SKOL Breweries Limited

Annual Report 2011-12
Our people are our enduring advantage

SKOL Breweries Limited Annual Report 2011-12

SKOL Breweries Limited is now SABMiller India Limited

We thought it pertinent to change the name to reflect the worldwide SABMiller identity in India. The change in name is effective from June 22, 2012. SABMiller is the second largest brewer in the world with more than 200 beer brands and some 70,000 employees in over 75 countries. We also have growing businesses in soft drinks and we are one of the world's largest bottlers of Coca-Cola products.

In recognition. transparent transaction and fair pricing. farmers can source government certified seeds and sell their crops in the Saanjhi Unnati Center.574 to over 8. Towards this end. The programme also promotes community development by offering extension workshops. customized support from agricultural specialists on proper irrigation. . Further. training. Since 2005. This programme is extended to farmers in Rajasthan and provides farmers with assured market for their crop. fertilizer usage and harvesting to enhance the quality of their crops. More than 5. The Programme has contributed significantly to improve farmers yield and income. Hence. farmers do not consider it a priority crop and do not invest in appropriate seeds and inputs to improve their yield.5 million tons of barley grown each year in India is feed grade and does not command a premium price. agronomical advice. The company also benefited as it could more than double the amount of barely procured from this programme as yields under the programme were much higher.000. Barley yields have grown by 20% to 25% and the farmers command preferential price which is 5% on an average higher than price paid by intermediaries and traders. The majority of 1. The Saanjhi Unnati Programme provides farmers with access to certified seeds. SKOL Breweries Limited launched Saanjhi Unnati Programme in 2005. the number of farmers who have registered as members of the programme has increased from 1.000 non-members have derived advantage of free agricultural advice and assistance provided by the centers and through vocational training camps for rural youth and animal health treatment camps. One such initiative has been to improve the life of farmers who supply our main raw material Barley. the Company has been responding to its business partners in various ways like Awareness Campaign on HIV / AIDs to Truck Drivers who transport millions of tonnes of raw materials and finished goods for the Company.SKOL Breweries Limited Annual Report 2011-12 Saanjhi Unnati Progress through Partnership SKOL Breweries Limited recognizes the role and contribution of its business partners in the growth of the Company.

Haryana Mysore Breweries. Paolo Lanzarotti . Karnataka Pals Distilleries.f. Samhita Warehousing Complex Gala No. Inner Ring Road Koramangala 01 .A First Rand Bank Limited REGISTRAR AND SHARE TRANSFER AGENT Sharepro Services (India) Pvt. Subramanian Mr.400072 BREWERIES Charminar Breweries. Ari Mervis Mr. Harald Harvey .R. Bldg No. Rajasthan Central Distilleries & Breweries.Chairman . 2nd Floor Solitaire Corporate Park 10 Chakala. Maharashtra Rochees Breweries. UP AUDIT COMMITTEE Mr.SKOL Breweries Limited Annual Report 2011-12 General Information BOARD OF DIRECTORS Mr.52 to 56. Aurangabad.Kurla Road.Chairman Mr.560022 BANKERS Standard Chartered Bank Royal Bank of Scotland Citi Bank N. Maharashtra Malabar Breweries. Puducherry SABMiller Breweries. 1021. Bangalore . Neemrana. AP Haryana Breweries. Kerala East Coast Breweries & Distilleries. Chalakudy. Paolo Lanzarotti Ms. Orissa SICA Breweries.e.400093 CORPORATE OFFICE Jalahalli Camp Road Yeshwanthpur. Cuttack. Sakinaka Mumbai .A Andheri (East) Mumbai . Bangalore. T. Sue Clark STATUTORY AUDITORS B S R & Co. Aurangabad. Ari Mervis Ms. Sonepat. Mathew Dunn REGISTERED OFFICE Unit No. Ltd.S. Harald Harvey Mr. Chartered Accountants Maruthi Info-Tech Centre 11-12/1. 13 A-B Near Sakinaka Telephone Exchange Andheri . 131 . Andheri Kurla Road Survey No.w. Medak. Mathew Dunn . Meerut. 8th Mar 2012 Mr.Managing Director Mr. Sue Clark Mr.

Mathew Dunn Director and Chairman Audit Committee 02 .SKOL Breweries Limited Annual Report 2011-12 DIRECTORS Mr. Sue Clark Director and Member Audit Committee Mr. Ari Mervis Director and Member Audit Committee Mr. T S R Subramanian Director Mr. Paolo Lanzarotti Managing Director and Member Audit Committee Mr. Harald Harvey Chairman and Member Audit Committee Ms.

