skol breweries ltdannualreports

SKOL Breweries Limited1, Mahal Industrial Estate, Mahakali Caves Road, Andheri East, Mumbai - 400 093Maharashtra, India

Tel +91(0)22 - 67103890-93 Fax +91(0)22 - 67103894

www.sabmiller.in

SKOL Breweries Limited Annual Report 2008

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Managing Director Speaks

Dear Shareholders,I extend my warm greetings to all of you and have the pleasure of presenting the Annual Report for the year 2007-08.

The Indian economy is generally on a roll and the GDP growth rate has been at 8.7% for the year ended March 2008. This is commendable as the last three years growth rate has been around 9%. The only concern now is the slow rate of agricultural growth, a marginal slow down in manufacturing sector and the biggest challenge being control of inflation primarily led by galloping oil prices.

The consumer confidence and raising income levels help in accelerating the momentum in the beer industry. Increasing urbanization and development of a large middle class is bringing in new consumers, with new attitudes and behaviors towards beer.

With the Indian economy doing so well everyone is looking at India, SABMiller is no exception. Every three years the SABMiller group has a global leadership conference in which the top 300 executives meet to discuss the future

prospects of the Industry and the Group. This time the conference was held in India keeping in mind the growth potential of the Indian beer market and the way the Indian economy has been performing. The holding of the Conference in India shows the commitment and confidence that the SABMiller Group has in India, in the management team here and in India’s growth story.

I am happy to report that the year 2007-2008 has been a good year for the Company. The Company has made a profit of Rs 34.4 Crores. The net turnover of the Company has increased from Rs. 897.59 crores to Rs. 1086.67 crores resulting in a growth of 25%. We are happy to say that the net turnover has crossed Rs.1000 crores.

The industry has grown at 14.3% and our growth is 15.8%, which is well above the Industry’s average. This growth has, however, been limited by production capacity which is being addressed. Your Company is taking steps to increase its manufacturing capacity not only to meet the present demand but also the future demand.

Our core brands are...

2005 2006 2007 2008

1200

1000

800

600

400

200

0

1086

501

611

897

Years

Sales in Rs. Crores

Hayward’s 5000

Royal Challenge

Knockout

Launched in 1983, Hayward’s 5000 is synonymous with strong beer and is one of the largest selling beers in India. The hallmark of an original and authentic strong beer, it perfectly combines strength and quality to meet the high expectations of today’s demanding consumers.

Hayward’s 5000 has recorded a growth of 13%. The growth could have been much higher but for our inability to participate fully in Tamil Nadu.

During the year under review the Brand has signed up Bollywood superstars Mr. Sanjay Dutt and Mr. Sunil Shetty as brand ambassadors. The macho image of the stars goes well with the strong image of the Brand. This association will take the Brand to new heights.

Launched in the year 1983, Royal Challenge Premium Lager is the second largest selling mild beer in India. The brand positioning is that this is the beer for the discerning consumer who has the confidence to make a choice based on superior taste and knowledge and stand apart rather than be part of a crowd.

It offers a difference with an edge. Besides its international class packaging, premium image and path breaking advertising, what sets the brand apart is a distinctly smooth and easy flowing taste.

Royal Challenge has grown by 12.8%. In Andhra Pradesh, the largest beer market in the Country, the brand is the market leader with a mild beer segment share of 52.8% and has grown by 20.9%.

Launched in 1984, Knock Out has clearly carved for itself a distinctive segment –

rd“The Strongest Beer” and is the 3 largest selling strong beer brand in the country. It has continued to perform well and has grown at 20.5% over the pervious year. The brand has strong presence in most southern and central states in India. The brand has Kannada action hero Mr. Darshan as its ambassador.

SKOL Breweries Limited 1

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more responsive and in tune with market conditions.

On the manufacturing front there has been an all round improvement in the Company. Water usage per HL is down 14%, Power Consumption is down 6%. This is in addition to the saving of 14% in water and 13% in power last year. These actions continue to enhance our competitiveness in the market.

De-regulation of the market remains the biggest challenge for the Industry. There has been some progress but a lot needs to be done. Tamil Nadu opening its market for imports from other states is good news, considering that it is the Second biggest beer market in India. But the import duty fees being charged by Tamil Nadu are on the higher side. Your Company along with AIBA is in the forefront of lobbying with the various state governments for the rationalization in policies across states in this Industry.

Your Company believes in sustainable growth. Water is very important to sustaining of life and a critical raw material for our industry. Your Company believes in saving water and has adopted the 5R' philosophy at its manufacturing locations. Namely, Replenish, Reduce, Recycle, Re-use and Redistribute. Your Company has tied up with CII and other stakeholders to identify opportunities to manage watersheds and harvesting of rain water to augment the reserves that we have. All the new plants we are

putting up will have the latest technology for conserving water and we will benchmark our water usage to global standards. Even in our Saanjhi Unnati programme we are looking at ways to grow barley using less water.

In terms of our Corporate Social Responsibility, an agreement has been signed with the ILO for promoting HIV/AIDS awareness. The Company’s Saanjhi Unnati Programme for development of Barley cultivation in India has been progressing very well and a large number of farmers particularly in Rajasthan have been benefited.

We believe that the Saanjhi Unnati programme will in the long run help us to be self sufficient in Barley and at the same time will have a positive impact on the lives of the farmers, thereby being a win-win situation for both.

As India is one of the fastest growing markets, your Company will continue to receive strong regional and global backing from SABMiller, and access to its intellectual, technology, brands and human capital.

I wish to thank each one of you for your support. We look forward to an exciting year ahead of us.

Cheers

Jean - Marc Delpon de Vaux

Foster’sCompleted one year after coming into the SABMiller stable. The Brand had not been performing up to its potential before it was taken over by us on account of production and distribution constraints. We are happy to state that the decline which the brand was facing has not only been stemmed but the brand has grown over 45%. The Brand is now available all over India. Foster's is a clear leader in the premium segment both in volume and image terms. It leads the development of what we call the worthmore segment in India.

For the year ended March 08 we had an all India market share of 34.8%. The Company is in the forefront of new product development and firmly believes that in order to grow the market it has to continuously innovate. As a part of this innovation the Company proposes to launch Indus Pride in the Mild segment which will be India's first 100% malt-based Beer alongwith a 100% malt-based beverage. The beer has been specially developed in accordance with research findings to suit the Indian tastes.

Your Company has introduced its global brand Peroni in Mumbai last year and the same has also been launched in New Delhi and Bangalore. Peroni Nastro Azzurro is an intensely crisp, dry and refreshing lager, with a clean character & clarity. It is expertly brewed in Italy to the original recipe since 1963 and has an unmistakable touch of Italian style. This premium beer uses the finest variety of spring-planted barley and the highest quality maize, malts and hops. It has been very well received in the market. In Mumbai it already has 35% market share of the imported beer market.

The Company is evaluating the market to see which other international brands it can launch in India.

During the last couple of years five major international brewers have entered into the Indian Beer market. With Heineken likely to partner UB the market dynamics is going to undergo a sea change. With increased competition the market is only expected to grow.

Your Company in order to take the business to the next level of growth has restructured itself as an organization in order to drive profitable growth. The new structure will make the Company

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SKOL Breweries Limited

THE BREWERY PROCESS

BOILINGLAUTERINGMASHINGMILLING

FILTERING MATURING FERMENTINGCOOLING

WHIRLPOOLING

PACKAGING DISTRIBUTION

SKOL currently manages nine breweries across India. These breweries share a common basic function; to brew beer to be sold to our customers. Beer is a beverage produced by the fermentation of cereal sugars by yeast. The brewing process is very similar at all of our breweries to ensure that are brands are produced consistently across the country.

Throughout the year our breweries focused on making sure our processes were consistent across the country. In addition, much effort has been made to increase our capability by enhancing the competence levels of our workers, installing new plant and equipment and ensuring that all our breweries run smoothly and according to their design.

All this has been done to ensure that our customers have ready access to our brands, at the right price and in perfect condition.

During the year our breweries faced some common issues which were dealt with effectively. These include variable quality of raw materials (especially malt and glass bottles), easing environmental stress by reducing power and water usage rates and improving the quality of our brewing and packaging processes to provide our customers with the best beer possible.

In addition to brewing beer and consistently meeting market demand, management and staff at all our breweries demonstrated commitment to serving their local communities, protecting the environment and assuring the safety and good health of everybody working in or visiting our facilities.

During the year SKOL introduced the concept of “Campus Breweries”. This concept is an effective method of developing and communicating learnings from one brewery to others. This enables other breweries in the group to learn from each other and develop faster. Campus breweries have been set up at our larger breweries to perform specific projects, which are of benefit to all the other breweries in the group. The driving force for this is a manufacturing excellence programme (MEP), which is the tool for

continuous improvement at all breweries. The MEP “tree” symbol is displayed at all breweries and reminds everyone what we are trying to achieve.


Here are some highlights from our breweries:

The brewery motto, “Solid 10 in 10”, reflects the team’s commitment to achieving the best tasting beer. Developing staff capability was a priority in 2007/8. RBL is the “Campus Brewery” focusing on hygiene and cleanliness.

Significant investment has been made enabling the successful commissioning of a new can packaging line, effluent and water treatment plants, filtration plant and yeast drier. Thus the overall capacity of the brewery was significantly enhanced.

In the community the team facilitated plantation of 900 trees, organized blood donation camp, HIV awareness workshops, health camps and polio vaccinations drives.

Construction of a new 1 million hl pa brewery on the current site commenced. The existing brewery maintained very high quality standards.

Rochees Breweries (RB), Rajasthan

Haryana Breweries (HB), Haryana

Central Distilleries & Breweries (CDB),Uttar PradeshBrewery capacity was enhanced by the commissioning of a new warehouse and

upgradation of brewing and packaging plants. In January 2008 Fosters Lager was brewed here for the first time.Management also focused on workplace safety and crisis management. A training plan was implemented to improve workplace competence even further.

A major clean up operation and a medical camp were held to help improve quality of life in the local community.

The major effort was to improve quality as the “Campus Brewery” focusing on best practice in bright beer production.

A competition was held for brewery staff to design the brewery motto. The winner was “SONERI SOMRAS SONERI SANDHI”.

A training session was held to certify 27 advanced tasters into the SABMiller Global (Beer) Tasting System. Delegates were from all over India.

The brewery stepped forward in terms of quality and safety management.

Pals (PB), Maharashtra

East Coast Breweries (ECB), Orissa

Barley Malt

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Environment and safety awareness sessions were held in the local community. The ECB team also drove HIV awareness and set up a health camp for the people of Cuttack.

Employees were encouraged to enjoy themselves at work (“puja, picnics & prizes”). An employee competition was held to decide on the brewery safety management statement.

ECB was nominated by the labour commissioner to receive the award for the best factory with the “Employer – Employee Relationship”

Managed by SKOL since 2003, CBL is our largest brewery.

Work also commenced to increase that capacity a further 50% (including a new 21,000 bottles per hour packaging line, draft beer unit, effluent/water treatment plants, solid fuel boiler). The brewery motto is “winning & working in teams”. There has been emphasis on team-building and skills enhancement.

Major strides in 2007/8 include implementation of a new maintenance management system and a major reduction in power and water usage ratios (the best in SABMiller India).

CBL was runner up in the SABMiller Africa and Asia “Best Brewery” competition.

CBL is the “Campus Brewery” for both yeast management and bottle washing.

The team has been very active in the community; health care programmes, disease awareness programmes (AIDS, TB, Polio), providing drinking water and street lighting in Shivampet village and helping to develop the local school.

A new 15,000 units per hour canning line was commissioned. MBL is the “Campus Brewery” for the improvement of bottle labelling and outer packaging appearance.

There has been much focus on environment and safety management, both in the brewery and the local community. During the annual “Safety Awareness Week” employees were given training on managing safety in the home. Families were involved and industrial theatre was used as a communication tool.

Charminar Breweries (CB), Andhra Pradesh

Mysore Breweries (MB), Karnataka

All employees were given basic fire-fighting and first aid training. Several workers with more than 25 years service each had their achievement recognized at a ceremony in February.

Brewery capacity has been increased by upgrading cellars tanks and raw materials storage facilities. In August the brewery was awarded the SABMiller India “Best Brewery” award.

Malabar Breweries (MB), Kerala

SICA Breweries (SB), PuducherryA major expansion took place to increase capacity above 300,000 hl pa. Extensive upgrades took place in Brewing, Packaging and Utilities supply areas.

Management focused on workplace safety and environmental management improvement.

4


Board of DirectorsBoard of DirectorsBoard of DirectorsBoard of DirectorsBoard of Directors

Mr. Ari Mervis - Chairman

Mr. Jonathan Andrew Kirby

Ms. Sue Clark

Mr. Richard (Pete) L Lloyd

Ms. Maya Makanjee - up to 23.06.2008

Mr. T.S.R. Subramanian - from 23.06.2008

Mr. Jean-Marc Delpon de Vaux - Managing Director

Statutory AuditorsStatutory AuditorsStatutory AuditorsStatutory AuditorsStatutory Auditors

BSR & Co.,

Chartered Accountants

Maruthi Info-Tech Centre,

11-12/1, Inner Ring Road,

Koramangala, Bangalore – 560 071

BankersBankersBankersBankersBankers

Standard Chartered Bank

ABN Amro Bank

The Hongkong & Shanghai Banking Corporation

Societe Generale

ICICI Bank Limited

Registered OfficeRegistered OfficeRegistered OfficeRegistered OfficeRegistered Office

No.1, Mahal Industrial Estate,

Mahakali Road,

Andheri (East),

Mumbai – 400 093

Corporate OfficeCorporate OfficeCorporate OfficeCorporate OfficeCorporate Office

Jalahalli Camp Road,

Yeshwanthpur,

Bangalore-560 022

Audit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeAudit Committee

Mr. Jonathan Andrew Kirby - Chairman

Mr. Ari Mervis

Ms. Maya Makanjee - - - - - up to 23.06.2008

Mr. Richard (Pete) L Lloyd - from 23.06.2008

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

Sharepro Services (India) Pvt Ltd

Satam Estate, 3rd Floor,

Above Bank of Baroda,

Cardinal Gracious Road,

Chakala, Andheri (E), Mumbai – 400 099


HB: Haryana Breweries

CDB: Central Distilleries & Breweries

RB: Rochees Breweries

PALS: PALS

ECB: East Coast Breweries

CB: Charminar Breweries

MB: Mysore Breweries

Malabar: Malabar Breweries

SICA: SICA Breweries

Uttar Pradesh

Haryana

Rajasthan

Maharashtra

Andhra Pradesh

Karnataka

KeralaPondicherry

Orissa

CDB

HBRB

ECBPALS

MB

Malabar

SICA

CB

4

5

Notice

NOTICENOTICENOTICENOTICENOTICE is hereby given that the 19th

Annual General Meeting of the members

of the Company will be held at M.C. GhiaHall, Bhogilal Hargovindas Building, 2nd

floor, 18/20, K. Dubash Marg, BehindPrince of Wales Museum, Kala Ghoda,

Mumbai – 400 001 on Wednesday, the10th September, 2008 at 3.00 p.m. to

transact the following business:

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

01. To receive, consider and adopt the

Audited Balance Sheet as at 31st

March, 2008 and the Profit & Loss

Account for the year ended on thatdate and the Report of the Directors

and Auditors thereon.

02. To appoint a Director in place of

Mr. Jonathan Andrew Kirby, whoretires by rotation at this meeting

and being eligible, offers himself forre-appointment.

03. RESOLRESOLRESOLRESOLRESOLVED THAVED THAVED THAVED THAVED THATTTTT M/s. BSR & Co.,Chartered Accountants, who retire

at the conclusion of this AnnualGeneral Meeting be and are hereby

appointed as Statutory Auditors ofthe Company till the next Annual

General Meeting at a remunerationto be fixed by the Board of Directors

and billed progressively.

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

04. To consider appointment of Mr. AriMervis as Director of the Company.

To consider and if thought fit, topass with or without modification,

the following Resolution as anOrdinary Resolution:

RESOLRESOLRESOLRESOLRESOLVED THAVED THAVED THAVED THAVED THATTTTT Mr. Ari Mervis,

who in terms of Section 260 of theCompanies Act, 1956 holds office till

the date of this Annual GeneralMeeting, and in respect of whom a

notice has been received from aMember under Section 257 of the

said Act, be and is hereby appointeda Director of the Company liable to

retire by rotation.

05. To consider appointment of

Mr. T.S.R. Subramanian as Directorof the Company.

To consider and if thought fit, topass with or without modification,

the following Resolution as anOrdinary Resolution:

RESOLRESOLRESOLRESOLRESOLVED THAVED THAVED THAVED THAVED THATTTTT Mr. T.S.R.Subramanian, who in terms of

Section 260 of the Companies Act,1956 holds office till the date of this

Annual General Meeting, and inrespect of whom a notice has been

received from a Member underSection 257 of the said Act, be and

is hereby appointed a Director of theCompany liable to retire by rotation.

06. To consider revision of remuneration

of Mr. Jean-Marc Delpon de Vaux,Managing Director of the Company.

To consider and if thought fit, topass, with or without modification/s,

the following Resolution as a SpecialResolution:

RESOLRESOLRESOLRESOLRESOLVED THAVED THAVED THAVED THAVED THATTTTT pursuant to theprovisions of Sections 198, 269,

309 and 310 and other applicableprovisions, if any, of the Companies

Act, 1956 (hereinafter called the“Act”) read with Schedule XIII to the

said Act as amended up to date orany statutory modification or re-

enactment thereof and subject tothe approval of shareholders and

Central Government, theremuneration payable to Mr. Jean-

Marc Delpon de Vaux is beingincreased as set out below with

liberty to the Directors to alter andvary the terms and conditions of the

remuneration as the case may be assuggested by the shareholders/

Central Government and agreed tobetween the Directors and Mr. Jean-

Marc Delpon de Vaux or as may bevaried in the General Meeting.

