision is based on independent advice obtained by the Company from external legal counsel.
The time frame of utilisation of the provision is determined by the course of the legal proceedings.

Particulars For the year ended For the year ended

31 March 2009 31 March 2008
Provision for indirect tax cases
Opening balance 171,556,592 260,118,088
Add: Addition during the year 60,416,512 -
Less: Unused amounts reversed during the year - (88,561,496)
Closing balance 231,973,104 171,556,592
Provision for water charges
Opening balance 53,073,739 20,376,892
Add: Addition during the year 14,572,867 32,696,847
Closing balance 67,646,606 53,073,739

Provision for indirect taxes

Details of provisions made during the year are:
(i) Demand for non-submission of statutory forms
A. Excise duty:
The Uttar Pradesh State Excise Department has raised a demand against non-submission of Excise Verification
Certificates ("EVC") for the years 2002-03 to 2007-08. The EVCs' are required to be submitted to the authorities within
90 days from the date of sale. Based on an assessment of the possibility of collection of the forms the Company has
provided Rs. 19,264,044 against the said liability.
B. Sales tax:
Based on an assessment of the possibility of collecting of forms the Company has made the following provisions:
a) The Maharashtra Sales Tax Authorities have raised a demand under Bombay Sales Tax Act and
Central Sales Tax Act for the year 2002-03 for non-submission of forms. The Company has challenged the alleged
order before the Maharashtra Sales Tax Tribunal and the matter has been remanded back for fresh hearing. The
Company has provided Rs. 9,150,922 in the current year.
b) The Maharashtra Sales Tax Authorities have raised a demand under Bombay Sales Tax Act and Central Sales Tax
Act for the year 2002-03 on account of non-submission of forms. An appeal has been filed before the Joint
Commissioner (Appeals) and the matter is pending for hearing. The Company has provided Rs. 4,984,290 in the
current year.
c) The Company has assessed the status of pending statutory C forms and accordingly created provision of
Rs. 6,760,859 based on the ageing of the pending statutory forms to be collected.
d) The Karnataka Commercial Tax authorities have raised a demand for the years 2002-03 and 2003-04 for non-
submission of statutory forms and tax on purchases from unregistered dealers. The Company has provided
Rs.1,895,250 in the current year.
(ii) Local Area Development Tax ("LADT"): The Haryana Sales Tax Authorities have raised a demand towards LADT for the
years 2000-01 to 2003-04 for purchases made. An appeal has been filed before the Joint Excise and Taxation Commissioner
(Appeals) and the same is pending for hearing. The Company had provided Rs. 4,695,960 in the earlier years. During the
current year the Company has made an additional provision of Rs. 5,354,466. The Company assesses the probability of an
adverse outcome of the case and accordingly has made a provision against this case.
(iii) For various other miscellaneous matters, the Company has provided Rs. 13,006,681 during the current year.
Provision for water charges
The Maharashtra Industrial Development Corporation ("MIDC") had, vide order no EE/E&M/785/2005 dated 25 May 2005,
made a demand for increase in water charges with retrospective effect from 1 Nov, 2001. Waluj Industries Association of
which the Company is a member has filed a writ petition against such demand in the Honourable High
Court of Aurangabad. The Honourable High Court has given a stay order against such increase in water charges.
However, the Company provides for the differential rate levied from 25 May 2005 (i.e. date of order) in the books pending final
outcome of the writ petition.
18. Notes to the accounts

14. Related parties

(i) Names of related parties and description of relationship with the Company:

Enterprises where control exists

Ultimate holding Company SABMiller plc
Holding Company SABMiller Breweries Private Limited
Significant influence SABMiller Asia & Africa BV
Names of other related parties with whom transactions have taken place during the year
1. Fellow subsidiaries MBL Property Developers Limited
S.p.A. Birra Peroni
MBL Investments Limited (Up to 30 September 2007)
SABMiller India Limited
SABMiller International BV
SABMiller Management (IN) BV
SABMiller Asia BV
SABMiller Africa & Asia (Pty) Limited
SABMiller Vietnam
2. Key managerial personnel Jean-Marc Delpon De Vaux, Managing Director

(ii) Related party transactions (Rs.)