I. (a) Salary : Up to Rs. 25,00,000/- permonth

The annual increments will bedecided by the Board of Directors

depending upon the profitability ofthe Company and other relevant

factors.

All other terms and conditions asapproved by the Central

Government and members willremain same.

RESOLRESOLRESOLRESOLRESOLVED FURVED FURVED FURVED FURVED FURTHER THATHER THATHER THATHER THATHER THAT T T T T in the

event of loss or absence orinadequacy of profits during any

financial year, the aboveremuneration shall be treated as

minimum remuneration payable toMr. Jean-Marc Delpon de Vaux.

07. To consider increase in BorrowingPowers.


the following Resolution as a SpecialResolution:

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

Act, 1956 and other enablingprovisions, if any, of the said Act,

consent be and is hereby accordedto the Board of Directors of the

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

from one or more body corporate,banks or financial institutions or the

public by way of cash, creditadvances, deposits or other loans

whether secured or unsecured bymortgage, charge, hypothecation or

pledge of the Company’s assets andproperties whether movables and/or

immovables or stock-in-trade(including book debts, bills, raw

materials, stores and spare partsand components in stock or in

transit) work-in-progress and debtsand advances notwithstanding that

the sum or sums so borrowedtogether with the money’s, if any,

already borrowed by the Company(apart from the temporary loans

obtained from the Company’s

SKOL Breweries Limited6

7

bankers in the ordinary course of

business) may exceed in theaggregate paid-up capital of the

Company and its free reserveswhich have not been set part for any

specific purpose but so that thetotal amount up to which the

moneys may be so borrowed shallnot at any one time exceed

Rs.1500 crores.

08. To consider an increase in the

Authorized Share Capital of theCompany:


the following Resolution as a SpecialResolution.

RESOLRESOLRESOLRESOLRESOLVED THAVED THAVED THAVED THAVED THATTTTT in accordancewith the provisions of Section 94

and other applicable provisions ofthe Companies Act, 1956 (including

any statutory modification(s) or re-enactment thereof, for the time

being in force) the existingAuthorised Share Capital of the

Company be and is herebyincreased from Rs. 2,500,000,000

(Rupees Two hundred fifty croresonly) divided into 250,000,000

Equity shares of Rs.10/- (Rupeesten only) each to Rs. 3,000,000,000

(Rupees Three hundred crores only)divided into 300,000,000 Equity

shares of Rs.10/- (Rupees Ten only)each and the Memorandum of

Association of the Company bealtered accordingly.

RESOLRESOLRESOLRESOLRESOLVED FURVED FURVED FURVED FURVED FURTHER THATHER THATHER THATHER THATHER THATTTTT theexisting Clause V of the

Memorandum of Association be andis hereby substituted by the

following Clause V:

V. The Authorised Share Capital of the

Company is Rs. 3,000,000,000(Rupees Three hundred crores only)

divided into 300,000,000 Equityshares of Rs.10/- each. The

Company has power, from time totime, to increase or reduce its

capital and divide the shares in thecapital for the time being into several

classes and to attach theretorespectively such preferential,

deferred, qualified or other specialrights, privileges conditions orrestrictions as may be determined

by or in accordance with the Articlesof Association of the Company and

to vary, modify or abrogate anysuch right, privilege or condition or

restrictions in such manner as mayfor the time being be permitted by

the Articles of Association of theCompany or the legislative

provisions for the time being in forcein that behalf.

09. 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.

RESOLRESOLRESOLRESOLRESOLVED THAVED THAVED THAVED THAVED THATTTTT, pursuant to the

provisions of Section 81(1A) andother applicable provisions (if any) of

the Companies Act, 1956, theUnlisted Public Companies

(Preferential Allotment) Rules, 2003and the relevant provisions of the

Memorandum and Articles ofAssociation of the Company, the

consent of the Company be and ishereby accorded to offer, issue and/

or allot on preferential basis to

SABMiller Asia B.V. 50,000,000

Equity shares of the Company of theface value of Rs.10/- each at a

premium of Rs. 46/- per share.

RESOLRESOLRESOLRESOLRESOLVED FURVED FURVED FURVED FURVED FURTHER THATHER THATHER THATHER THATHER THATTTTT such

new equity shares shall rank paripassu with the existing equity shares

of the Company, except that theyshall not rank for dividend, if any,

declared or paid in respect of anyfinancial year of the Company prior

to the financial year in which they areallotted and shall rank for dividend

pari passu from the date of theirallotment in respect of the financial

year in which they are allotted.

RESOLRESOLRESOLRESOLRESOLVED FURVED FURVED FURVED FURVED FURTHER THATHER THATHER THATHER THATHER THAT T T T T Mr.

Jean-Marc Delpon de Vaux and Mr.Kevin Heydenrych be and are hereby

jointly and/or severally authorized tonegotiate, execute and deliver any

agreement, letter, deed or documentor any amendments or modifications

thereto in connection with theaforesaid preferential issue of shares

in favour of SABMiller Asia B.V. andto sign, execute, deliver and/or file all

relevant forms, filings, reports,documents, etc., required by any

applicable regulations including withany regulatory authorities or an

authorized dealer in terms of Indianexchange control regulations.

BY ORDER OF THE BOARD

Pramod S MCompany Secretary

Date : 23rd June, 2008Place : Bangalore

NOTES:NOTES:NOTES:NOTES:NOTES:

01. A member entitled to attend and

vote at the meeting is entitled toappoint a proxy to attend and vote

on a poll in his/her stead. A proxyneed not be a member of the

Company. Proxies in order to beeffective must be deposited at the

registered office of the Company notless than forty-eight hours before

the meeting. A blank proxy form isenclosed.

02. The Register of Members and theShare Transfer Books of the

Company will remain closed from1st September, 2008 to 10th

September, 2008 [both daysinclusive].

03. For convenience of members an

attendance slip is also annexed.Members are requested to affix their

signature at the space providedtherefore and handover the same at

the place of meeting. The proxy of amember should mark on the

attendance slip as Proxy. Membersare also requested to bring theircopies of the Annual Report to the

venue of the meeting.

04. All queries relating to non-receipt ofshare certificates after transfer/

transmission/ dematerialization/rematerialisation, mandates, change

of address, nomination, etc., may besent to the Registrar & Share

Transfer Agents, M/s. ShareproServices (India) Pvt. Ltd, Satam

Estate, 3rd Floor, Above Bank ofBaroda, Cardinal Gracious Road,

Chakala, Andheri (East), Mumbai400 099, Tel: (022) 67720334 /

67720300, Fax: (022) 28375646,Email [email protected].

05. Pursuant to Section 205C of theCompanies Act, 1956 all unclaimed

dividends up to the Financial Year1999-2000 have been transferred

to the Investor Education andProtection Fund. Members of the

erstwhile Mysore Breweries Limited,Pals Distilleries Limited, Charminar

Breweries Limited and SICABreweries Limited who have not yet

claimed their dividend for thefinancial year 2000-2001 and

thereafter, may claim from theCompany before the same is

transferred to the Fund. It may benoted that no claims shall lie against

the Company or the Fund in respectof individual amounts which were

unclaimed and unpaid for a period of

7 years and transferred to the Fundand no payment shall be made in

respect of any such claim.

Explanatory Statement pursuant to

Section 173(2) of the CompaniesAct, 1956.

Item Nos. 2, 4, 5, 6, 7, 8 and 9

A brief resume of the Directors

offering themselves for re-election isgiven below:

2. Mr. Jonathan Andrew Kirby is aB. Accounting (University of the

Witwatersrand), CA (SA) and has 21years of rich experience. He is the

CFO of SABMiller Africa.

Except for Mr. Jonathan Andrew

Kirby, no other Director is interestedin the aforesaid Resolution.

4. Mr. Ari Mervis is a B.Com with major

in Economics, Marketing andCommercial Law. He is the Managing

Director of SABMiller Asia. He hasheld a number of senior positions in

the SABMiller Group.

Except for Mr. Ari Mervis, no other

Director is interested in the aforesaidResolution.

5. Mr. T.S.R. Subramanian is a Diploma

in Mathematics from ImperialCollege, London and has done his

Masters in Public Administrationfrom Harvard University. He is an

Ex IAS officer who held varioussenior positions in the Government

including the post of CabinetSecretary to the Government

of India.

Except for Mr. T.S.R. Subramanian,

no other Director is interested in theaforesaid Resolution.

6. Mr. Jean-Marc Delpon de Vaux wasappointed as Managing Director of

the Company w.e.f. 1st August, 2006at the Board Meeting held on 17th

July, 2006. His appointment andremuneration payable has been

approved by the members and theCentral Government vide its letter

dated 18th June, 2007. TheRemuneration Committee, subject

to the approval of the Members andthe Central Government has

approved the increase inremuneration of Mr. Jean-Marc

Delpon de Vaux. Accordinglyresolution for increase in

remuneration of Mr. Jean-MarcDelpon de Vaux as Managing

Director is placed before you foryour approval. The information as

required under Schedule XIII Part II,Section II 1 (C) is given below:

I. General Information:I. General Information:I. General Information:I. General Information:I. General Information:

1. Nature of Industry

2. Date or expected date ofcommencement of commercial

production

3. In case of new companies,

expected date ofcommencement of activities

as per project approved byfinancial institutions appearing

in the prospectus.

4. Financial performance based on

given indicators

Turnover

Profit before tax

5. Export performance and netforeign exchange collaborations

6. Foreign investments or

collaborators, if any

The Company is engaged inmanufacture and sale of Beer

The Company is an existing Company

N.A.

31-3-09 31-3-10 31-3-11

Rs.Crores

2732 3127 3700

(41) 20 29

31-3-06 31-3-07 31-3-08

Rs.Crores

0.06 Nil 7

Nil


Notice

II. Information about the appointee:II. Information about the appointee:II. Information about the appointee:II. Information about the appointee:II. Information about the appointee:

2. Past remuneration

3. Recognition or awards

4. Job profile and his suitability

5. Remuneration proposed

6. Comparative remuneration

profile with respect to industrysize of the Company, profile of

the position and person (incase of expatriates the

relevant details would be w.r.t.the country of his origin)

7. Pecuniary relationship directly

or indirectly with the Company,or relationship with the

managerial personnel, if any.

1. Background details

Mr. Jean-Marc Delpon de Vaux worked for Unilever for 25 years where he heldnumerous senior marketing and general management positions, including

Chairman and CEO of the Maghreb region.

2006-07 2007-08

Rs.1,49,74,236 2,24,34,669

NA

With the vast and rich experienceMr. Jean-Marc Delpon de Vaux is a

suitable candidate to look after the entireIndian beer operations. Under his tenure

as Managing Director the Turnover of theCompany has increased by 28%.

As set out in the resolution

Mr. Jean-Marc Delpon de Vaux represents

SABMiller which is among the leadingbreweries of the world and his

compensation is determined inaccordance with the prevalent system in

the SABMiller Group and in keeping withpersons of his qualification, experience.

No pecuniary relationship

Directly or Indirectly with the Company orany managerial personnel

III. Other information:III. Other information:III. Other information:III. Other information:III. Other information:

1. Reasons of loss orinadequate profits

2. Steps taken or proposed to

be taken for improvement

3. Expected increase inproductivity and profits in

measurable terms.

Turnover

Profit before tax

The cost of Malt and fuel the main rawmaterial has gone up during the year by

more than 100%. Higher Depreciationand interest costs

The Company has started building long

term collaborative relationships withfarming communities through

programmes such as Saanjhi Unnati. Tobring down the interest cost equity

infusion is being considered.

31-3-09 31-3-10 31-3-11

Rs.Crores

2732 3127 3700

(41) 20 29

IVIVIVIVIV..... Disclosures:Disclosures:Disclosures:Disclosures:Disclosures:

As the Company is not a listedcompany, disclosure on Corporate

Governance is not mandatory andhence not given.

None of the Directors are interestedin the said resolution except

Mr. Jean-Marc Delpon de Vauxto the extent of remuneration

proposed.

7. At the Annual General Meeting of

the Company held on 29thNovember 2005, the Members

empowered the Board of Directorsunder Section 293(1)(d) of the

Companies Act, 1956 to borrowmonies for the business purposes

of the Company up to a limit ofRs.1000 Crores. Keeping in view

the Company’s businessrequirements and its investment and

growth plans, it is considereddesirable to increase the said

borrowing limits to Rs.1500 Croresas outlined in the resolution.

In terms of the provisions of Section293 (1) (d) of the Companies Act,

1956, approval of the members isbeing accordingly sought through

resolution under item no.7 for suchincrease in limits.

8. The Company requires to becapitalized to enable it to pay down

some of its debts and for othercorporate purposes. The Company

proposes to issue and allot, onpreferential basis 50000000 equity

shares of face value Rs. 10/- eachto SABMiller Asia B.V. at a premium

of Rs. 46/- per share.

This will require the Company to

raise its Authorized Share Capital.The Special Resolution set out at

item no. 8 in the notice is intendedto obtain such approval and the

Board recommends the resolutionfor your approval.

None of the Directors of the

Company are deemed to beinterested in the said resolution. The

Board recommends the adoption ofthe resolution.

9. As stated above, the Companyproposes to issue and allot, on a

preferential basis 50000000 equityshares of face value Rs. 10/- each

to SABMiller Asia B.V. at a premiumof Rs. 46/- per share (based on the

valuation report) which requires

8

9

Notice

shareholders’ approval undersection 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 whichallotment is proposed: The Equity

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

Share.

b. The relevant date on the basis ofwhich price has been arrived at: 31st

March, 2008

c. The objects of the issue throughpreferential offer: To issue Equity

Shares of the Company toSABMiller Asia B.V. for cash and to

utilize the money received hereunderfor the purpose of paying down

some of its debts and for othercorporate purposes.

d. The class or classes of persons towhom the allotment is proposed tobe made: The allotment will be madeto SABMiller Asia B.V.

e. Intention of promoters/directors/keymanagement persons to subscribeto the offer: SABMiller Asia B.V. has

signified its intention of subscribingto the issue.

f. Shareholding pattern of promotersand others classes of shares beforeand after the offer: The shareholding

pattern of the Company before andafter the issue is set out below

g. Proposed time within which theallotment shall be completed: withinone year from the date of the AGM

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

no change in control of theCompany after the preferential issue.

None of the Directors of theCompany are deemed to be

interested in the said resolution.

The Board recommends theadoption of the resolution

BY ORDER OF THE BOARD

Pramod S M

Company Secretary

Date : 23rd June, 2008

Place : Bangalore

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

No of Shares % No of Shares %

AAAAA PrPrPrPrPromoteromoteromoteromoteromoter’’’’’s holdings holdings holdings holdings holding 229384473 99.22 279384473 99.38

Sub totalSub totalSub totalSub totalSub total 229384473229384473229384473229384473229384473 99.2299.2299.2299.2299.22 279384473279384473279384473279384473279384473 99.3899.3899.3899.3899.38

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

Institutional InvestorsInstitutional InvestorsInstitutional InvestorsInstitutional InvestorsInstitutional Investors

a Mutual Funds and UTI 2240 0.00 2240 0.00

b Banks, Insurance co, FI 4008 0.00 4008 0.00

c FII - - - -


OthersOthersOthersOthersOthers

a Private Corporate Bodies 73168 0.03 73168 0.02

b Indian public 1616291 0.70 1616291 0.57

c NRI 103565 0.04 103565 0.02

d Any other - - - -


TTTTTotalotalotalotalotal 231183745231183745231183745231183745231183745 100.00100.00100.00100.00100.00 281130254281130254281130254281130254281130254 100.00100.00100.00100.00100.00


11

Directors’ Report

Dear Members,

Your Directors have pleasure in submitting their report and the Statement of

accounts for the year ended 31st March 2008.

FINANCIAL RESULFINANCIAL RESULFINANCIAL RESULFINANCIAL RESULFINANCIAL RESULTSTSTSTSTS

Financial Year Financial Year2007-2008 2006-2007

Gross Revenue 1741.69 1348.54

Profit before taxation 40.85 45.33

Less: Provision for taxation 6.37 5.13

Profit after taxation 34.48 40.19

Surplus/(deficit) brought forward from previous year 129.69 169.89

Balance carried to Balance Sheet 95.21 129.69

(Rupees in Crores)

OPERAOPERAOPERAOPERAOPERATIONSTIONSTIONSTIONSTIONS

The performance of your Company

during the year 2007-08 hasconsiderably improved. The turnover

increased by 28% over the previous yearto Rs.1741 Crores from Rs.1348

Crores. The net profit of the Company islower on account of deferred taxes.

The focus areas of your Company on theway forward are sustainability and long

term growth.

A sum of Rs.281 Crores has been

invested in upgrading existing plant andmachinery and in developing capacity.

Your Company is putting up a state-of-the-art one million hecto-litre capacity

brown field project in the State ofHaryana, which will be operational by the

end of this year. There has also beencontinuous upgradation and

implementation of best practices at allunits to increase productivity and bring

down the cost of production. New canlines have been put in place in Mysore

Breweries and Rochees Breweries andthis has enabled the Company to meet

the growing demand for cans.

Your Company has been requesting for aprice increase from the Andhra Pradesh

Beverages Corporation Limited to partlyoffset the increase in the cost of raw

materials and other inputs. However,even after protracted requests and

negotiations your Company has beenunable to obtain such an increase and

this led to a stand off which resulted intemporary suspension of operations at

Charminar Breweries for 38 days duringthe peak season. The plant has since

been re-opened on the assurance fromthe Andhra Pradesh Beverages

Corporation Limited that they would look

into this issue and provide resolution.