Particulars For the year ended For the year ended
31 March 2009 31 March 2008
SABMiller Breweries Private Limited
Income from contract bottling 73,147,185 83,191,895
Purchase of traded goods and raw materials 84,587,436 41,910,792
Interest expense 16,267,273 2,758,904
Reimbursement of expenses incurred on behalf of the Company 59,519,691 58,634,966
Reimbursement of expenses incurred on behalf of other Companies 6,383,899 12,115,883
Loan repaid, net 173,645,418 -
Loan taken, net - 205,825,649
Sale of fixed assets - 1,352,663
SABMiller Asia & Africa BV
Reimbursement of expenses incurred on behalf of the Company 13,204,232 17,437,179
Reimbursement of expenses incurred on behalf of other Companies 3,594,927 2,730,681
SABMiller plc
Reimbursement of expenses incurred on behalf of other Companies 8,378,547 503,570
MBL Property Developers Limited
Interest expense 2,822 -
SABMiller Management (IN) BV
Management fees 515,999,971 409,179,310
S.p.A. Birra Peroni
Purchase of traded goods and raw materials 1,405,874 1,681,630
MBL Investments Limited
Refund of inter corporate deposit given - 108,697,878
Purchase of investment - 9,313,175
Interest income - 3,444,182

SKOL Breweries Limited

 Schedules to the financial statements
42-43

18. Notes to the accounts

Particulars For the year ended For the year ended

31 March 2009 31 March 2008
SABMiller India Limited
Interest expense 575,342 -
Loan taken, net 46,119,164 -
Reimbursement of expenses incurred on behalf of other Companies - 1,895,208
Interest income - 248,311
Refund of inter corporate deposit given - 9,249,723
SABMiller Asia BV
Reimbursement of expenses incurred on behalf of the Company 4,911,927 -
Reimbursement of expenses incurred on behalf of other Companies 7,107,664 -
SABMiller Africa & Asia (Pty) Limited
Purchase of traded goods and raw materials 870,604 108,761,522
Purchase of fixed assets - 738,310
SABMiller Vietnam
Reimbursement of expenses incurred on behalf of the Company 85,957 -
Reimbursement of expenses incurred on behalf of other Companies 688,142 -
SABMiller International BV
Reimbursement of expenses incurred on behalf of the Company - 217,094
Key managerial personnel
Remuneration 20,819,277 18,219,410

(iii) Amount outstanding as at the balance sheet date: (Rs)

Particulars As at As at
31 March 2009 31 March 2008
SABMiller Breweries Private Limited:
Unsecured loan 211,624,493 385,269,911
SABMiller plc
Receivable from group Companies 1,872,054 1,001,003
SABMiller Asia & Africa BV
Payable to group Companies 1,163,486 12,953,750
SABMiller India Limited
Unsecured loan 46,119,164 -
SABMiller Management (IN) BV BV::
Payable to group Companies 1,447,043,134 982,643,160
S.p.A. Birra Peroni
Creditors 476,747 1,334,068
SABMiller International BV
Payable to group Companies - 1,290,001
SABMiller Africa & Asia (Pty) Limited
Payable to group Companies - 9,974,109

(iv) The Company has obtained unsecured loans from its holding Company and a fellow subsidiary for which no terms and
tenure for repayment have been specified. The loan from the fellow subsidiary is interest free. No interest rate is specified
for the loan obtained from the holding Company, however, the holding Company recovers the
actual interest cost incurred by it from the Company on the loan given.
(v) Corporate guarantee has been given by SABMiller plc for loan facility obtained by the Company as at balance sheet date
amounting to Rs. 2,364,241,360 (previous year: Rs. 600,600,334).
(vi) SABMiller plc operates a variety of equity-settled share-based compensation plans for few select employees of the
Company. (Refer note 20 below for further details).
18. Notes to the accounts

15. Deferred tax assets/ (liabilities) (Rs.)

P articulars As at As at
31 March 2009 31 March 2008
Deferred tax assets
Investments 180,147 180,147
Debtors 72,926,057 94,153,813
Loans and advances 73,825,954 51,127,403
Provision for retirement benefits 33,925,557 31,571,602
Provision for claims 54,242,838 52,349,240
Others 3,511,469 7,681,544
Unabsorbed depreciation 956,544,840 728,559,450
Total 1,195,156,862 965,623,199
Deferred tax liabilities
Fixed assets 1,195,156,862 1,029,367,235
Total 1,195,156,862 1,029,367,235
Deferred tax liabilities, net - (63,744,036)

In view of the accumulated losses and in accordance with AS 22 - "Accounting for taxes on income", deferred tax assets on
unabsorbed depreciation and other temporary timing differences have been recognised only to the extent of those timing
differences, the reversal of which will result in sufficient taxable income.