During the previous year your Company

acquired the Foster’s brand and trademark in India for a consideration. An

application for an advance tax ruling hasbeen made by Foster’s Australia seeking

clarification on the taxability of thistransaction in India. The advance ruling

authorities have held that the transactionis taxable as the asset is situated in India.

Your Company is sufficiently covered byIndemnity for any liability that may arise

to your Company on account of any taxclaim on this account.

Your Board enjoys the unqualifiedsupport of all its financiers whose

confidence in the future of your Companyis evidenced by the fact that all

borrowings have been executed withoutthe bankers taking any charges over any

of your Company’s assets. As such theborrowings are short term and renewed

from year to year.

Your Board considers that bottles used

to deliver the Company’s products to themarket are in substance returnable

containers and that this economic realityshould be reflected in the way the

Company accounts for its containers. Forthis reason bottles are accounted for on

a returnable basis, in accordance withprevious years and Indian accounting

practices.

DIVIDENDDIVIDENDDIVIDENDDIVIDENDDIVIDEND

In order to conserve cash for expansionand modernisation the Directors do not

recommend any dividend on the equitycapital.


VVVVVALUESALUESALUESALUESALUES

The five core values of the Company areas follows:

1.1.1.1.1. Our people are our enduringOur people are our enduringOur people are our enduringOur people are our enduringOur people are our enduring

advantage:advantage:advantage:advantage:advantage:

This value has been at the core ofthe Companies approach towards

its employees.

The Indian growth story has all the

ingredients to drive the SKOLgrowth story. 28% of India lives in

urban areas and this is equivalent tothe size of the US population. The

rural population is taking on moreand more urban characteristics

everyday. Today the youth drivesIndia and will continue to do so in

the foreseeable future. Even in 2015,50% of the Indian population will be

under 30 years. According to asurvey on GDP Growth conducted

by Global Insight, Lead Indicators ofInflection are visible in India. This

presents a tremendous opportunityfor SKOL, especially in light of the

fact that per capita beerconsumption in India is only one litre

compared to the global average of22 litres. But this growth also means

a huge tussle for the right humanresources, both in terms of hiring

and retaining talent. This hasbecome a make or break factor for

many organizations. We at SKOLare using various tools like Market

Surveys, Exit Interview Analysis,Focus Group Discussions to get

insights into the Indian Talent Marketand Data from prospective hires and

have in place strategies to addressboth hard and soft issues.

2.2.2.2.2. Accountability is clear andAccountability is clear andAccountability is clear andAccountability is clear andAccountability is clear and

personalpersonalpersonalpersonalpersonal:

There are clear definedaccountability and goals laid down

for all Directors and employees. Thegoals are clear, quantifiable and

measurable. The performance ofevery employee is closely monitored

and measured in accordance withtheir goals and it is their

responsibility to accomplish them.On account of this value, there is a

desire in each and every employeeto achieve and exceed goals.

Your Company has introducedvarious positive measures to drive

growth through clear accountabilityby introducing STI method of

computation for determining the

quantum of ex-gratia payment madeat the end of the year in accordance

with its Performance ManagementSystem. Moreover, the achievement

of these goals consistently creates agrowth path for executives in your

organization.

3.3.3.3.3. We work and win in teams:We work and win in teams:We work and win in teams:We work and win in teams:We work and win in teams:

This is not a corollary to the abovevalue, but in fact a supporting value

which highlights the importance of‘handshake zones’ where

employees need to combine to helpothers to achieve goals.

The overlapping areas are clearlyidentified to ensure there are no

conflicts between goals of teammembers and overall objectives

of the Company.

4.4.4.4.4. We understand and respect ourWe understand and respect ourWe understand and respect ourWe understand and respect ourWe understand and respect our

customers and consumerscustomers and consumerscustomers and consumerscustomers and consumerscustomers and consumers:

Your Company adopts best

practices in dealing with consumersand customers. A dedicated

Customer Complaint Cell has beenset up and all communications are

monitored and relevant action isinitiated. The Company has

developed software to bring focusinto feedback from customers with a

view to betterment of productquality and service. This focus on

the customer is intended to be usedas a major differentiator and a

competitive advantage for theCompany. Moreover, your Company

believes in conducting extensivemarket research both for monitoring

existing products as well as forintroduction of new products in the

market with a view to satisfying theneeds of the customers and

consumers.

Your Company has introduced new

products to meet the customers’aspirational values by launching

Haywards Black and Peroni.

5.5.5.5.5. Our reputation is indivisible:Our reputation is indivisible:Our reputation is indivisible:Our reputation is indivisible:Our reputation is indivisible:

Towards the end the Company not

only internally but also externallyfocuses on large number of areas of

Corporate Social Responsibilityfor betterment of the work force as

well as communities that weinteract with some of the examples

are as follows:

12

13

CORPORACORPORACORPORACORPORACORPORATE SOCIALTE SOCIALTE SOCIALTE SOCIALTE SOCIAL

RESPONSIBILITYRESPONSIBILITYRESPONSIBILITYRESPONSIBILITYRESPONSIBILITY

SKOL has been focusing on the following

areas of Corporate Social Responsibilityfor the betterment of its work force as

well as the communities in which itoperates.....

Your Company recognises that HIV/AIDSis a major threat to the world of work

where it affects the most productivesegment of the labor force and imposes

huge costs on enterprises throughdeclining productivity and loss of skills

and experience.

In order to curb the menace of HIV/AIDS

the need of the hour is to have aproactive approach. Your Company

acknowledges the seriousness of theissue and the future impact this may have

on the broader communities, if leftunchecked.

Your Company has signed a MOU withInternational Labour Organisation (ILO)

for its work place programme in India.The aim of this partnership is to help

prevent the transmission of HIV amongworkers and to mitigate the impact of the

epidemic on work place productivity.

Your Company has donated Medical Van

in Orissa to NGO Sadhana to providehealth care facilities to rural communities

of Orissa. The van would work like amobile doctor going around villages to

conduct routine check ups and provideon time primary health services.

Your Company also conducted variousother activities such as blood donation

camps, health camps, polio drives etcacross its units.

Saanjhi UnnatiSaanjhi UnnatiSaanjhi UnnatiSaanjhi UnnatiSaanjhi Unnati

The beer industry is expected to continuegrowing rapidly as the Indian economy

grows. Malted food industry is alsogrowing rapidly. Barley is the key

ingredient for both. Traditionally barleyhas been grown in India by small and

marginal farmers on rain-fed land.The acreage, yield and production had

been shrinking over the years and thequality was poor.

Considering our future demand for highquality malting grade barley, we designed

and implemented an initiative in 2005called “Saanjhi Unnati” “Saanjhi Unnati” “Saanjhi Unnati” “Saanjhi Unnati” “Saanjhi Unnati” (Progress

through Partnership) in Rajasthan.The programme is aimed at not only to

improve quality, enhance productivity,

increase acreage and channelize barleyfor our malting use, but also to work

towards the welfare of the farmersthrough social programs.

The project adds value at all stages ofthe value chain with eventual benefits to

trickle to the farmer. The farmers getcertified quality seeds and other

agricultural inputs from the SU centersbesides the free but valuable agronomical

advice from our experts. They have anassured market, transparent dealings, fair

pricing, incur no hidden costs and getspot payment which they do not receive

when they market their produce totraditional channels.

The program has gained significantmomentum, from a beginning at about

4000 acres during 2005-06; theprogram is extended to about 13,000

acres during 2007-08 and a memberfarmer base of 6020 across 4 districts in

Rajasthan. During the year under reviewthe Company has procured 7000 tonnes

of Barely through this programme.

SWOT ANALSWOT ANALSWOT ANALSWOT ANALSWOT ANALYSIS OF THE COMPYSIS OF THE COMPYSIS OF THE COMPYSIS OF THE COMPYSIS OF THE COMPANYANYANYANYANY

Strengths:Strengths:Strengths:Strengths:Strengths:

u Access to SABMiller group’stechnology and brands

u Well established brands in themarket

u Well diversified brand portfoliocovering all segments of the market

u Nine plants spread across Indiacovering all major beer markets

u High quality products

u On-going product innovation toattract new consumers

u Ability to set up new plants atminimal cost and in record time.

u Strong management team

Weakness:Weakness:Weakness:Weakness:Weakness:

u Inability to raise prices of theproduct as mainly the price is fixed

by government

u Each state has its own excise laws,

whereby movement of goods fromone state to another is time

consuming and costly

http://www.sabmiller.in/about_sabmiller-India.html


Directors’ Report

u No plant in Tamil Nadu, therebyinability to participate in the second

biggest beer market in India

Opportunities:Opportunities:Opportunities:Opportunities:Opportunities:

u Per capita consumption of Beer isone litre, way below world average

u Growing per capita incomes raising

people’s aspirations can impact beersales positively

u India has the highest number ofyoung people who are the potential

consumers for the Company

u Easing of the regulatory environment

can lead to tremendous marketgrowth

Threats:Threats:Threats:Threats:Threats:

u Rising cost of raw materials

u Talent attraction and retention

u Increasingly competitiveenvironment with all major global

players entering the Indian market

u Heineken partnering UB gives it a

national reach for an aggressive rollout of the Brand

DIRECTORSDIRECTORSDIRECTORSDIRECTORSDIRECTORS

In accordance with the Articles of

Association, Mr. Jonathan Andrew Kirby,Director of the Company retires by

rotation at this meeting and beingeligible, offer himself for re-appointment.

During the year Mr. Ari Mervis wasappointed as an additional Director of the

Company, whose term of office expiresat this Annual General Meeting and is

eligible for re-appointment.

During the year Mr. T.S.R. Subramanian

was appointed as an additional Directorof the Company, whose term of office

expires at this Annual General Meetingand is eligible for re-appointment.

Mr. Andre Charles Parker, Chairman ofthe Board retired from the services of

SABMiller Group. The Board places onrecord its appreciation for the valuable

services rendered by Mr. Andre CharlesParker during his tenure as Chairman of

the Board. It is on account of his visionand foresight that the Beer business of

SABMiller group was set up andexpanded in India.

Mr.Jean-Marc Delpon de Vaux wasappointed as Managing Director

w.e.f. 1st August 2006 and the CentralGovernment has approved his

appointment and remuneration payableto the Managing Director vide its letter

dated 18.6.2007. His remuneration isbeing proposed to increase from

Rs.18,00,000/- to Rs. 25,00,000/-per month, subject to Members and

Central Government Approval.

Ms. Maya Makanjee has resigned as a

Director of the Company w.e.f. 23rd June2008. The Board places on record the

meritorious services rendered by Ms.Maya Makanjee during her tenure as

Director on the Board.

AUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEE

Pursuant to the provisions of Section

292A of the Companies Act, 1956 anAudit Committee has been constituted.

The present members of the Committeeare, Mr. Jonathan Andrew Kirby, Mr. Ari

Mervis & Mr. Richard (Pete) L Lloyd.Mr. Jonathan Andrew Kirby Chairman of

the Audit Committee was present at thelast Annual General Meeting.

AUDITORSAUDITORSAUDITORSAUDITORSAUDITORS

M/s BSR & Co., Chartered Accountants,

retiring Auditors, have signified theirwillingness to be reappointed as

Statutory Auditors of the Company. Theyhave confirmed that their reappointment

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

Act, 1956. Your Directors recommendtheir appointment at the ensuing Annual

General Meeting.

PUBLIC DEPOSITPUBLIC DEPOSITPUBLIC DEPOSITPUBLIC DEPOSITPUBLIC DEPOSIT

During the year, the Company has notaccepted any public deposits as defined

in the Companies (Acceptance ofDeposits) Rules, 1975.

PPPPPARARARARARTICULARS OF EMPLOYEESTICULARS OF EMPLOYEESTICULARS OF EMPLOYEESTICULARS OF EMPLOYEESTICULARS OF EMPLOYEES

The details of employees covered under

the provisions of Section 217 (2A) of theCompanies Act, 1956 and the rules

framed thereunder, as amended to dateis attached herewith.

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

TECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTION

The statement pursuant to Section 217

(1) (e) of the Companies Act, 1956 readwith the Companies (Disclosure of

Particulars in the Report of Board ofDirectors) Rules, 1988 to the extent

applicable are set in the annexure hereto.

DIRECTORS’ RESPONSIBILITYDIRECTORS’ RESPONSIBILITYDIRECTORS’ RESPONSIBILITYDIRECTORS’ RESPONSIBILITYDIRECTORS’ RESPONSIBILITY

STSTSTSTSTAAAAATEMENT U/S 217 (2AA) OF THETEMENT U/S 217 (2AA) OF THETEMENT U/S 217 (2AA) OF THETEMENT U/S 217 (2AA) OF THETEMENT U/S 217 (2AA) OF THE

COMPCOMPCOMPCOMPCOMPANIES ACTANIES ACTANIES ACTANIES ACTANIES ACT, 1956, 1956, 1956, 1956, 1956

Your Directors state that:

1. The financial statements have beenprepared in conformity with the

generally accepted accountingprinciples and applicable accounting

standards in India.

2. The Directors have selected such

accounting policies as are applicableand have applied them consistently

and made reasonable and prudentjudgment and estimates so as to

give a true and fair view of the stateof affairs of the Company at the end

of the financial year and of the profitfor the year.

3. The Directors have taken proper andsufficient care for the maintenance of

adequate accounting records inaccordance with the provisions of

the Companies Act for safeguardingthe assets of the Company and for

preventing and detecting fraud andother irregularities.

4. The financial statements have beenprepared on the basis of “Going

Concern” considering the ability ofthe Company to carry on its

business in the foreseeable future.

ACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENT

Your Directors wish to place on recordtheir appreciation to employees at all

levels for their co-operation. TheDirectors would also like to acknowledge

the continued support of the Company’sBankers, Distributors, Shareholders,

Customers and Suppliers.

FOR AND ON BEHALF OF THE BOARD

Jonathan Andrew KirbyDirector

Jean-Marc Delpon de VauxManaging Director

Place: BangaloreDated: June 23, 2008

14

15

Directors’ Report

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

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

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

The output performance for boiler fuel consumption and electricity of theCompany is as under:

18

16

14

12

10

8

6

4

2

0

Boiler energy consumption MJ/HL Boiler energy consumption MJ/HL Boiler energy consumption MJ/HL Boiler energy consumption MJ/HL Boiler energy consumption MJ/HL Electricity consumption in kWh/HLElectricity consumption in kWh/HLElectricity consumption in kWh/HLElectricity consumption in kWh/HLElectricity consumption in kWh/HL

F’05 F’06 F’07 F’08

The measures taken by the Company atits various units are as under-

1. Extensive benchmarking includinginternational and target setting.

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

3. Fuel switch from fossil fuel tobiomass in selected breweries to

reduce the carbon footprint.

4. Focussed initiatives on Waterconservation and recycling in

breweries.

5. Use of treated effluent for gardening

of the factory campus by drainsystem. Use of UF & RO technology

to recycle treated effluent water atstrategic sites.

6. Identification of refrigeration as amajor energy user and preparation

of a health check to minimize powerconsumption in the coming years.

7. New capacity with new technologyand economy of scale.

8. Rationalizing the Brewing operationsin line with packing production plan

(especially during the low volumeand non season periods)

B.B.B.B.B. TECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTION

a)a)a)a)a) Research & DevelopmentResearch & DevelopmentResearch & DevelopmentResearch & DevelopmentResearch & Development

Shared learning transferred from

global company community. Closeco-operation with supply chain

partners to improve quality andreduce waste.

Efforts in brief made towards

technology absorption, adaptationand innovation.

Benefits derived as a result of the

above efforts are productimprovement, cost reduction,

product development, importsubstitution.

In case of imported technology(imported during the last 5 years

reckoned from the beginning of thefinancial year)

It has always been our endeavour to

adopt the latest developments in BrewingTechnology in order to minimize our

environmental impact. Trying various newtypes of brewing aids to improve our

quality is an ongoing and continuousprocess.

The Company strives for continuous

improvement in quality, cost andavailability.

Keg cleaning and filling technology. Flashpasteurization technology. Special bottle

filling and labelling technology. Brewhousetechnologies.

Jean-Marc Delpon de Vaux

Managing DirectorJonathan Andrew Kirby

Director

Place: BangaloreDated: June 23, 2008

C.C.C.C.C. FOREIGN EXCHANGE EARNINGSFOREIGN EXCHANGE EARNINGSFOREIGN EXCHANGE EARNINGSFOREIGN EXCHANGE EARNINGSFOREIGN EXCHANGE EARNINGS

AND OUTGOAND OUTGOAND OUTGOAND OUTGOAND OUTGO

During the year, the Company hasearned Rs.7 Crores in foreign

exchange earnings. An amount ofRs.47.4 Crores was incurred in

foreign exchange.

FOR AND ON BEHALF OF THE BOARD

b)b)b)b)b) TTTTTechnology absorption,echnology absorption,echnology absorption,echnology absorption,echnology absorption,

adaptation and innovationadaptation and innovationadaptation and innovationadaptation and innovationadaptation and innovation

250

200

150

100

50

0F’05 F’06 F’07 F’08


17

Auditors’ Report

TTTTTo the Members of SKOL Bro the Members of SKOL Bro the Members of SKOL Bro the Members of SKOL Bro the Members of SKOL Breweriesewerieseweriesewerieseweries

LimitedLimitedLimitedLimitedLimited

We have audited the attached balance

sheet of SKOL Breweries Limited(“the Company”) as at 31 March 2008,

the profit and loss account and the cashflow statement for the year ended on that

date annexed thereto. These financialstatements are the responsibility of the

Company’s management.Our responsibility is to express an

opinion on these financial statementsbased on our audit.