16. Derivative instruments and un-hedged foreign currency exposure

Derivative instruments
Particulars Purpose As at As at
31 March 2009 31 March 2008
Forward contract Towards repayment USD 3,320,407 JPY 113,010,836
of foreign currency loan
Forward contract Towards repayment EURO 835,842 -
of sundry creditors
Currency swap contract Towards repayment USD 3,500,000 USD 7,500,000
of foreign currency loan
Currency swap contract Towards repayment JPY 933,000,000 JPY 260,000,000
of foreign currency loan
Particulars of un-hedged foreign currency exposure as at the balance sheet date
Underlying
asset / liability As at March 2009 As at March 2008

Foreign currency Amount in Rs. Foreign currency Amount in Rs.

amount amount
Bank balance USD 18,230 928,808 USD 237,368 9,504,220
JPY 23,425,801 12,150,963 JPY 111,163,791 44,474,410
Sundry debtors USD 117,580 5,990,695 USD 71,262 2,853,344
Receivable from group USD 36,743 1,872,054 - -
Companies
Sundry creditors USD 2,496,972 (127,220,744) USD 645,120 (25,830,605)
EURO 1,378,691 (93,034,069) EURO 950,423 (54,009,069)
Interest accrued but USD 152,521 (7,770,948) USD 266,437 (10,668,131)
not due JPY 806,296 (418,226) - -
Payable to group ZAR 215,604 (1,163,486) ZAR 2,635,493 (12,953,750)
Companies - - USD 5,409 (216,587)
Total (208,664,953) (46,846,168)

SKOL Breweries Limited

 Schedules to the financial statements
44-45

18. Notes to the accounts

17. Provision for impairment of fixed assets
The impairment loss amounting to Rs. 117,306,243 for the year ended 31 March 2008 represents the write down of certain fixed
assets to their recoverable amount. These fixed assets have been rendered as redundant / idle as a result of significant capacity
expansion at certain breweries and have been identified as such based on the physical verification conducted by the management
during previous year.
18. Managerial remuneration
The details of remuneration paid to the managing director are as follows: (Rs.)
Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Salary and allowance 14,795,083 15,210,325
Contribution to Provident Fund 630,654 –
Stock Compensation Cost 5,127,931 2,018,039
Perquisites 265,609 991,046
Total 20,819,277 18,219,410
Note: As the liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to managing director
is not ascertainable and, therefore not included above.
19
19. Based on the confirmations received from the suppliers who provide goods and services to the Company regarding their status
under the Micro, Small and Medium Enterprises Development Act, 2006, the Company has prepared the following disclosure as
required under the said Act. The Company however has not received any claim for interest from any supplier under the said Act.
(Rs.)
Particulars As at As at
31 March 2009 31 March 2008
(i) The principal amount remaining unpaid to any 14,096,363 34,095,709
supplier as at the end of each accounting year;
(ii) The amount of interest paid by the Company along - -
with the amounts of the payment made to the supplier
beyond the appointed day during the year;
(iii)The amount of interest due and payable for the period 525,113 191,971
of delay in making payment (which have been paid but beyond
the appointed day during the year) but without adding the
interest specified under this Act;
(iv)The amount of interest accrued and 1,060,236 535,123
remaining unpaid at the end of the year
(v) The amount of further interest remaining due and 535,123 343,152
payable even in the succeeding years, until such date
when the interest dues as above are actually
paid to the small enterprise.
20. Operating leases
The Company is obligated under non-cancellable operating leases for a brewing facility and other office premises which are
renewable at the option of the lessor and lessee. The total lease rental expense under non-cancellable operating leases amounted
to Rs.71,318,214 (previous year: Rs. 8,260,160) for the year ended 31 March 2009. Future minimum lease payments under
non-cancellable operating leases are as follows: (Rs.)
Period As at As at
31 March 2009 31 March 2008
Not later than 1 year 67,342,145 16,336,414
Later than 1 year and not later than 5 years 56,886,147 32,588,625
Later than 5 years - -
The Company is also obligated under cancellable lease for residential, vehicles and office premises, which are renewable at the
option of both the lessor and lessee. The total rental expense under cancellable operating lease entered amounted to
Rs. 99,066,598 (previous year: Rs. 67,001,641) for the year ended 31 March 2009.
21. Employee stock compensation cost
Guidance Note on "Accounting for Employee Share Based Payments" issued by the ICAI ('the Guidance Note') establishes
financial and reporting principles for employees share based payments plans. The Guidance Note applies to employee share
based payment plans, the grant date in respect of which falls on or after 1 April 2005. SABMiller plc ('the Group') operates a
variety of equity-settled share-based compensation plans for the employees of the Company.
18. Notes to the accounts
(i) During the year ended 31 March 2009, the Group had the following share-based payment arrangements for
the employees of the Company.
Executive Share Option Scheme [Approved and (No 2) Scheme]
Particulars As at As at
31 March 2009 31 March 2008
Date of grant 16 May 2008 18 May 2007
Number of shares granted 137,550 92,200
Method of settlement Equity Equity
Contractual life 10 years 10 years
Vesting period 3 years 3 years
Vesting conditions Achievement of a target Achievement of a target
growth in earnings per share growth in earnings per share