We conducted our audit in accordancewith auditing standards generally

accepted in India. Those standardsrequire that we plan and perform the

audit to obtain reasonable assuranceabout whether the financial statements

are free of material misstatement. Anaudit includes examining, on a test basis,

evidence supporting the amounts anddisclosures in the financial statements.

An audit also includes assessing theaccounting principles used and significant

estimates made by management, as wellas evaluating the overall financial

statement presentation. We believe thatour audit provides a reasonable basis for

our opinion.

As required by the Companies (Auditor’s

Report) Order, 2003 (“the Order”),as amended, issued by the Central

Government of India in terms ofsub-section (4A) of Section 227 of the

Companies Act, 1956, we enclose inthe Annexure a statement on the

matters specified in paragraphs 4 and 5of the Order.

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

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

of our knowledge and belief werenecessary for the purpose of our

audit;

(ii) in our opinion, proper books of

account as required by law havebeen kept by the Company so far as

appears from our examination ofthose books;

(iii) the balance sheet, the profit and

loss account and the cash flowstatement dealt with by this report

are in agreement with the books ofaccount;

(iv) in our opinion, the balance sheet, the

profit and loss account and the cashflow statement dealt with by this

report comply with the accountingstandards referred to in sub-section

(3C) of Section 211 of theCompanies Act, 1956;

(v) on the basis of writtenrepresentations received from the

directors of the Company as on31 March 2008, and taken on

record by the Board of Directors,we report that none of the directors

is disqualified as on 31 March 2008from being appointed as a director

in terms of clause (g) of sub-section(1) of Section 274 of the Companies

Act, 1956; and

(vi) in our opinion and to the best of our

information and according to theexplanations given to us, the said

accounts give the informationrequired by the Companies Act,

1956, in the manner so required andgive a true and fair view in

conformity with the accountingprinciples generally accepted in

India:

a. in the case of the balance sheet,

of the state of affairs of theCompany as at 31 March 2008;

b. in the case of the profit and lossaccount, of the profit of the

Company for the year ended onthat date; and

c. in the case of the cash flowstatement, of the cash flows for

the year ended on that date.

for BSR & Co.BSR & Co.BSR & Co.BSR & Co.BSR & Co.


Zubin ShekaryZubin ShekaryZubin ShekaryZubin ShekaryZubin Shekary

Partner

Membership No. 48814

Bangalore23 June 2008


Annexure to the Auditors’ report

Annexure referred to in the Auditors’

Report to the Members of SKOLBreweries Limited (“the Company”) for

the year ended 31 March 2008. Wereport that:

i. (a) The Company has maintainedproper records showing full

particulars, including quantitativedetails and situation of fixed

assets, except for returnablecontainers where the nature of thetrade does not permit itemisedrecording of the location ofreturnable containers at anyparticular point of time.

(b) The Company has a regularprogramme of physical

verification of its fixed assets bywhich all fixed assets are verified

over a period of three years,except for returnable containerswhere the nature of the tradedoes not permit physicalverification. In our opinion, thisperiodicity of physical verification

is reasonable having regard to thesize of the Company and the

nature of its assets. No materialdiscrepancies were noticed on

such verification.

(c) Fixed assets disposed during the

year were not substantial, andtherefore, do not affect the going

concern assumption.

ii. (a) The inventory, except for goods-in-transit and stock lying with

third parties, has been physicallyverified by the management

during the year. In our opinion,the frequency of such verification

is reasonable. For stocks lyingwith third parties at the year-end,

written confirmations have beenobtained.

(b) The procedures for the physicalverification of inventories followed

by the management arereasonable and adequate in

relation to the size of theCompany and the nature of its

business.

(c) The Company is maintaining

proper records of inventory.The discrepancies noticed on

verification between the physicalstocks and the book records

were not material.

iii. (a) The Company has not

granted any loans, secured or

unsecured, to companies, firms orother parties covered in the

register maintained under Section301 of the Companies Act, 1956.

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

Order is not applicable.

(e) The Company has taken a loan

from a Company covered in theregister maintained under Section

301 of the Companies Act, 1956.The maximum amount

outstanding during the year andthe year-end balance of such

loans was Rs 483,141,746 andRs 385,269,911 respectively.

(f) In our opinion, the rate of interest

for the above loan taken fromcompanies, firms or other parties

listed in the register maintainedunder section 301 of the

Companies Act, 1956 are not,prima facie, prejudicial to the

interest of the Company. Tenureand repayment terms have not

been specified for such loans.

(g) According to the information and

explanations given to us, thetenure and repayment terms have

not been specified for the abovementioned loan. Consequently, we

are unable to comment onparagraph 4(iii)(g) of the Order.

iv. In our opinion and according tothe information and explanations

given to us, there is an adequateinternal control system

commensurate with the size ofthe Company and the nature of its

business with regard to purchaseof inventories and fixed assets

and with regard to the sale ofgoods and services. We have not

observed any major weakness inthe internal control system during

the course of the audit.

v. In our opinion and according to

the information and explanationsgiven to us, the particulars of

contracts or arrangementsreferred to in Section 301 of the

Companies Act, 1956 have beenentered in the register required to

be maintained under that Section.

vi. In our opinion, and according to

the information and explanationsgiven to us, the Company has

complied with the provisions ofSection 58A, Section 58AA or

other relevant provisions of the

Companies Act, 1956 and therules framed thereunder/ the

directives issued by the ReserveBank of India (as applicable) with

regard to deposits accepted fromthe public. Accordingly, there

have been no proceedings beforethe Company Law Board or

National Company Law Tribunal(as applicable) or Reserve Bank of

India or any Court or any otherTribunal in this matter and no

order has been passed by any ofthe aforesaid authorities.

vii. In our opinion, the Company hasan internal audit system

commensurate with its size andnature of its business.

viii. The Central Government has notprescribed the maintenance of

cost records under Section209(1)(d) of the Companies Act,

1956 for any of the productsmanufactured and services

rendered by the Company.

ix. (a) According to the information and

explanations given to us and onthe basis of our examination of

the records of the Company,amounts deducted/ accrued in

the books of account in respectof undisputed statutory dues

including Provident Fund,Employees’ State Insurance,

Income-tax, Sales Tax, WealthTax, Service Tax, Customs Duty,

Excise Duty, Cess, InvestorEducation and Protection Fund

and other material statutory dues,have been regularly deposited

during the year by the Companywith the appropriate authorities

though there has been a slightdelay in a few cases.

18

19

Further, since the CentralGovernment has till date not

prescribed the amount of cesspayable under Section 441A of

the Companies Act, 1956, we arenot in a position to comment

upon the regularity or otherwiseof the Company in depositing the

same.

According to the information and

explanations given to us, noundisputed 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 othermaterial statutory dues were in

arrears as at 31 March 2008 for aperiod of more than six months from

the date they became payable. Inrespect of sales tax, the Company is

in process of collecting StatutoryForms. Management has represented

that the same would be submitted tothe authorities at the time of the

assessment. Hence payment ofdifferential sales tax has not been

made on the Statutory Forms whichare pending to be collected for the

periods for which assessments havenot been completed.

(b) According to the information and

explanations given to us, the followingdues of Income-tax, Sales Tax and

Excise Duty have not been depositedby the Company on account of

disputes. There are no dues of WealthTax, Service Tax, Customs Duty and

Cess, which have not been depositedwith the appropriate authorities on

account of any dispute.

Period to which the amount relatesPeriod to which the amount relatesPeriod to which the amount relatesPeriod to which the amount relatesPeriod to which the amount relates Amount (Rs million)Amount (Rs million)Amount (Rs million)Amount (Rs million)Amount (Rs million) Forum where dispute is pendingForum where dispute is pendingForum where dispute is pendingForum where dispute is pendingForum where dispute is pending

Excise Duty under State Excise ActsExcise Duty under State Excise ActsExcise Duty under State Excise ActsExcise Duty under State Excise ActsExcise Duty under State Excise Acts

2001 – 02 to 2004 – 05 10.88 Orissa High Court

1974 – 75 to 1990 – 91 13.75 Financial Commissioner, Haryana

2000 – 01 1.04 Commissioner of State Excise, Maharashtra

1997 – 98 to 1999 – 00 0.33 Karnataka High Court

1998 – 99 to 2004 – 05 6.68 Karnataka High Court

1983 – 84 to 1988 – 89 0.55 Bombay High Court

2005 – 06 2.15 Orissa High Court

1996 – 97 to 1999 – 00 70.24 Customs Excise Service Tax Appellate Tribunal,Mumbai

1989 3.22 Orissa High Court

Sales TSales TSales TSales TSales Tax under State Sales Tax under State Sales Tax under State Sales Tax under State Sales Tax under State Sales Tax Actsax Actsax Actsax Actsax Acts

1994 – 95 to 2000-01 92.73 Appellate Tribunal, Orissa

1989 – 90 to 1996 – 97 and 1998 – 99 to 2003 – 04 5.97 Appellate Tribunal, Haryana

2002 – 03 to 2003 – 04 1.26 Assistant Commissioner of CommercialTaxes (Appeals), New Delhi

1995 – 96 4.14 Appellate Tribunal, Maharashtra


1991 – 92 to 1992 – 1993 3.68 Andhra Pradesh High Court

2003 – 04 0.19 Appellate Tribunal, Uttar Pradesh



1981 – 82 to 1984 – 85 and 1997 – 98 to 1998 – 99 11.98 Assessing Authority, Pondicherry

2000 – 01 to 2003-04 6.18 Chandigarh High Court

2003 – 04 to 2005 – 06 7.47 Supreme Court

2002 – 03 5.43 Appellate Tribunal, Uttar Pradesh

2003 – 04 4.03 Commissioner of Appeals, Uttar Pradesh

2004 – 05 68.73 Deputy Commissioner, Meerut

2003 – 07 0.38 Deputy Commissioner, Meerut

2006 – 07 0.05 Joint Commissioner, Meerut

2004 – 05 0.14 Additional Commissioner Sales Tax, New Delhi

2002 – 03 8.05 Deputy Commissioner, Mumbai

Income-tax under Income-tax Act, 1961Income-tax under Income-tax Act, 1961Income-tax under Income-tax Act, 1961Income-tax under Income-tax Act, 1961Income-tax under Income-tax Act, 1961

AY 2003 – 04 32.73 Appellate Tribunal, Mumbai

AY 1996 – 97 0.15 Appellate Tribunal, Mumbai


Annexure to the Auditors’ report

x. The Company has accumulated

losses of Rs 952,184,208 at theend of the financial year. The

Company has not incurred cashlosses in the financial year and in the

immediately preceding financial year.

xi. In our opinion and according to the

information and explanations givento us, the Company has not

defaulted in repayment of dues to itsbankers. The Company did not have

any outstanding dues to anyfinancial institutions or

debentureholders during the year.

xii. In our opinion the Company has

maintained adequate records incases where it has granted loans

and advances on the basis ofsecurity by way of pledge of shares.

The Company has not granted anyloans and advances on the basis of

security by way of pledge ofdebentures and other securities.

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

to us, the Company is not a chitfund or a nidhi/ mutual benefit fund/

society.

xiv. According to the information and

explanations given to us, theCompany is not dealing or trading in

shares, securities, debentures andother investments.

xv. According to the information andexplanations given to us, the

Company has not given anyguarantee for loans taken by others

from banks or financial institutions.

xvi. In our opinion and according to the

information and explanations givento us, the term loans taken by the

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

xvii. According to the information and

explanations given to us and on anoverall examination of the balance

sheet of the Company, we are of the

opinion that funds raised on short-term basis amounting toRs. 2,652,096,907 have been usedfor long-term investment in fixedassets and investments.

xviii. The Company has not made anypreferential allotment of shares to

companies/ firms/ parties covered inthe register maintained under

Section 301 of the Companies Act,1956.

xix. The Company did not have anyoutstanding debentures during the

year.

xx. The Company has not raised any

money by public issues during theyear.

xxi. According to the information andexplanations given to us, no fraud on

or by the Company has beennoticed or reported during the

course of the audit.

for BSR & Co.BSR & Co.BSR & Co.BSR & Co.BSR & Co.


Zubin ShekaryZubin ShekaryZubin ShekaryZubin ShekaryZubin Shekary

Partner

Membership No. 48814


20

21

(Rs.)

As atAs atAs atAs atAs at As at

Schedule 31 March 2008 31 March 2008 31 March 2008 31 March 2008 31 March 2008 31 March 2007

SOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDS

Shareholders’ fundsShareholders’ fundsShareholders’ fundsShareholders’ fundsShareholders’ funds

Share capital 2 2,311,837,450 1,979,158,880

Reserves and surplus 3 6,406,852,856 4,610,316,326

8,718,690,306 6,589,475,206

Share application money pending allotment of shares - 1,863,000,000

Loan fundsLoan fundsLoan fundsLoan fundsLoan funds

Unsecured loans 4 3,774,422,006 4,652,648,467

Deferred tax liability, net 18 (10) 63,744,036 -

12,556,856,34812,556,856,34812,556,856,34812,556,856,34812,556,856,348 13,105,123,67313,105,123,67313,105,123,67313,105,123,67313,105,123,673

APPLICAAPPLICAAPPLICAAPPLICAAPPLICATION OF FUNDSTION OF FUNDSTION OF FUNDSTION OF FUNDSTION OF FUNDS

Fixed assetsFixed assetsFixed assetsFixed assetsFixed assets 5

Gross block 10,973,596,079 8,795,466,503

Less: Accumulated depreciation (2,074,943,657) (1,525,150,636)

Less: Provision for impairment of fixed assets (156,563,671) (52,523,898)

Net block 8,742,088,751 7,217,791,969

Capital work-in-progress 1,491,630,978 756,309,965

10,233,719,729 7,974,101,934

InvestmentsInvestmentsInvestmentsInvestmentsInvestments 6 11,359,225 2,178,050

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

Inventories 7 1,183,482,865 774,519,494

Sundry debtors 8 2,536,219,383 1,484,582,230

Cash and bank balances 9 311,251,107 4,047,462,855

Loans and advances 10 1,242,942,582 1,114,045,283

5,273,895,937 7,420,609,862

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

Current liabilities 11 4,058,160,935 3,387,142,064

Provisions 12 361,193,684 426,751,996

4,419,354,619 3,813,894,060

Net current assets 854,541,318 3,606,715,802

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

Debit balance in profit and loss accountDebit balance in profit and loss accountDebit balance in profit and loss accountDebit balance in profit and loss accountDebit balance in profit and loss account - 1,296,961,395

Less: Balance in general reserve account 3 - (1,232,069,584)

- 64,891,811

12,556,856,34812,556,856,34812,556,856,34812,556,856,34812,556,856,348 13,105,123,67313,105,123,67313,105,123,67313,105,123,67313,105,123,673

SSSSSignificant accounting policiesignificant accounting policiesignificant accounting policiesignificant accounting policiesignificant accounting policies 1

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

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

for BSR & Co.BSR & Co.BSR & Co.BSR & Co.BSR & Co. for SKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedChartered Accountants

Zubin Shekary Jean-Marc Delpon de Vaux Jonathan Andrew KirbyPartner Managing Director DirectorMembership No. 48814

Kevin Heydenrych Pramod S MChief Finance Officer Company Secretary

Bangalore Bangalore23 June 2008 23 June 2008

Balance sheet as at 31 March 2008


(Rs.)

Schedule For the year endedFor the year endedFor the year endedFor the year endedFor the year ended For the year ended

31 March 200831 March 200831 March 200831 March 200831 March 2008 31 March 2007

IncomeIncomeIncomeIncomeIncome

Sale of manufactured goods, gross 17,120,144,115 13,384,952,487

Sale of traded goods, gross 296,758,472 100,449,130

17,416,902,587 13,485,401,617

Less: Excise duty (6,307,912,578) (4,840,701,234)

Less: Discounts (743,348,972) (612,303,595)

Sales, net 10,365,641,037 10,365,641,037 10,365,641,037 10,365,641,037 10,365,641,037 8,032,396,7888,032,396,7888,032,396,7888,032,396,7888,032,396,788

Income from marketing operations 219,335,661 227,208,154

Other income 13 281,767,214 179,188,724

10,866,743,91210,866,743,91210,866,743,91210,866,743,91210,866,743,912 8,438,793,6668,438,793,6668,438,793,6668,438,793,6668,438,793,666

ExpenditureExpenditureExpenditureExpenditureExpenditure

Material cost of sales 14 3,059,852,296 2,197,111,990

Personnel costs 15 804,928,296 603,282,581

Other expenses 16 5,469,854,808 4,348,072,365

Depreciation 5 858,090,043 625,247,195

Provision for impairment of fixed assets 18 (14) 117,306,243 (101,662,427)

Interest 17 148,166,541 313,366,314

10,458,198,22710,458,198,22710,458,198,22710,458,198,22710,458,198,227 7,985,418,018 7,985,418,018 7,985,418,018 7,985,418,018 7,985,418,018

Profit before taxProfit before taxProfit before taxProfit before taxProfit before tax 408,545,685408,545,685408,545,685408,545,685408,545,685 453,375,648453,375,648453,375,648453,375,648453,375,648

Provision for tax

- current tax - 37,573,724

- pertaining to earlier years (37,573,724) -

- wealth tax 238,542 151,668

- fringe benefit tax 30,320,522 13,758,454

- deferred tax 18 (10) 70,783,158 -

Profit after taxProfit after taxProfit after taxProfit after taxProfit after tax 344,777,187344,777,187344,777,187344,777,187344,777,187 401,891,802401,891,802401,891,802401,891,802401,891,802

Debit balance in profit and loss account brought forward (1,296,961,395) (1,698,853,197)

Debit balance in profit and loss account carried overDebit balance in profit and loss account carried overDebit balance in profit and loss account carried overDebit balance in profit and loss account carried overDebit balance in profit and loss account carried over (952,184,208)(952,184,208)(952,184,208)(952,184,208)(952,184,208) (1,296,961,395)(1,296,961,395)(1,296,961,395)(1,296,961,395)(1,296,961,395)

to the balance sheetto the balance sheetto the balance sheetto the balance sheetto the balance sheet

Earnings per share (par value: Rs. 10 each)Earnings per share (par value: Rs. 10 each)Earnings per share (par value: Rs. 10 each)Earnings per share (par value: Rs. 10 each)Earnings per share (par value: Rs. 10 each) 18 (3)

- Basic earnings per share 1.52 2.14

- Diluted earnings per share 1.49 2.13

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

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

The schedules referred to above form an integral part of the profit and loss account.

As per our report attached

for BSR & Co.BSR & Co.BSR & Co.BSR & Co.BSR & Co. for SKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries Limited


Zubin Shekary Jean-Marc Delpon de Vaux Jonathan Andrew Kirby

Partner Managing Director DirectorMembership No. 48814

Kevin Heydenrych Pramod S M

Chief Finance Officer Company Secretary

Bangalore Bangalore

23 June 2008 23 June 2008

Profit and loss account for the year ended 31 March 2008

22

23

1.1.1.1.1. Significant accounting policiesSignificant accounting policiesSignificant accounting policiesSignificant accounting policiesSignificant accounting policies

BackgroundBackgroundBackgroundBackgroundBackground

SKOL Breweries Limited (“the Company”or “SKOL”) was incorporated as a public

limited company under the CompaniesAct, 1956 on 18 November 1988. The

Company is primarily engaged in thebusiness of brewing, packaging,

distribution, marketing and sale of beer.

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

The financial statements have beenprepared and presented under the

historical cost convention on theaccrual basis of accounting. The

financial statements have beenprepared to comply in all material

respects with the mandatoryAccounting Standards (‘AS’)

prescribed by Companies(Accounting Standards) Rules, 2006

and the relevant provisions of theCompanies Act, 1956, to the extent

applicable. These financialstatements are prepared and

presented in Indian Rupees.

1.21.21.21.21.2 Going concernGoing concernGoing concernGoing concernGoing concern

These financial statements havebeen prepared on a going concern

basis, notwithstanding accumulatedlosses, due to the following

considerations:

- Expected steady future growthreflected in financial projections

prepared by the management;

- Expected continual technical and

financial support by theSABMiller group. In the current

year 33,267,857 equity sharesof Rs 10 each were allotted at a

premium of Rs 46 per share,resulting in increase in share

capital by Rs 1,863,999,992.

These financial statements,

therefore, do not include anyadjustments relating to

recoverability and classification ofasset amounts or to amounts and

classification of liabilities that may benecessary if the Company was

unable to continue as a goingconcern.

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

The preparation of financial

statements in conformity withgenerally accepted accounting

principles in India requires

management to make estimates and

assumptions that affect the reportedamounts of assets and liabilities and

the disclosure of contingent liabilitieson the date of the financial

statements and the results ofoperations during the reporting

period end. Actual results coulddiffer from those estimates. Any

revision to accounting estimates isrecognised prospectively in current

and future periods.

1.41.41.41.41.4 Revenue recognitionRevenue recognitionRevenue recognitionRevenue recognitionRevenue recognition

Revenue is recognised to the extentthat it is probable that the economic

benefits will flow to the Companyand the revenue can be measured

reliably.

(i) (i) (i) (i) (i) Sale of goodsSale of goodsSale of goodsSale of goodsSale of goods

Revenue from sale of goods isrecognised on transfer of all the

significant risks and rewards ofownership to the buyer which

normally takes place on despatch.The amount recognised as sale is

net of sales tax and sales returns.Sales are presented both gross and

net of excise duty.

(ii) (ii) (ii) (ii) (ii) Income from servicesIncome from servicesIncome from servicesIncome from servicesIncome from services

Income from marketing operationsis recognised when the services are

rendered in accordance with thearrangements with tie up units.

(iii)(iii)(iii)(iii)(iii) Interest Interest Interest Interest Interest

Interest is recognised using the timeproportion basis taking into account

the amount outstanding and theinterest rate applicable.

1.51.51.51.51.5 Fixed assetsFixed assetsFixed assetsFixed assetsFixed assets

Fixed assets are carried at cost of

acquisition or construction lessaccumulated depreciation and

provision for impairment of assets.The cost of fixed assets includes

freight, duties, taxes and otherincidental expenses related to the

acquisition or construction of therespective assets. Borrowing costs

directly attributable to acquisition orconstruction of those fixed assets

which necessarily take a substantialperiod of time to get ready for their

intended use are capitalised to theextent they relate to the period till

such assets are ready to be put touse. Intangible assets are recorded

at their acquisition cost.

Advances paid towards the

acquisition or construction of fixedassets outstanding at the balance

sheet date and the cost of the fixedassets not ready for their intended

use before such date, are disclosedas capital work-in-progress.

The Company considers containersprocured as fixed assets due to its

substantive nature of arrangement,that the Company sells beer and not

the accompanying container andempty containers are essentially

returnable.

Accordingly, new containers

purchased are capitalised as fixedassets and the obligation arising on

sale, for these returnable containersare disclosed separately in the

balance sheet as liability forreturnable containers.

1.61.61.61.61.6 DepreciationDepreciationDepreciationDepreciationDepreciation

Depreciation on fixed assets is

provided on the straight-line methodas per the rates and in the manner

prescribed in Schedule XIV to theCompanies Act, 1956. The rates of

depreciation prescribed in ScheduleXIV to the Companies Act, 1956 are

considered as minimum rates.However, where the management’s

estimate of the useful life of a fixedasset at the time of acquisition of

the asset or of the remaining usefullife on a subsequent review is

shorter than that envisaged in theaforesaid schedule, depreciation is

provided at a higher rate based onthe management’s estimate of useful

life/ remaining useful life.

Leasehold land is amortised over the

lease term. Leaseholdimprovements are amortised over

the lease term or its estimateduseful life of five years, whichever is

lower.

Schedules to the financial statements


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 previouslyassessed impairment loss no longer

exists, the recoverable amount isreassessed and the asset is

reflected at the recoverable amountsubject to a maximum of

depreciable historical cost. Animpairment loss is reversed only to

the extent that the carrying amountof asset does not exceed the net

book value that would have beendetermined; if no impairment loss

had been recognised.

1.81.81.81.81.8 Borrowing costsBorrowing costsBorrowing costsBorrowing costsBorrowing costs

Borrowing costs directly attributableto acquisition or construction of

those fixed assets, which necessarilytake a substantial period of time to

get ready for their intended use, arecapitalised. Other borrowing costs

are accounted as an expense.

1.91.91.91.91.9 InvestmentsInvestmentsInvestmentsInvestmentsInvestments

Long-term investments are carried

at cost less any other-than-temporary diminution in the value, as

determined by management oncommercial consideration

determined separately for eachindividual investment.

1.101.101.101.101.10 Inventories Inventories Inventories Inventories Inventories

Inventories are valued at lower of

cost and net realisable value. Costof inventories comprises purchase

price, costs of conversion and othercosts incurred in bringing the

inventories to their present locationand condition.

The methods of determination ofcost of various categories of

inventories are as follows:

Pro-rated depreciation is provided

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

individually Rs 5,000 or less, otherthan returnable containers, are

depreciated in full in the year ofpurchase.

The useful lives of brands, whichprimarily represent brand licenses

purchased, have been determinedbased on management’s

assessment of market conditions inIndia, intent to use and ability to

maintain these assets, previoushistory of these brands and

internationally accepted practices.

1.71.71.71.71.7 ImpairmentImpairmentImpairmentImpairmentImpairment

The Company periodically assesseswhether there is any indication that

an asset or a group of assetscomprising a cash generating unit

may be impaired. If any suchindication exists, the Company

estimates the recoverable amount ofthe asset. For an asset or group of

assets that does not generatelargely independent cash inflows, the

recoverable amount is determinedfor the cash-generating unit to which

the asset belongs. If suchrecoverable amount of the asset or

the recoverable amount of the cashgenerating unit to which the asset

belongs is less than its carryingamount, the carrying amount is

reduced to its recoverable amount.The reduction is treated as an

impairment loss and is recognised inthe profit and loss account. The

recoverable amount is higher of theassets, net selling price and value in

use.

After recognition of impairment loss,

depreciation is provided on therevised carrying amount of the

Pursuant to this policy the following fixed assets are depreciated to their residual

value over their estimated useful life:

Class of assetsClass of assetsClass of assetsClass of assetsClass of assets YYYYYearsearsearsearsears

Returnable containers (included in plant and machinery) 2

Wooden pallets (included under plant and machinery) 3

Computer equipments 4

Furniture, fittings and office equipments 6

Brands 20

Computer software 3

24

25

Raw materials, packing materialsand stores and spares – First-in-

first-out (FIFO) method

Work-in-progress and finished

goods – FIFO method. Productionoverheads are allocated on the basis

of normal capacity of productionfacilities.

Maintenance spares, which are inregular use and are not an integral

part of any fixed asset, are treatedas inventory and valued at cost.

The comparison of cost and netrealisable value is made on an item-

by-item basis. The net realisablevalue of work-in-progress is

determined with reference to theselling prices of related finished

goods in the ordinary course ofbusiness, less estimated cost of

completion and estimated costsnecessary to make the sale. Raw

materials, packing materials andother supplies held for use in

production of inventories are notwritten below cost except in cases

where material prices have declined,and it is estimated that the cost of

the finished products will exceedtheir net realisable value.

1.111.111.111.111.11 Foreign exchangeForeign exchangeForeign exchangeForeign exchangeForeign exchange

Foreign exchange transactions arerecorded at the rates of exchange

prevailing on the dates of therespective transactions. Exchange

differences arising on foreignexchange transactions settled

during the year are recognised in theprofit and loss account for the year.

Monetary assets and liabilitiesdenominated in foreign currencies as

at the balance sheet date aretranslated at the closing exchange

rate on that date; the resultantexchange differences are recognised

in the profit and loss account.

Forward contracts are entered into

to hedge the foreign currency risk ofthe underlying outstanding at the

balance sheet date. The premium ordiscount on all such contracts

arising at the inception of eachcontract is amortised as income or

expense over the life of the contract.Any profit or loss arising on the

cancellation or renewal of forwardcontracts is recognised as income

or as expense for the period.

The exchange difference on theforward exchange contract entered

into to hedge the foreign currencyrisk of the underlying outstanding at

the balance sheet date, is calculatedas the difference between the foreign

currency amount of the contracttranslated at the exchange rate at

the reporting date, or the settlementdate where the transaction is settled

during the reporting period, and thecorresponding foreign currency

amount translated at the later of thedate of inception of the forward

exchange contract and the lastreporting date. Such exchange

differences are recognised in theprofit and loss account in the

reporting period in which theexchange rates change.

In accordance with the ICAIannouncement – Accounting for

derivatives, the Company providesfor losses in respect of all

outstanding derivative contracts atthe balance sheet date by marking

them to market.

1.121.121.121.121.12 Retirement benefitsRetirement benefitsRetirement benefitsRetirement benefitsRetirement benefits

(i) Contributions to provident funds,which is a defined contribution

scheme, are charged to the profitand loss account on an accrual

basis.

(ii) The Company has an arrangement

with Life Insurance Corporation ofIndia to administer its

superannuation scheme, which is adefined contribution scheme. The

contributions to the said scheme arecharged to the profit and loss

account on an accrual basis.

(iii) Liability for gratuity, which is adefined benefit schemes is provided

for based on an actuarial valuationcarried out by an independent

actuary as at the balance sheet date.Actuarial gains/ losses are

recognised immediately in the profitand loss account and are not

deferred.

(iv) Long term compensated absences

are provided for based on actuarialvaluation.

In the current year due to adoptionof the AS 15 - Employee benefits

(Revised 2005), the Company hasprovided for long term

compensated absences based onactuarial valuation. Further in

accordance with the transitionalprovision in AS 15 - Employee

benefits (Revised 2005),Rs 13,670,268 (net of deferred tax

asset of Rs 7,039,122) has beenadjusted to the general reserve.

This change did not result in amaterial impact on the profit for the

current year.

1.131.131.131.131.13 LeasesLeasesLeasesLeasesLeases

Leases where the lessor effectivelyretains substantially all the risks and

rewards of ownership of the leasedasset, are classified as operating

leases. Operating lease paymentsare recognised as an expense in the

profit and loss account on astraight-line basis over the lease

term.



1.141.141.141.141.14 Provisions and contingentProvisions and contingentProvisions and contingentProvisions and contingentProvisions and contingent

liabilitiesliabilitiesliabilitiesliabilitiesliabilities

The Company recognises aprovision when there is a present

obligation as a result of an obligatingevent that probably requires outflow

of resources and a reliable estimatecan be made of the amount of the

obligation. A disclosure of acontingent liability is made when

there is a possible obligation or apresent obligation that may, but

probably will not, require an outflowof resources. When there is a

possible obligation or a presentobligation that the likelihood of

outflow of resources is remote, noprovision or disclosure is made.

Provisions for onerous contracts,i.e. contracts where the expected

unavoidable costs of meeting theobligations under the contract

exceed the economic benefitsexpected to be received under it, are

recognised when it is probable thatan outflow of resources embodying

economic benefits will be required tosettle a present obligation as a result

of an obligating event, based on areliable estimate of such obligation.

1.151.151.151.151.15 TTTTTaxationaxationaxationaxationaxation

Income tax expense comprises

current tax (i.e. amount of tax for theyear determined in accordance with

the income tax law) and deferred taxcharge or credit (reflecting the tax

effects of timing differences betweenaccounting income and taxable

income for the year). The deferredtax charge or credit and the

corresponding deferred tax liabilitiesor assets are recognised using the

tax rates that have been enacted orsubstantively enacted by the balance

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

is reasonable certainty that theassets can be realised in future;

however, where there is unabsorbeddepreciation or carried forward

business loss under taxation laws,deferred tax assets are recognised

only if there is a virtual certainty ofrealisation of such assets.

Deferred tax assets are reviewed as

at each balance sheet date andwritten 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) anddeferred tax assets and liabilities,

where it has a legally enforceableright and where it intends to settle

such assets and liabilities on a netbasis.

Minimum Alternative Tax (“MAT”)credit is recognised as an asset only

when and to the extent there isconvincing evidence that the

Company will pay normal income taxduring the specified period. In the

year in which the MAT creditbecomes eligible to be recognised

as an asset in accordance with therecommendations contained in the

guidance note issued by ICAI, thesaid asset is created by way of a

credit to the profit and loss account.The Company reviews the same at

each balance sheet date and writesdown the carrying amount of MAT

credit entitlement to the extent thereis no longer convincing evidence to

the effect that Company will paynormal income tax during the

specified period.

The Company provides for and

discloses the Fringe Benefit Tax(“FBT”) in accordance with the

provisions of Section 115 WC of theIncome-tax Act, 1961 and the

guidance note on FBT issued byICAI.

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

The basic earnings per share is

computed by dividing the net profitor loss attributable to equity

shareholders for the year by theweighted average number of equity

shares outstanding during the year.The number of equity shares used in

computing diluted earnings per sharecomprises the weighted average

shares considered for deriving basicearnings per share, and also the

weighted average number of equityshares, which would have been

issued on conversion of allpotentially dilutive equity shares.

Potential dilutive equity shares aredeemed converted as of the

beginning of the year, unless theyhave been issued at a later date.

The potentially dilutive equity shareshave been adjusted for the proceeds

receivable had the shares beenactually issued at a fair value (i.e. the

average market value of the

outstanding shares). In computingthe dilutive earnings per share, only

potential equity shares that aredilutive and that either reduces the

earnings per share or increases lossper share are included.

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

costcostcostcostcost

The Company applies intrinsic valuemethod of accounting for stock

options granted by the ultimateholding company to the employees

of the Company after 1 April 2005.The intrinsic value of the employee

services received in exchange for thegrant of such options is recognised

as an expense. The amountrecognised is spread over the

vesting period which is also theperiod over which some of the

scheme performance criteria relate.At each balance sheet date, the

estimates of the number of optionsthat are expected to become

excercisable are revised. Itrecognises the impact of the revision

of the original estimates, if any, in theprofit and loss account over the

remaining vesting period. The effectof uncertainty as to whether any

performance criteria of shareoptions will be met is dealt with by

estimating the probability of sharesvesting and therefore the cost is

adjusted and readjusted for theprobability of vesting in the vesting

period.

26

27


(Rs.)

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


AuthorisedAuthorisedAuthorisedAuthorisedAuthorised250,000,000 (previous year: 200,000,000) equity shares of Rs. 10 each 2,500,000,000 2,000,000,000

2,500,000,0002,500,000,0002,500,000,0002,500,000,0002,500,000,000 2,000,000,0002,000,000,0002,000,000,0002,000,000,0002,000,000,000

Issued, subscribed and paid upIssued, subscribed and paid upIssued, subscribed and paid upIssued, subscribed and paid upIssued, subscribed and paid up

231,183,745 (previous year: 197,915,888) equity shares of Rs. 10 each fully paid-up 2,311,837,450 1,979,158,880

2,311,837,4502,311,837,4502,311,837,4502,311,837,4502,311,837,450 1,979,158,880 1,979,158,880 1,979,158,880 1,979,158,880 1,979,158,880

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(formerly Foster’s India Private Limited), the holding company. 87,341,038 (previous year: 54,073,181) equity shares of Rs. 10

each are held by SABMiller Asia B.V. 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, inearlier years, for consideration other than in cash.

(Rs.)