International Performance Share Award Sub-Scheme

Particulars As at As at
31 March 2009 31 March 2008
Date of grant 16 May 2008 18 May 2007
Number of shares granted 9,000 7,000
Method of settlement Equity Equity
Contractual life 10 years 10 years
Vesting period 3 years 3 years
Vesting conditions Achievement of a target Achievement of a target
growth in earnings per share growth in earnings per share
(ii) The details of the activity of shares issued after 1 April 2005 under Executive Share Option Scheme [Approved and (No 2)
Scheme] are as follows:

Particulars 31 March 2009 31 March 2008

Number of Options Weighted average Number of Options Weighted average

exercise price (Rs) exercise price (Rs)
Outstanding at the beginning of the year 217,877 866 125,677 801
Granted during the year 137,550 1,036 92,200 942
Lapsed during the year 48,550 986 3,950 794
Exercised during the year 29,050 661 - -
Transferred during the year * - - 38,750 779
Outstanding at the end of the year 277,827 950 217,877 866
Exercisable at the end of the year 21,700 661 - -

* The options transferred represents options relating to employees transferred to other companies within the SABMiller Group during the pervious
year.
The weighted average share price at the date of exercise for stock options exercised during the year was Rs. 1,001 (previous year: Rs. Nil).
The options outstanding as at 31 March 2009 had a weighted average remaining contractual life of 8.1 years (previous year: 8.3 years).
The details of the activity of shares issued after 1 April 2005 under International Performance Share Award Sub-Scheme are as follows:

Particulars 31 March 2009 31 March 2008

Number of Options Weighted average Number of Options Weighted average

exercise price (Rs) exercise price (Rs)
Outstanding at the beginning of the year 7,000 - - -
Granted during the year 9,000 - 7,000 -
Outstanding at the end of the year 16,000 - 7,000 -
Exercisable at the end of the year - - - -
The weighted average share price at the date of exercise for stock options exercised during the year was Rs. Nil (previous year: Rs. Nil). The options
outstanding as at 31 March 2009 had a weighted average remaining contractual life of 8.7 years (previous year: 9.1 years).