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


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

Securities premiumSecurities premiumSecurities premiumSecurities premiumSecurities premiumAt the beginning of the year 4,608,316,326 3,500,620,686

Addition during the year 1,530,321,422 1,107,695,640

6,138,637,7486,138,637,7486,138,637,7486,138,637,7486,138,637,748 4,608,316,3264,608,316,3264,608,316,3264,608,316,3264,608,316,326

General reserveGeneral reserveGeneral reserveGeneral reserveGeneral reserveAt the beginning of the year 1,232,069,584 1,232,069,584

Less: Adjustment for employee benefit provision (net of tax of Rs. 7,039,122) (13,670,268) -----(Refer to note 1.12)

Less: Debit balance in profit and loss account (952,184,208) (1,232,069,584)

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

6,406,852,8566,406,852,8566,406,852,8566,406,852,8566,406,852,856 4,610,316,326 4,610,316,326 4,610,316,326 4,610,316,326 4,610,316,326

(Rs.)

4. Unsecured loans4. Unsecured loans4. Unsecured loans4. Unsecured loans4. Unsecured loans As atAs atAs atAs atAs at As at


Bank overdraft 263,732,853 -

Short term loansShort term loansShort term loansShort term loansShort term loansFrom banks 2,650,010,288 3,115,000,000

From others - 700,000,000

Other loans and advancesOther loans and advancesOther loans and advancesOther loans and advancesOther loans and advancesFrom banks [Refer note (a) below] 442,092,599 624,887,850

From others:- loan from holding company [Refer note (b) below] 385,269,911 179,444,262

- deferred sales tax loan 33,316,355 33,316,355

3,774,422,0063,774,422,0063,774,422,0063,774,422,0063,774,422,006 4,652,648,467 4,652,648,467 4,652,648,467 4,652,648,467 4,652,648,467

Notes:Notes:Notes:Notes:Notes:

a) Amount repayable within a period of 12 months Rs. 207,625,175 (previous year: Rs. 264,545,950).b) Tenure and terms for repayment have not been specified for loans obtained from holding Company.


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9

Pre

vious

year

6,1

43,5

11,5

06

3,0

20,5

33,5

59

368,5

78,5

62

8,7

95,4

66,5

03

1,0

56,8

02,6

34

625,2

47,1

95

1

56,8

99,1

93

1,5

25,1

50,6

36

5

2,5

23,8

98

7,2

17,7

91,9

69

28

29

(Rs.)

6. Investments6. Investments6. Investments6. Investments6. Investments As atAs atAs atAs atAs at As at


Long term investmentsLong term investmentsLong term investmentsLong term investmentsLong term investments

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

(i) Government and trust securities(i) Government and trust securities(i) Government and trust securities(i) Government and trust securities(i) Government and trust securitiesNational Savings Certificates 2,019,500 2,151,500

Indira Vikas Patra 26,550 26,5502,046,050 2,178,050

(ii) Fully paid equity shares(ii) Fully paid equity shares(ii) Fully paid equity shares(ii) Fully paid equity shares(ii) Fully paid equity shares

1 (previous year: Nil) fully paid equity shares of Rs. 10 each of MBL (AP) Breweries Limited 1 -12,000 (previous year: Nil) fully paid equity shares of Rs. 10 each of Shushruta Medical Aid 12,000 -

and Research Hospitals Limited5,000 (previous year: Nil) fully paid equity shares of Rs. 10 each of Maini Granites Limited 5,000 -

300 (previous year: Nil) fully paid equity shares of Rs. 10 each in AP Heavy Machinery & 300 -Engineering Limited

10,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Ramanashree 10,000 -Comforts Limited

10,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Anusha 10,000 -International Limited

1,700 (previous year: Nil) fully paid equity shares of Rs. 100 each in Maa Communication 1,700 -Bozel Limited

7,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Sachdev 7,000 -International Limited

12,500 (previous year: Nil) fully paid equity shares of Rs. 10 each in Scarlet Flowers 12,500 -and Agritech Limited

100 (previous year: Nil) fully paid equity shares of Rs. 10 each in Indana Spices 100 -and Food India Limited

80,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Vulcan Leasing 80,000 -and Investments Limited

5,005 (previous year: 5,005) fully paid equity shares of Rs. 100 each in 500,500 500,500Janata Sahakari Bank Limited

295 (previous year: 295) fully paid equity shares of Rs. 100 each in Haryana State 29,500 29,500Cooperative Bank Limited

668,601 530,000

2. Non trade - quoted2. Non trade - quoted2. Non trade - quoted2. Non trade - quoted2. Non trade - quoted

Fully paid equity sharesFully paid equity sharesFully paid equity sharesFully paid equity sharesFully paid equity shares

15,000 (previous year: Nil) fully paid equity shares of Rs. 1 each in ITC Limited 2,619,750 -400 (previous year: Nil) fully paid equity shares of Rs. 10 each in Ultratech Cement Limited 400,060 -

80 (previous year: Nil) fully paid equity shares of Rs. 10 each in Tata Motors Limited 56,944 -15,000 (previous year: Nil) fully paid equity shares of Rs. 2 each in Gujarat Ambuja 2,115,000 -

Cement Limited500 (previous year: Nil) fully paid equity shares of Rs. 2 each in Larsen & Toubro Limited 2,598,850 -

700 (previous year: Nil) fully paid equity shares of Rs. 2 each in Satyam Computers Limited 633,500 -50,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Super Star 50,000 -

Distilleries Limited8,600 (previous year: 8,600) fully paid equity shares of Rs. 10 each in 700,470 -

Syndicate Bank Limited9,174,574 -

TTTTTotal long terotal long terotal long terotal long terotal long term investmentm investmentm investmentm investmentm investment 11,889,225 2,708,050

Less: Provision for, other than temporary, diminution in the value of investments (530,000) (530,000)

11,359,22511,359,22511,359,22511,359,22511,359,225 2,178,050 2,178,050 2,178,050 2,178,050 2,178,050

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

Quoted investmentAggregate book value 9,174,574 -

Aggregate market value 7,775,281 - - - - -Aggregate book value of unquoted investments 2,184,651 2,178,050



(Rs.)

7. Inventories7. Inventories7. Inventories7. Inventories7. Inventories As atAs atAs atAs atAs at As at


Raw materials and packing materials 424,926,983 337,185,005

Stores and spares 61,739,226 52,980,580Work-in-progress 124,986,877 99,559,379

Finished goods 560,769,112 272,181,012Goods in transit - finished goods 3,372,180 9,755,154

Traded goods 7,688,487 2,858,364

1,183,482,8651,183,482,8651,183,482,8651,183,482,8651,183,482,865 774,519,494 774,519,494 774,519,494 774,519,494 774,519,494

(Rs.)

8. Sundry debtors8. Sundry debtors8. Sundry debtors8. Sundry debtors8. Sundry debtors As at As at As at As at As at As at


UnsecuredDebts outstanding for a period exceeding six months

- considered good 30,028,871 24,356,971- considered doubtful 210,674,357 251,018,532

240,703,228 275,375,503

Other debts- considered good 2,506,190,512 1,460,225,259

- considered doubtful 88,980,586 31,803,0922,835,874,326 1,767,403,854

Less: Provision for doubtful debts (299,654,943) (282,821,624)

2,536,219,3832,536,219,3832,536,219,3832,536,219,3832,536,219,383 1,484,582,230 1,484,582,230 1,484,582,230 1,484,582,230 1,484,582,230

(Rs.)

9. Cash and bank balances9. Cash and bank balances9. Cash and bank balances9. Cash and bank balances9. Cash and bank balances As at As at As at As at As at As at


Cash on hand 666,437 716,440Cheques in hand 41,338,772 12,177,795

Balances with scheduled banks- in current accounts 256,264,031 3,369,335,296

- in deposit accounts (Refer note below) 11,864,657 663,375,409- in unclaimed dividend accounts 1,117,210 1,857,915

311,251,107311,251,107311,251,107311,251,107311,251,107 4,047,462,855 4,047,462,855 4,047,462,855 4,047,462,855 4,047,462,855

Note:Note:Note:Note:Note:Balance in deposit account include Rs. Nil (previous year: Rs. 651,824,262) held in an escrow account pursuant to a share

purchase agreement and Rs. 11,864,657 (previous year: Rs. 11,551,147) in margin money account.

30

31


(Rs.)

10. Loans and advances10. Loans and advances10. Loans and advances10. Loans and advances10. Loans and advances As at As at As at As at As at As at


UnsecuredConsidered goodAdvances recoverable in cash or in kind or for value to be received 537,839,857 629,683,132Inter-corporate deposits [Refer note (b) below] - 117,947,601

Other deposits 172,613,021 98,352,285Advance fringe benefit tax (net of provision) 1,264,449 3,163,673

Advance tax and tax deducted at source (net of provision for income-tax) 135,499,862 80,469,118Balances with excise authorities 393,797,080 182,569,025

Interest accrued but not due 1,928,313 1,860,4491,242,942,582 1,114,045,283

Considered doubtfulAdvances recoverable in cash or in kind or for value to be received 170,218,956 78,697,798

Less: Provision for doubtful advances (170,218,956) (78,697,798)

1,242,942,5821,242,942,5821,242,942,5821,242,942,5821,242,942,582 1,114,045,283 1,114,045,283 1,114,045,283 1,114,045,283 1,114,045,283

Notes:Notes:Notes:Notes:Notes:(a) Dues from companies under the same management outstanding as at the balance sheet date:

MBL Investments Limited - 110,785,131SABMiller India Limited - 7,162,470

Maximum amount outstanding during the year:

MBL Investments Limited 128,785,130 1,285,871,421SABMiller India Limited 9,560,863 7,162,470

(b) Terms for repayment, utilisation and tenure are not specified for inter-corporate deposits.

(Rs.)

11. Current liabilities11. Current liabilities11. Current liabilities11. Current liabilities11. Current liabilities As at As at As at As at As at As at


Acceptances 19,956,173 75,794,196

Sundry creditors- micro and small enterpises 34,630,832 22,730,751

- others 710,036,322 841,449,692Payable to group companies 1,008,195,088 592,392,333

Deposits from customers and del credre 81,907,134 69,767,947Book overdraft - 299,863

Interest accrued but not due 11,167,966 23,225,241Liability for returnable containers 601,678,875 452,728,876

Accrual for schemes 302,293,444 293,875,492Excise duty payable 290,387,687 140,906,636

Other current liabilities 996,760,204 872,083,122Investor education and protection fund shall be credited by the following amounts when due:

- Unclaimed dividend 1,117,210 1,857,915- Unclaimed matured public deposit 30,000 30,000

4,058,160,9354,058,160,9354,058,160,9354,058,160,9354,058,160,935 3,387,142,064 3,387,142,064 3,387,142,064 3,387,142,064 3,387,142,064

(Rs.)

12. Provisions12. Provisions12. Provisions12. Provisions12. Provisions As at As at As at As at As at As at


Provision for other retirement benefits 48,395,186 36,231,793Provision for gratuity 44,489,785 33,649,994

Provision for income-tax (net of advance tax and tax deducted at source) 96,752,121 96,752,121Provision for claims (Refer to note 8 to Schedule 18) 171,556,592 260,118,088

361,193,684361,193,684361,193,684361,193,684361,193,684 426,751,996 426,751,996 426,751,996 426,751,996 426,751,996


(Rs.)

13. Other income13. Other income13. Other income13. Other income13. Other income For the year endedFor the year endedFor the year endedFor the year endedFor the year ended For the year ended


Sale of spent malt and scrap 107,032,547 68,652,855Interest

- inter-corporate deposit [tax deducted at source Rs. 836,719 3,692,493 76,980,042(previous year: Rs. 17,274,321)]

- fixed deposit [tax deducted at source Rs. 10,294,726 48,743,316 7,082,208(previous year: Rs. 1,412,752)]

Profit on sale of fixed assets, net 111,962,935 -Foreign exchange gain, net - 482,590

Miscellaneous income 10,335,923 25,991,029

281,767,214 281,767,214 281,767,214 281,767,214 281,767,214 179,188,724 179,188,724 179,188,724 179,188,724 179,188,724

(Rs.)

14. Material cost of sales14. Material cost of sales14. Material cost of sales14. Material cost of sales14. Material cost of sales For the year endedFor the year endedFor the year endedFor the year endedFor the year ended For the year ended


Cost of traded goods sold 129,050,240 54,968,572Raw materials and packing materials consumed 2,902,518,808 2,049,716,722

Malt processing charges 172,798,620 163,061,821

Opening stockWork-in-progress 99,559,379 73,454,460

Finished goods 281,936,166 216,594,652381,495,545 290,049,112

Less: Excise duty on opening stock 140,906,636 120,095,328

(A) 240,588,909 169,953,784

Closing stockWork-in-progress 124,986,877 99,559,379Finished goods 564,141,292 281,936,166

689,128,169 381,495,545Less: Excise duty on closing stock 304,023,888 140,906,636

(B) 385,104,281 240,588,909

(Increase) in work-in-progress and finished goods (A-B) (144,515,372) (70,635,125)

3,059,852,2963,059,852,2963,059,852,2963,059,852,2963,059,852,296 2,197,111,9902,197,111,9902,197,111,9902,197,111,9902,197,111,990

(Rs.)

15. Personnel costs15. Personnel costs15. Personnel costs15. Personnel costs15. Personnel costs For the year endedFor the year endedFor the year endedFor the year endedFor the year ended For the year ended


Salaries, wages and bonus 729,129,579 530,219,354Contributions to provident and other funds 27,672,075 24,512,076

Gratuity expense 10,839,791 (368,972)Other retirement benefits 1,625,400 13,532,254

Workmen and staff welfare 35,661,451 35,387,869

804,928,296 804,928,296 804,928,296 804,928,296 804,928,296 603,282,581 603,282,581 603,282,581 603,282,581 603,282,581

32

33

(Rs.)

16. Other expenses16. Other expenses16. Other expenses16. Other expenses16. Other expenses For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended


Cost of returnable containers 1,652,361,344 1,321,272,433Sales scheme expenses 399,092,351 295,341,245

Freight outward 641,104,558 478,639,388Power and fuel 594,402,878 511,425,819

Advertisement and publicity 579,909,782 494,186,897License fees 409,179,310 317,551,028

Rates and taxes 220,206,608 179,916,536Legal and professional fees 132,552,686 88,661,721

Clearing and forwarding 187,930,192 167,139,691Travel 97,313,383 82,708,264

Consumption of stores and spares 102,150,451 78,409,579Rent 75,261,801 31,655,513

Repairs and maintenance- buildings 12,283,695 4,787,995

- plant and machinery 24,739,869 20,486,550- others 25,023,663 6,328,192

Telephone and other communication 31,940,020 25,257,507Training and development 21,112,274 23,304,872

Insurance 24,455,559 18,781,313Provision for doubtful debts 16,833,319 14,063,536

Bad debts written off 14,296,898 13,321,823Printing and stationery 11,613,540 10,115,826

Provision for doubtful loans and advances 91,521,158 7,553,477Doubtful advances written off 8,322,007 -

Provision for claims, net (88,561,496) 7,465,500Bank charges 5,348,994 5,847,358

Loss on sale of fixed assets/ assets discarded, net - 3,652,936Foreign exchange loss, net 49,754,609 -

Miscellaneous expenses 129,705,355 140,197,366

5,469,854,808 5,469,854,808 5,469,854,808 5,469,854,808 5,469,854,808 4,348,072,3654,348,072,3654,348,072,3654,348,072,3654,348,072,365

(Rs.)

17. Interest17. Interest17. Interest17. Interest17. Interest For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended


On long term loans 37,764,439 62,310,463On short term loans 111,094,489 218,907,190

Others 17,297,303 32,148,661

166,156,231 166,156,231 166,156,231 166,156,231 166,156,231 313,366,314313,366,314313,366,314313,366,314313,366,314

Less: Interest capitalised (17,989,690) -

148,166,541 148,166,541 148,166,541 148,166,541 148,166,541 313,366,314313,366,314313,366,314313,366,314313,366,314



18 . Notes to the accounts

1.1.1.1.1. Contingent liabilities and other commitmentsContingent liabilities and other commitmentsContingent liabilities and other commitmentsContingent liabilities and other commitmentsContingent liabilities and other commitments (Rs.)



Claims against the Company not acknowledged as debts in respect of:

a) Sales tax matters 99,301,341 19,266,669

b) Excise matters 91,641,840 12,008,822

c) Other matters 32,379,016 32,379,016

Other commitments

d) Bank guarantees 16,414,057 11,423,917

e) Estimated amount of contracts remaining to be

executed on capital account (net of advances) and not provided for 1,243,881,396 526,933,187

2.2.2.2.2. Auditors’ remuneration, net of service tax (included under legal and professional fees)Auditors’ remuneration, net of service tax (included under legal and professional fees)Auditors’ remuneration, net of service tax (included under legal and professional fees)Auditors’ remuneration, net of service tax (included under legal and professional fees)Auditors’ remuneration, net of service tax (included under legal and professional fees) (Rs.)

For the year endedFor the year endedFor the year endedFor the year endedFor the year ended For the year ended


Audit fees 8,300,000 8,300,000

Taxation matters 1,000,000 1,000,000

Other matters 1,750,000 -

Reimbursement of expenses 466,327 467,271

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



Profit for the year attributable to equity shareholders 344,777,187 401,891,802

Weighted average number of equity shares of Rs. 10 227,184,330 188,085,831

each used for calculation of basic earnings per share

Adjustments for dilutive effect of share application money 3,999,415 380,211

Weighted average number of equity shares of Rs. 10 231,183,745 188,466,042each used for calculation of diluted earnings per share

Basic earnings per share 1.52 2.14

Diluted earnings per share 1.49 2.13

34

35


BeerBeerBeerBeerBeer

For the year ended31 March 2007

For the year endedFor the year endedFor the year endedFor the year endedFor the year ended

31 March 200831 March 200831 March 200831 March 200831 March 2008

QuantityQuantityQuantityQuantityQuantity AmountAmountAmountAmountAmount Quantity Amount(in cases)(in cases)(in cases)(in cases)(in cases) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (in cases) (Rs.)