SKOL Breweries Limited

 Schedules to the financial statements
46-47
Schedules to the financial statements

18. Notes to the accounts

(iii) The weighted average fair value of stock options granted during the year is Rs. 362 (previous year: Rs. 327). The estimate
of fair value on the date of the grant was made using the Binomial model valuation and Monte Carlo model with the following
assumptions:
Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Share price at the grant date Rs. 1,051 Rs. 961
Exercise price at the grant date Rs. 1,036/ Rs. Nil Rs. 942/ Rs. Nil
Expected volatility 25% 22.5%
Contractual life (vesting and exercise period) in years 10 years 10 years
Expected dividends 2.11% 2.11%
Average risk-free interest rate 4.74% 4.48%

The expected volatility was determined based on historical daily share price volatility of SABMiller plc share price over the last
6 years.
(iv) Since the Company used the intrinsic value method the impact on the reported net profit and earnings per share is computed
by applying the fair value based method. The Guidance Note requires the Proforma disclosures of the impact of the fair value
method of accounting of employee stock compensation accounting in the financial statements. Applying the fair value
based method defined in the said Guidance Note, the impact on the reported net profit and earnings per share would be
as follows:
(Rs.)
Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Net (loss)/ income as reported (648,759,941) 344,777,187
Add: Employee stock compensation under intrinsic value method - -
Less: Employee stock compensation under fair value method (32,765,238) (18,391,746)
Proforma net income (681,525,179) 326,385,441
Earnings per share as reported
- Basic (2.81) 1.52
- Diluted (2.81) 1.49
Proforma earnings per share
- Basic (2.95) 1.44
- Diluted (2.95) 1.41

22. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer
pricing legislation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and
documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the
international transactions entered into with the associated enterprises during the financial year and expects such records to be in
existence latest by September 2009 as required under law. Management is of the opinion that its international transactions are at
arm's length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax
expense and that of provision for taxation.
23. The comparative figures have been regrouped/ reclassified, wherever necessary, to conform to the current year's presentation.

for SKOL Breweries Limited

Jean-Marc Delpon De Vaux Jonathan Andrew Kirby

Managing Director Director
(Bangalore)

Kevin Heydenrych Pramod S M

Chief Finance Officer Company Secretary
(Bangalore) (Bangalore)

Hong Kong
08 July 2009
“Water is the most critical resource issue of our lifetime
and our children’s lifetime.The health of our waters is the
principal measure of how we live on the land.”

SKOL Breweries Limited

 Cash flow statement
48-49

(Rs.)
Particulars For the year ended For the year ended
31 March 2009 31 March 2008
Cash flows from operating activities
(Loss)/ Profit before tax (725,733,738) 408,545,685
Adjustments:
Provision for impairment of fixed assets (7,066,845) 117,306,243
Opening adjustment for returnable containers 340,493,099 -
Depreciation 651,299,955 858,090,043
Dividend income (177,101) -
Interest and financing charges 433,651,970 153,515,535
Interest income (2,008,395) (52,435,809)
Gain on prepayment of sales tax deferral loan (14,322,809) -
(Profit) on sale of fixed assets/ assets discarded (15,004,247) (111,962,935)
Unrealised foreign exchange difference 8,506,675 (36,484,812)
Operating cash flows before working capital changes 669,638,564 1,336,573,949
(Increase) in sundry debtors (853,425,251) (1,051,637,153)
Decrease/ (Increase) in loans and advances 169,888,453 (233,978,153)
(Increase) in inventories (215,102,652) (408,963,371)
Increase in current liabilities and provisions 1,263,286,554 856,462,005
Cash generated from operations 1,034,285,668 498,457,278
Taxes paid (40,108,406) (46,116,860)
Net cash provided by operating activities a 994,177,262 452,340,418
Cash flows from investing activities
Purchase of fixed assets (2,746,590,974) (3,489,529,623)
Proceeds from sale of fixed assets 17,417,206 179,184,235
Inter-corporate deposits, net - 117,947,601
Dividend income 177,101 -
Interest received 1,510,239 52,367,945
Purchase of investments - (9,181,175)
Net cash used in investing activities b (2,727,486,428) (3,149,211,017)
Cash flows from financing activities
Proceeds from borrowings 41,731,939,081 20,516,944,296
Repayment of borrowings (39,399,711,294) (21,374,219,612)
Prepayment of sales tax deferral loan (18,993,546) -
Interest and financing charges paid (572,831,153) (183,562,500)
Unclaimed dividend paid (1,028,895) (740,705)
Net cash provided by/ (used in) by financing activities c 1,739,374,193 (1,041,578,521)
Effect of exchange rate changes on cash and cash equivalents d 79,309 2,237,372
Net increase in cash and cash equivalents a+b+c+d 6,144,336 (3,736,211,748)

Cash and cash equivalents at the beginning of the year 311,251,107 4,047,462,855
Cash and cash equivalents at the end of the year 317,395,443 311,251,107
Net increase in cash and cash equivalents* 6,144,336 (3,736,211,748)

* Includes Rs. 13,734,611 (previous year: Rs. 11,864,657) in margin money deposit account.