Opening stock 11,154 2,858,364 - -

Purchases 837,335 133,880,363 412,834 57,826,936

Sales (gross of excise duty and discounts)** 831,010 296,758,472 401,680 100,449,130

Closing stock 17,479 7,688,487 11,154 2,858,364

** Includes 65 (previous year: 46) cases towards breakages, damages and wastage.

BeerBeerBeerBeerBeer

For the year ended31 March 2007



(b)(b)(b)(b)(b) Details of traded goodsDetails of traded goodsDetails of traded goodsDetails of traded goodsDetails of traded goods

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



Licensed capacity 50,126,379 50,544,973

Installed capacity* 50,007,210 47,358,393

Actual production 48,280,572 39,417,005

* Installed capacity is as certified by management and relied upon by the auditors being a technical matter.

UnitsUnitsUnitsUnitsUnits QuantityQuantityQuantityQuantityQuantity Amount (Rs.)Amount (Rs.)Amount (Rs.)Amount (Rs.)Amount (Rs.) Quantity Amount (Rs.)

Malt (Note 1) MT 55,597 1,349,766,485 44,869 883,393,935

Cartons Nos 43,940,130 263,950,089 35,189,509 214,282,721

Cans Nos 53,451,141 348,979,529 35,294,669 235,326,858

Others (Note 2) 1,112,621,324 879,775,029

TTTTTotalotalotalotalotal 3,075,317,4273,075,317,4273,075,317,4273,075,317,4273,075,317,427 2,212,778,543

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.

For the year ended

31 March 2007



(d) Consumption of raw materials and packing materials(d) Consumption of raw materials and packing materials(d) Consumption of raw materials and packing materials(d) Consumption of raw materials and packing materials(d) Consumption of raw materials and packing materials

18. Notes to the accounts

4.4.4.4.4. Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the CompaniesAct, 1956 (quantitative information has been compiled from records and technical data in respect of each class of goods

manufactured/ purchased by the Company):

(a) (a) (a) (a) (a) Details of finished goods and turnoverDetails of finished goods and turnoverDetails of finished goods and turnoverDetails of finished goods and turnoverDetails of finished goods and turnover

QuantityQuantityQuantityQuantityQuantity AmountAmountAmountAmountAmount Quantity Amount(in cases)(in cases)(in cases)(in cases)(in cases) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (in cases) (Rs.)

Opening stock 1,330,528 281,936,166 936,242 216,594,652

Sales (gross of excise duty and discounts)* 47,428,745 17,120,144,115 39,022,719 13,384,952,487

Closing stock 2,182,355 564,141,292 1,330,528 281,936,166

* Includes 62,321 (previous year: 102,035) cases charged to consumption on account of breakages, damages and wastage.


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

For the year ended

31 March 2007



(f)(f)(f)(f)(f) Consumption of imported and indigenous stores and sparesConsumption of imported and indigenous stores and sparesConsumption of imported and indigenous stores and sparesConsumption of imported and indigenous stores and sparesConsumption of imported and indigenous stores and spares


5.5.5.5.5. VVVVValue of imporalue of imporalue of imporalue of imporalue of imports on CIF basists on CIF basists on CIF basists on CIF basists on CIF basis (Rs.)



Raw materials and packing materials 447,980,124 220,932,703

Spare parts 1,367,463 1,463,646

Capital goods 128,484,910 18,639,095

577,832,497577,832,497577,832,497577,832,497577,832,497 241,035,444

6.6.6.6.6. Gratuity planGratuity planGratuity planGratuity planGratuity plan

The Company has a defined gratuity plan. 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 obligationunder the scheme is partially funded by contributions being made to an insurance company.

Profit and loss accountProfit and loss accountProfit and loss accountProfit and loss accountProfit and loss account

Net employee benefit expense (recognised in personnel expenses) (Rs.)

ParticularsParticularsParticularsParticularsParticulars For the year endedFor the year endedFor the year endedFor the year endedFor the year ended For the year ended


Current service cost 6,028,085 5,981,296

Interest cost on benefit obligation 4,503,848 3,497,924

Expected return on plan assets (1,569,374) (1,530,691)

Net actuarial loss/ (gain) recognised for the year 1,877,232 (8,317,501)

Net benefit expenseNet benefit expenseNet benefit expenseNet benefit expenseNet benefit expense 10,839,79110,839,79110,839,79110,839,79110,839,791 (368,972)

Actual return on plan assets 1,318,667 1,680,632

For the year ended

31 March 2007



AmountAmountAmountAmountAmount PercentagePercentagePercentagePercentagePercentage Amount Percentage(Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)

Imported 1,749,696 2 2,002,513 3

Indigenous 100,400,755 98 76,407,066 97

TTTTTotalotalotalotalotal 102,150,451102,150,451102,150,451102,150,451102,150,451 100100100100100 78,409,579 100

AmountAmountAmountAmountAmount PercentagePercentagePercentagePercentagePercentage Amount Percentage(Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)

Imported 477,663,725 16 264,642,115 12

Indigenous 2,597,653,702 84 1,948,136,428 88

TTTTTotalotalotalotalotal 3,075,317,427 3,075,317,427 3,075,317,427 3,075,317,427 3,075,317,427 100100100100100 2,212,778,543 100

Balance SheetBalance SheetBalance SheetBalance SheetBalance Sheet

Details of provisions for gratuity (Rs.)

ParticularsParticularsParticularsParticularsParticulars As atAs atAs atAs atAs at As at


Defined benefit obligations 62,980,939 51,632,939

Fair value of plan assets 18,491,154 17,982,945

Plan liabilitiesPlan liabilitiesPlan liabilitiesPlan liabilitiesPlan liabilities 44,489,78544,489,78544,489,78544,489,78544,489,785 33,649,994

36

37

18. Notes to the accounts18. Notes to the accounts18. Notes to the accounts18. Notes to the accounts18. Notes to the accounts

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



Opening defined benefit obligation 51,632,939 55,673,233

Current service cost 6,028,085 5,981,296Interest cost 4,503,848 3,497,924

Benefits paid (810,458) (5,351,954)Actuarial loss/ (gain) on obligation 1,626,525 (8,167,560)

Closing defined benefit obligationClosing defined benefit obligationClosing defined benefit obligationClosing defined benefit obligationClosing defined benefit obligation 62,980,93962,980,93962,980,93962,980,93962,980,939 51,632,939

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



Opening fair value of plan assets 17,982,945 18,726,037Expected return on plan assets 1,569,374 1,530,691

Actuarial gain/(loss) on plan assets (250,707) 149,941Contributions by employer - 2,928,230

Benefits paid (810,458) (5,351,954)

Closing fair value of plan assetsClosing fair value of plan assetsClosing fair value of plan assetsClosing fair value of plan assetsClosing fair value of plan assets 18,491,15418,491,15418,491,15418,491,15418,491,154 17,982,945

The Company expects to contribute Rs. 10,000,000 in the qualifying insurance policy during 2008-09.

Major categories of plan assets as a percentage of the fair value of total plan assets



Investments with the insurer 100% 100%

Principal assumptions used in determining gratuity benefit obligations for the Company’s plan



Discount rate 7.60% 8.10%

Expected rate of return on plan assets 7.50% 7.50%

Salary increase 10% for Executives 10% for Executives7% for Workers 7% for Workers

Employee turnover 10% for Executives 10% for Executives2% 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 tothe period over which the obligation is to be settled.

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

ParticularsParticularsParticularsParticularsParticulars As atAs atAs atAs atAs at As at As at

31 March 200831 March 200831 March 200831 March 200831 March 2008 31 March 2007 31 March 2006

Defined benefit obligation 62,980,939 51,632,939 55,673,233Plan assets 18,491,154 17,982,945 18,726,037

Surplus/(deficit) 44,489,78544,489,78544,489,78544,489,78544,489,785 33,649,994 36,947,196Experienced adjustments on plan liabilities (293,399) (904,245) -

Experienced adjustments on plan assets (250,707) 149,941 (105,070)



18. Notes to the accounts18. Notes to the accounts18. Notes to the accounts18. Notes to the accounts18. Notes to the accounts

7. Segment reporting7. Segment reporting7. Segment reporting7. Segment reporting7. Segment reporting

The Company’s sole business segment is ‘Beer’ and the only geographical segment is ‘India’. Consequently, the requirement for a

separate disclosure as required under AS 17 – ‘Segment Reporting’ is not applicable.

8. Provision for claims8. Provision for claims8. Provision for claims8. Provision for claims8. Provision for claims

The provision for claims 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 ofutilization of the provision is determined by the course of the legal proceedings.

(Rs.)


Opening balance 260,118,088 262,046,509

Add: Addition during the year - 7,465,500Less: Amounts used during the year - (9,393,921)

Less: Unused amounts reversed during the year (88,561,496) -Closing balance 171,556,592171,556,592171,556,592171,556,592171,556,592 260,118,088

Details of provisions reversed during the year are:

(i)(i)(i)(i)(i) Franchisee feesFranchisee feesFranchisee feesFranchisee feesFranchisee feesThe Orissa State Excise Department had raised a demand for franchisee fee pertaining to the brands owned by Shaw Wallace

Breweries Limited (“SWBL”), and manufactured in East Coast Breweries and Distilleries Limited (“ECBDL”, now a unit of theCompany). The Company had provided Rs. 54,845,466 against the said demand.

During the current year, the honourable Supreme Court of India has ruled the case in favour of the Company. Consequently, the

said provision, has been reversed.

(ii)(ii)(ii)(ii)(ii) Labour related casesLabour related casesLabour related casesLabour related casesLabour related casesThe Haryana State Government had imposed a prohibition on manufacture and sale of beer in the state of Haryana in 1996.

Accordingly, Haryana Breweries Limited (“HBL”, now a unit of the Company) temporarily discontinued its operations andterminated services of employees. Subsequently, HBL re-commenced operations in 2001, after relaxation of rules by the State

Government and hired services of new employees. The erstwhile employees of HBL were aggrieved of this decision and hencefiled cases against the Company for reinstatement/ compensation. The Company had provided Rs. 33,716,030 against the

said labour demands.

During the current year, majority of the cases were settled in favour of the Company and the probability of adverse outcome inthe rest of the cases has been assessed as remote. Hence, provision has been reversed.

38

39


Nature of transactionsNature of transactionsNature of transactionsNature of transactionsNature of transactions Holding / ultimateHolding / ultimateHolding / ultimateHolding / ultimateHolding / ultimate FellowFellowFellowFellowFellow KeyKeyKeyKeyKey TTTTTotalotalotalotalotal

holding companyholding companyholding companyholding companyholding company subsidiariessubsidiariessubsidiariessubsidiariessubsidiaries managerialmanagerialmanagerialmanagerialmanagerial

personnelpersonnelpersonnelpersonnelpersonnel

Income from marketing operations 83,191,895 - - 83,191,895

(-) (48,222,324) (-) (48,222,324)

Interest income - 3,692,493 - 3,692,493

(73,823,431) (87,762) - (73,911,193)

Purchase of traded goods and raw materials 41,910,792 110,443,152 - 152,353,944

(-) (5,339,795) (-) (5,339,795)

License fees - 409,179,310 - 409,179,310

(-) (317,551,028) (-) (317,551,028)

Interest expense 2,758,904 - - 2,758,904

(-) (16,767) (-) (16,767)

Remuneration - - 22,434,668 22,434,668

(-) - (20,706,454) (20,706,454)

Reimbursement of expenses incurred 76,072,145 217,094 - 76,289,240

on behalf of the Company (1,111,255) (16,302,884) (-) (17,414,139)

Reimbursement of expenses incurred 15,350,134 1,895,208 - 17,245,342

on behalf of other companies (11,900,755) (9,056,742) (-) (20,957,497)

Inter-corporate deposit given, net - - - -

(7,094,402) (-) (-) (7,094,402)

Inter-corporate deposit refunded, net - 117,947,601 - 117,947,601

(1,218,523,943) (-) (-) (1,218,523,943)

9.9.9.9.9. Related partiesRelated partiesRelated partiesRelated partiesRelated parties

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

Enterprises where control exists1. Ultimate holding SABMiller plc

company

2. Holding company SABMiller Asia & Africa BV (effective 30 March 2007).SABMiller Breweries Private Limited (formerly Foster’s India Private Limited) (effective 30 March 2007)

SABMiller Asia B.V. (up to 30 March 2007)SABMiller India Limited (up to 30 March 2007)

MBL Investments Limited (up to 30 March 2007)

Names of other related parties with whom transactions have taken place during the year

1. Fellow MBL Property Developers Limited

subsidiaries SABMiller Finance B.V.S.p.A. Birra Peroni

SABMiller Breweries Private Limited (formerly Foster’s India Private Limited) (up to 30 March 2007)SABMiller Asia & Africa BV (up to 30 March 2007)

MBL Investments Limited (from 30 March 2007 to 30 September 2007)SABMiller India Limited (effective 30 March 2007)

SABMiller Asia B.V. (effective 30 March 2007)SABMiller Africa & Asia (Pty) Limited

2. Key managerial Richard Mark Rushton, Managing Director (up to 31 July 2006)

personnelJean-Marc Delpon de Vaux, Managing Director (effective 1 August 2006)

(ii) Related party transactionsRelated party transactionsRelated party transactionsRelated party transactionsRelated party transactions(Rs.)


http://www.sabmiller.in/brands_peroni.html

http://www.sabmiller.in/contact-us.html


(Rs.)




Loan repaid, net - - - -

(503,185) (1,000,000) (-) (1,503,185)

Loan taken, net 205,825,649 - - 205,825,649

(-) (220,000,000) (-) (220,000,000)

Share application money received - - - -

(-) (1,863,000,000) (-) (1,863,000,000)

Proceeds from issue of shares - - - -

(1,348,499,040) (-) (-) (1,348,499,040)

Purchase of investments - 9,313,175 - 9,313,175

(-) (-) (-) (-)

Sale of fixed assets 1,352,663 - - 1,352,663

(-) (-) (-) (-)

Purchase of fixed assets - 738,310 - 738,310

(-) (-) (-) (-)


(Rs.)




Unsecured loans 385,269,911 - - 385,269,911

(179,444,262) (-) (-) (179,444,262)

Payable to group companies 12,953,750 995,241,338 - 1,008,195,088

(9,882,626) (582,509,707) (-) (592,392,333)

Inter corporate deposit - - - -

(-) (117,947,601) (-) (117,947,601)

Advances recoverable in cash or in 1,001,003 8,521,725 - 9,522,728

kind or for value to be received (-) (-) (-) (-)

Figures in brackets represent previous year figures.

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

(iv) Tenure and terms for repayment have not been specified for unsecured loan obtained from the holding Company.

40

41


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



Deferred tax assetsDeferred tax assetsDeferred tax assetsDeferred tax assetsDeferred tax assets

Investments 180,147 178,398

Debtors 94,153,813 87,573,603

Loans and advances 51,127,403 19,824,999

Provision for retirement benefits 31,571,602 23,522,210

Provision for claims 52,349,240 63,189,810

Others 7,681,544 37,050,862

Unabsorbed depreciation 728,559,450 551,621,273

TTTTTotalotalotalotalotal 965,623,199965,623,199965,623,199965,623,199965,623,199 782,961,155

Deferred tax liabilitiesDeferred tax liabilitiesDeferred tax liabilitiesDeferred tax liabilitiesDeferred tax liabilities

Fixed assets 1,029,367,235 782,961,155

TTTTTotalotalotalotalotal 1,029,367,2351,029,367,2351,029,367,2351,029,367,2351,029,367,235 782,961,155

Deferred tax liabilities, netDeferred tax liabilities, netDeferred tax liabilities, netDeferred tax liabilities, netDeferred tax liabilities, net (63,744,036)(63,744,036)(63,744,036)(63,744,036)(63,744,036) -----

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

The above deferred tax liability includes Rs. 7,039,122 of deferred tax credit recognised directly in general reserve, which

pertains to provision towards employee benefits recognised directly in general reserve, using the transitional provision of AS 15(Revised).

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



Travel 8,672,944 6,441,321

License fees 409,179,310 317,551,028

Interest 29,531,653 45,744,418

Professional and consultation fees 23,244,952 14,793,793

Brand - 1,621,200,000

Others 8,791,717 12,054,585

479,420,576479,420,576479,420,576479,420,576479,420,576 2,017,785,145




12.12.12.12.12. Derivative instruments and un-hedged foreign currency exposureDerivative instruments and un-hedged foreign currency exposureDerivative instruments and un-hedged foreign currency exposureDerivative instruments and un-hedged foreign currency exposureDerivative instruments and un-hedged foreign currency exposure

Derivative instrumentsDerivative instrumentsDerivative instrumentsDerivative instrumentsDerivative instruments

ParticularsParticularsParticularsParticularsParticulars PurposePurposePurposePurposePurpose As atAs atAs atAs atAs at


Forward contract Hedge against repayment of foreign currency loan JPY 113,010,836Currency swap contract Hedge against repayment of foreign currency loan JPY 260,000,000

Currency swap contract Hedge against repayment of foreign currency loan USD 7,000,000

Hedge transactions are those which are defined as such at the inception of the transaction. No periodic evaluation of re-designationof hedges is required to be carried out. Notwithstanding the above, all hedge transactions are translated at year end rates and the

resulting gain or loss is recognised in the profit and loss account.

Particulars of un-hedged foreign currency exposure as at the balance sheet dateParticulars of un-hedged foreign currency exposure as at the balance sheet dateParticulars of un-hedged foreign currency exposure as at the balance sheet dateParticulars of un-hedged foreign currency exposure as at the balance sheet dateParticulars of un-hedged foreign currency exposure as at the balance sheet date

Underlying asset / liabilityUnderlying asset / liabilityUnderlying asset / liabilityUnderlying asset / liabilityUnderlying asset / liability As at March 2008As at March 2008As at March 2008As at March 2008As at March 2008 As at 31 March 2007

ForeignForeignForeignForeignForeign AmountAmountAmountAmountAmount Foreign Amount

currency amountcurrency amountcurrency amountcurrency amountcurrency amount in Rsin Rsin Rsin Rsin Rs currency amount in Rs

Bank balance USD 237,368 9,504,220 – –JPY 111,163,791 44,474,410 – –

Sundry creditors USD 645,120 25,830,605 USD 36,016 1,553,729EURO 950,423 54,009,069 – –

Interest accrued but not due USD 266,437 10,668,131 – –

Payable to group companies USD 5,409 216,587 USD 13,340 575,474ZAR 2,635,493 12,953,750 ZAR 1,602,984 9,533,569

13.13.13.13.13. Managerial remunerationManagerial remunerationManagerial remunerationManagerial remunerationManagerial remuneration

The details of remuneration paid to the managing director are as follows: (Rs.)



Salary and allowance 13,231,671 11,277,721

Perquisites 9,202,997 9,428,733

22,434,66822,434,66822,434,66822,434,66822,434,668 20,706,454

Note: As the future 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.

14.14.14.14.14. Provision for impairment of fixed assetsProvision for impairment of fixed assetsProvision for impairment of fixed assetsProvision for impairment of fixed assetsProvision for impairment of fixed assetsThe impairment loss amounting to Rs. 117,306,243 in the current year represents the write down of certain fixed assets to

their recoverable amount. These fixed assets (excluding assets already impaired in the prior year) have been rendered asredundant / 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 the year.

In the previous year, due to significant growth in the beer market and constraints in capacities, management revisited itsdecision to discontinue one of its brewery, which was impaired in earlier years. Accordingly, management had reassessed the

recoverable value of the brewery which resulted in reversal of impairment loss amounting to Rs. 101,662,427 being the lowerof recoverable value and the carrying amount of fixed assets determined (net of depreciation) had there been no impairment.

42

43



15.15.15.15.15. Management has initiated the process of identifying enterprises which have provided goods and services to the Company andwhich qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises

Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2008has been made in the financials statements based on information received and available with the Company. Further in the view of

the management, the impact of interest, if any, that may be payable in accordance with the provisions of the said Act is notexpected to be material. The Company has not received any claim for interest from any supplier under the said Act.

16.16.16.16.16. Operating leasesOperating leasesOperating leasesOperating leasesOperating leases

The Company is obligated under non-cancellable operating leases for office premises which are renewable at the option of both

the lessor and lessee. Total rental expense under non-cancellable operating leases entered on or after 1 April 2001 amountedto Rs. 8,260,160 (previous year: Rs. Nil) for the year ended 31 March 2008.

Future minimum lease payments under non-cancellable operating leases are as follows:

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. Total rental expense under cancellable operating lease entered amounted to Rs. 67,001,641(previous year: Rs. 31,655,513) for the year ended 31 March 2008.

17.17.17.17.17. Employee stock compensation costEmployee stock compensation costEmployee stock compensation costEmployee stock compensation costEmployee stock compensation cost

Guidance Note on “Accounting for Employee Share Based Payments” issued by the ICAI (‘the Guidance Note’) establishesfinancial 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 avariety of equity-settled share-based compensation plans for the employees of the Company.

(i) During the year ended 31 March 2008, the Group had the following share-based payment arrangements for the employees

of the Company.

(Rs.)


(i) The principal amount remaining unpaid to any supplier 34,095,709 22,387,599as at the end of each accounting year;

(ii) The amount of interest paid by the Company along Nil Nilwith 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 of Nil Nil

delay in making payment (which have been paid but beyondthe appointed day during the year) but without adding

the interest specified under this Act;

(iv) The amount of interest accrued and remaining 535,123 343,152

unpaid at the end of the year

(v) The amount of further interest remaining due and payable 535,123 343,152

even in the succeeding years, until such date when the interestdues as above are actually paid to the small enterprise.

(Rs.)

PeriodPeriodPeriodPeriodPeriod As at 31 March 2008As at 31 March 2008As at 31 March 2008As at 31 March 2008As at 31 March 2008 As at 31 March 2007

Not later than 1 year 16,336,414 -

Later than 1 year and not later than 5 years 32,588,625 -

Later than 5 years - - - - - -



TTTTType of arype of arype of arype of arype of arrangementrangementrangementrangementrangement Executive Share Option SchemeExecutive Share Option SchemeExecutive Share Option SchemeExecutive Share Option SchemeExecutive Share Option Scheme

[Approved and (No.2) Scheme][Approved and (No.2) Scheme][Approved and (No.2) Scheme][Approved and (No.2) Scheme][Approved and (No.2) Scheme]

As at March 2008As at March 2008As at March 2008As at March 2008As at March 2008 As at March 2007

Date of grant 18 May 2007 19 May 2006

Number of shares granted 92,200 95,377

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

TTTTType of arype of arype of arype of arype of arrangementrangementrangementrangementrangement International PerformanceInternational PerformanceInternational PerformanceInternational PerformanceInternational Performance

Share Award Sub-Scheme Share Award Sub-Scheme Share Award Sub-Scheme Share Award Sub-Scheme Share Award Sub-Scheme

As at March 2008As at March 2008As at March 2008As at March 2008As at March 2008 As at March 2007

Date of grant 18 May 2007 -

Number of shares granted 7,000 -

Method of settlement Equity -

Contractual life 10 years -

Vesting period 3 years -

Vesting conditions Achievement of a target -

growth in earnings per share

(ii) The details of the activity under Executive Share Option Scheme [Approved and (No.2) Scheme] are as follows:


Number of Weighted average Number of Weighted averageOptions exercise price (Rs) Options exercise price (Rs)

Outstanding at the beginning of the year 125,677 801 73,000 643

Granted during the year 92,200 942 95,377 911

Lapsed during the year 3,950 794 - -

Transferred during the year * 38,750 779 - -

Outstanding at the end of the year 217,877 865 168,377 800

Exercisable at the end of the year - - - -

* The options transferred represents options relating to employees transferred to other companies within the SABMiller Group during the year.

The weighted average share price at the date of exercise for stock options exercised during the year was Rs. 961 (previous year:

Rs. 881). The options outstanding as at 31 March 2008 had a weighted average remaining contractual life of 8.3 years (previousyear: 8.7 years).

44

45


The details of the activity under International Performance Share Award Sub-Scheme are as follows:


Number Weighted Number Weightedof Options average of Options average

exercise price exercise price

Outstanding at the beginning of the year - - - -

Granted during the year 7,000 - - -Outstanding at the end of the year 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. 961. The optionsoutstanding as at 31 March 2008 had a weighted average remaining contractual life of 9.3 years.

(iii) The weighted average fair value of stock options granted during the year is Rs. 283 (previous year: Rs. 234). The estimate of

fair value on the date of the grant was made using the Black-Scholes model with the following assumptions:



Share price at the grant date Rs. 961 Rs. 881

Exercise price at the grant date Rs. 942 Rs. 910Expected volatility 22.5% 22.5%

Contractual life (vesting and exercise period) in years 10 years 10 yearsExpected dividends 2.11% 2.11%

Average risk-free interest rate 4.48% 4.49%

The expected volatility was determined based on historical volatility by assessing the historic share price data in the United

Kingdom and South Africa since May 1999 and May 2001 respectively.

(iv) Since the Company used the intrinsic value method the impact on the reported net profit and earnings per share by applying

the fair value based method. The Guidance Note requires the Proforma disclosures of the impact of the fair value method ofaccounting 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.)



Net income as reported 344,777,187 401,891,802

Add: Employee stock compensation under intrinsic value method - -

Less: Employee stock compensation under fair value method 18,391,746 10,912,108

Proforma net income 326,385,441 390,979,694

Earnings per share as reported

- Basic 1.52 2.14- Diluted 1.49 2.13

Proforma earnings per share

- Basic 1.44 2.08- Diluted 1.41 2.07

18.18.18.18.18. The comparative figures have been regrouped/ reclassified, wherever necessary, to conform with the current year’spresentation.

for SKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries Limited

Jean-Marc Delpon de Vaux Jonathan Andrew KirbyManaging Director Director




47

(Rs.)



Cash flows from operating activitiesCash flows from operating activitiesCash flows from operating activitiesCash flows from operating activitiesCash flows from operating activitiesProfit / (Loss) before tax 408,545,685408,545,685408,545,685408,545,685408,545,685 453,375,648453,375,648453,375,648453,375,648453,375,648

Adjustments:Provision for impairment of fixed assets 117,306,243 (101,662,427)

Depreciation 858,090,043 625,247,195Interest expense 148,166,541 313,366,314

Interest income (52,435,809) (84,062,250)Loss/ (profit) on sale of fixed assets/ assets discarded (111,953,510) 17,028,530

Unrealised foreign exchange difference (36,484,812) -Operating cash flows before working capital changes 1,331,234,3811,331,234,3811,331,234,3811,331,234,3811,331,234,381 1,223,293,0101,223,293,0101,223,293,0101,223,293,0101,223,293,010

Increase in sundry debtors (1,051,637,153) (5,096,929)Increase in loans and advances (193,645,516) (321,708,500)

Increase in inventories (408,963,371) (235,213,089)Increase in current liabilities and provisions 1,032,704,887 1,186,712,169

Cash generated from operations 709,693,228 709,693,228 709,693,228 709,693,228 709,693,228 1,847,986,6611,847,986,6611,847,986,6611,847,986,6611,847,986,661Taxes paid (46,116,860) (70,489,732)

Net cash provided by operating activitiesNet cash provided by operating activitiesNet cash provided by operating activitiesNet cash provided by operating activitiesNet cash provided by operating activities aaaaa 663,576,368663,576,368663,576,368663,576,368663,576,368 1,777,496,9291,777,496,9291,777,496,9291,777,496,9291,777,496,929

Cash flows from investing activitiesCash flows from investing activitiesCash flows from investing activitiesCash flows from investing activitiesCash flows from investing activitiesPurchase of fixed assets (3,724,094,832) (3,655,242,114)

Proceeds from sale of fixed assets 179,174,811 5,263,942Inter-corporate deposits, net 117,947,601 1,151,723,818

Interest received 52,367,945 83,612,459Purchase of investments (9,181,175) -

Net cash used in investing activitiesNet cash used in investing activitiesNet cash used in investing activitiesNet cash used in investing activitiesNet cash used in investing activities bbbbb (3,383,785,650)3,383,785,650)3,383,785,650)3,383,785,650)3,383,785,650) (2,414,641,895)(2,414,641,895)(2,414,641,895)(2,414,641,895)(2,414,641,895)

Cash flows from financing activitiesCash flows from financing activitiesCash flows from financing activitiesCash flows from financing activitiesCash flows from financing activitiesProceeds from issue of shares - 1,348,499,040

Share application money received - 1,863,000,000Proceeds from borrowings 20,529,309,506 15,127,038,959

Repayment of borrowings (21,386,584,822) (13,599,646,487)Interest paid (160,223,816) (311,185,951)

Unclaimed dividend paid (740,705) (341,582)

Net cash (used in)/ provided by financing activitiesNet cash (used in)/ provided by financing activitiesNet cash (used in)/ provided by financing activitiesNet cash (used in)/ provided by financing activitiesNet cash (used in)/ provided by financing activities ccccc (1,018,239,837) (1,018,239,837) (1,018,239,837) (1,018,239,837) (1,018,239,837) 4,427,363,9794,427,363,9794,427,363,9794,427,363,9794,427,363,979Effect of exchange rate changes on cash and cash equivalents ddddd 2,237,371 -----

Net increase in cash and cash equivalentsNet increase in cash and cash equivalentsNet increase in cash and cash equivalentsNet increase in cash and cash equivalentsNet increase in cash and cash equivalents a+b+c+da+b+c+da+b+c+da+b+c+da+b+c+d (3,736,211,748) (3,736,211,748) (3,736,211,748) (3,736,211,748) (3,736,211,748) 3,790,219,0133,790,219,0133,790,219,0133,790,219,0133,790,219,013

Cash and cash equivalents at the beginning of the yearCash and cash equivalents at the beginning of the yearCash and cash equivalents at the beginning of the yearCash and cash equivalents at the beginning of the yearCash and cash equivalents at the beginning of the year 4,047,462,855 257,243,842

Cash and cash equivalents at the end of the yearCash and cash equivalents at the end of the yearCash and cash equivalents at the end of the yearCash and cash equivalents at the end of the yearCash and cash equivalents at the end of the year 311,251,107 4,047,462,855

Net increase in cash and cash equivalents*Net increase in cash and cash equivalents*Net increase in cash and cash equivalents*Net increase in cash and cash equivalents*Net increase in cash and cash equivalents* (3,736,211,748)(3,736,211,748)(3,736,211,748)(3,736,211,748)(3,736,211,748) 3,790,219,0133,790,219,0133,790,219,0133,790,219,0133,790,219,013

*Balance in deposit account include Rs. Nil (previous year: Rs. 651,824,262) held in an escrow account pursuant to a sharepurchase agreement and Rs. 11,864,657 (previous year: Rs. 11,551,147) in margin money account.

As per our report attached

for BSR & Co.BSR & Co.BSR & Co.BSR & Co.BSR & Co. for SKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries Limited


Zubin Shekary Jean-Marc Delpon de Vaux Jonathan Andrew KirbyPartner Managing Director DirectorMembership No. 48814


Bangalore Bangalore

23 June 2008 23 June 2008

Cash flow statement for the year ended 31 March 2008


BALANCE SHEET ABSTRACT AND COMPBALANCE SHEET ABSTRACT AND COMPBALANCE SHEET ABSTRACT AND COMPBALANCE SHEET ABSTRACT AND COMPBALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEANY’S GENERAL BUSINESS PROFILEANY’S GENERAL BUSINESS PROFILEANY’S GENERAL BUSINESS PROFILEANY’S GENERAL BUSINESS PROFILE

IIIII Registration DetailsRegistration DetailsRegistration DetailsRegistration DetailsRegistration Details

Registration No : 49687 State Code :11Balance Sheet Date: 31-Mar-08

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

Public Issue Rights Issue

Nil Nil

Bonus Issue Private Placement

Nil 186,300

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

Total Liabilities Total Assets

8,257,520 8,257,520

Sources of Funds

Paid - up Capital Reserves and Surplus

2,311,837 6,406,852

Secured Loans Unsecured Loans

0 3,774,422

Application of Funds

Net Fixed Assets Investments

8,742,088 11,359

Net Current Assets Misc Expenditure

854,541 Nil

Accumulated LossesNil

IVIVIVIVIV Performance of the Company (Amount In Rs Thousands)Performance of the Company (Amount In Rs Thousands)Performance of the Company (Amount In Rs Thousands)Performance of the Company (Amount In Rs Thousands)Performance of the Company (Amount In Rs Thousands)

Turnover Total Expenditure

10,584,976 10,458,198

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

408,545 344,777

Earnings Per Share in Rs Dividend Rate %

1.52 0

VVVVV Generic Names of Three Principal Products/ Services of the Company (as per monetary terms)Generic Names of Three Principal Products/ Services of the Company (as per monetary terms)Generic Names of Three Principal Products/ Services of the Company (as per monetary terms)Generic Names of Three Principal Products/ Services of the Company (as per monetary terms)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 LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries LimitedSKOL Breweries Limited

Jean-Marc Delpon de Vaux Jonathan Andrew KirbyManaging Director Director


Bangalore

23 June 2008

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

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PROXY FORMPROXY FORMPROXY FORMPROXY FORMPROXY FORM

I/We

of

being a Member(s) of the above named Company hereby appoint

of

(or failing whom)

of

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 atM.C. Ghia Hall, Bhogilal Hargovindas Building, 2nd Floor, 18/20, K. Dubash Marg, behind Prince of Wales Museum, Kala Ghoda,

Mumbai – 400 001 on Wednesday, the 10th September, 2008 at 3.00 p.m. and at any adjournment thereof.

Signed this day of

Signed by the said

N.B.: This Proxy form must reach the Registered Office of the Company not less than 48

hours before the time of holding the meeting.

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

SKOL BREWERIES LIMITEDSKOL BREWERIES LIMITEDSKOL BREWERIES LIMITEDSKOL BREWERIES LIMITEDSKOL BREWERIES LIMITEDRegd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093

AAAAATTENDANCE SLIPTTENDANCE SLIPTTENDANCE SLIPTTENDANCE SLIPTTENDANCE SLIP

Please complete this Attendance Slip and hand it over at the entrance of the Meeting Hall.


No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093

I hereby record my presence at the Annual General Meeting of the Company to be held at M.C. Ghia Hall, BhogilalHargovindas Building, 2nd Floor, 18/20, K. Dubash Marg, behind Prince of Wales Museum, Kala Ghoda, Mumbai – 400 001 on

Wednesday, the 10th September, 2008 at 3.00 p.m.

Member’s Name (in Block Capitals):

Share Ledger Folio No. :

DP ID No.

Client ID No.

Member’s/Proxy’s Signature:

SKOL BREWERIES LIMITEDSKOL BREWERIES LIMITEDSKOL BREWERIES LIMITEDSKOL BREWERIES LIMITEDSKOL BREWERIES LIMITED

Regd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093Regd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093Regd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093Regd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093Regd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093

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SKOL Breweries Limited1, Mahal Industrial Estate, Mahakali Caves Road, Andheri East, Mumbai - 400 093Maharashtra, India

Tel +91(0)22 - 67103890-93 Fax +91(0)22 - 67103894

www.sabmiller.in

SKOL Breweries Limited Annual Report 2008

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