As per our report attached

for B S R & Co. for SKOL Breweries Limited

Chartered Accountants

Zubin 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
Additional information pursuant to Part IV
of Schedule VI of the Companies Act, 1956.

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

COMPANY’S

I Registration Details
Registration No : 49687 State Code :11
Balance Sheet Date: 31-Mar-09

II Capital Raised during the year (Amount In Rs Thousands)

Public Issue Rights Issue
Nil Nil

Bonus Issue Private Placement

Nil Nil

III Position of Mobilisation and Deployment of Funds (Amount In Rs Thousands)

Total Liabilities Total Assets
11,453,746 11,453,746
Sources of Funds
Paid - up Capital Reserves and Surplus
2,311,837 6,140,638

Secured Loans Unsecured Loans

0 6,170,032

Application of Funds
Net Fixed Assets Investments
11,014,325 11,359

Net Current Assets Misc Expenditure

1,250,339 1,457,236

Accumulated Losses
382,545

IV Performance of the Company (Amount In Rs Thousands)

Turnover * Total Expenditure
13,303,749 14,215,434

Profit/(Loss) Before Tax Profit/ Loss After Tax

(725,734) (648,760)

Earnings Per Share in Rs Dividend Rate %

(2.81) 0

V Generic Names of Three Principal Products/ Services of the Company (as per monetary terms)
Item code No [ITC Code] 220300
Product Description Beer

for SKOL Breweries Limited

Jean-Marc Delpon De Vaux Jonathan Andrew Kirby
Managing Director Director
(Bangalore)
Kevin Heydenrych Pramod S M
Chief Finance Officer Company Secretary
(Bangalore) (Bangalore)
Hong Kong
8 July 2009

SKOL Breweries Limited

“Do one
“Keep a pitcher
thing each
of water
day that
in the
willrefrigerator
save water.instead
of running
Even if savings
the tap
arefor
small,
coldevery
drinks, drop
so that
counts.”
every drop
goes down you not the drain.”
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SKOL BREWERIES LIMITED

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Regd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400093
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PROXY FORM
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I/We
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of
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being a Member(s) of the above named Company hereby appoint

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of ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
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(or failing whom) ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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of ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
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as my/our proxy to attend and vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at
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M.C. Ghia Hall, Bhogilal Hargovindas Building, 2nd Floor, 18/20, K. Dubash Marg, behind Prince of Wales Museum, Kala Ghoda,
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Mumbai – 400 001 on Tuesday, the 15th September 2009 at 3.00 p.m. and at any adjournment thereof.
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Signed this day of

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Signed by the said

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N.B.: This Proxy form must reach the Registered Office of the Company not less than 48
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hours before the time of holding the meeting.

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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Please cut along this line- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

 --
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SKOL BREWERIES LIMITED

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Regd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400093
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ATTENDANCE SLIP
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Please complete this Attendance Slip and hand it over at the entrance of the Meeting Hall.
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SKOL Breweries Limited

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No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400093

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I hereby record my presence at the Annual General Meeting of the Company to be held at M.C. Ghia Hall,
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Bhogilal Hargovindas Building, 2nd Floor, 18/20, K. Dubash Marg, behind Prince of Wales Museum, Kala Ghoda,
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Mumbai – 400 001 on Tuesday, the 15th September 2009 at 3.00 p.m.
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Member’s Name (in Block Capitals):

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Share Ledger Folio No. :

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DP ID No.
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Client ID No.
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Member’s/Proxy’s Signature:
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SKOL Breweries Limited

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“Water, like religion and ideology, has the power
to move millions of people.”