SKOL Breweries Limited Annual Report 2011-12 Company & Group Profile 03 .

has put these brands on a steep growth path. SKOL Breweries Limited plans to continue to work on creating a national footprint for its brands (both in terms of quality and content) by modernizing and improving efficiencies of plants. London. Royal Challenge. 04 .SKOL Breweries Limited Annual Report 2011-12 Company and Group Profile SKOL Breweries Limited SKOL Breweries Limited is the main operating entity in India of SABMiller Group. With 10 high quality breweries located strategically across 9 States in India. SABMiller started it's journey in India in the year 2000 and in just a few years. Hayward's 5000. the ultimate holding company holds indirectly 99. SABMiller plc. introducing new technologies. Indus Pride and Miller HighLife under its portfolio. SKOL Breweries Limited is well placed to service the markets quickly and efficiently with a dedicated workforce of over 3. improving brand performance in the key beer markets and make forays into newer territories. A careful brand renovation programme.500 people. backed by highly proactive marketing support.26% equity in SKOL Breweries Limited. Knock Out. it has grown to corner 23% of the Indian beer market with brands such as Foster's.

SABMiller is also the world's largest bottlers of Coca-Cola products. Aguila (Colombia). Castle (Africa). 139 breweries. including international premium brands such as Grolsch.000 employees. 05 . Miller Genuine Draft. Miller Lite (USA). It owns more than 200 brands. 239 million hectoliters of beer and about 70. SABMiller plc is listed on the London and Johannesburg stock exchanges.760 million.SKOL Breweries Limited Annual Report 2011-12 Company and Group Profile SABMiller plc SABMiller plc is the second largest brewer with brewing interests and distribution agreements across six continents. Its reach extends to 6 continents. Snow (China) and Tyskie (Poland). The group's revenue in the financial year ending March 2012 was US $21. Peroni Nastro Azzurro and Pilsner Urquell and leading regional brands such as Haywards 5000 (India).

SKOL Breweries Limited Annual Report 2011-12 Vision and Mission Our Vision To be among the 3 most admired beverage companies in India Our Mission To own and nurture local and international brands that are the first choice of the consumer Our Values and Group behaviours Our people are our enduring advantage Accountability is clear and personal We work and win in teams We understand and respect our customers and consumers Our reputation is indivisible 06 .

SKOL Breweries Limited Annual Report 2011-12 Our Brands The year was marked by innovation which delighted consumers 07 .

log on to www.Party hard 'Work hard as much as enjoy work One should having fun one enjoys Be good to yourself. each insanely refr d culture ng crispy an the American Besides bei u a taste of fe gives yo ' Miller High Li .SKOL Breweries Limited Annual Report 2011-12 Now you can enjoy Miller in India SABMiller brings "Miller HighLife" premium award winning American Style beer from USA which was introduced in 1903 drop of eshing. To make an informed choice about alcohol.com 08 .talkingalcohol. drink responsibly.

Selected hops and the best quality barley which is subjected to a long brewing process gives the consumer a silky smooth drinking experience Long brew with carefully selected barley in Royal Challenge. log on to www.talkingalcohol.com 09 . To make an informed choice about alcohol.SKOL Breweries Limited Annual Report 2011-12 Mild or Strong goes down smooth and easy Royal Challenge Strong is the newest addition in our Portfolio. a Premium Lager gives the consumer that distinct and smooth taste Be good to yourself. drink responsibly.

It is for those men with the strength of character Har Kadam Hausla Buland The brand saw an anthem befitting the discerning consumers of this brand launched during the year. The Anthem "Har Kadam Hausla Buland" was penned by great lyricist Javed Akhtar and renowned singer Kailash Kher lent his voice.com 10 . Be good to yourself. log on to www.SKOL Breweries Limited Annual Report 2011-12 Haywards 5000 was the first strong beer which other beer brands copied. drink responsibly. To make an informed choice about alcohol.talkingalcohol. The Anthem represents true stories of grit and resolve of common men across India collected through Hausla Rath which travelled across 59 cities / towns.

log on to www.SKOL Breweries Limited Annual Report 2011-12 Knock Out .com 11 . To make an informed choice about alcohol. first of its kind in India enables customers to differentiate between warm and cold beer Be good to yourself.talkingalcohol.the ever refreshing strong beer is now in a new avatar true to its refreshing taste The thermo chromatic label. drink responsibly.

drink responsibly. To make an informed choice about alcohol.talkingalcohol.com 12 .SKOL Breweries Limited Annual Report 2011-12 The Art of Chilling has more options now. log on to www. Foster's fans can now enjoy this uniquely Australian beer in strong and draught form yeah ! its strong and mild Be good to yourself.

SKOL Breweries Limited Annual Report 2011-12 Managing Director's Statement 13 .

2% and Royal Challenge declined by 29% due to lower off take in AP & UP. Hayward's volume dropped marginally by 0.Miller HighLife which saw good acceptance from the markets it was launched in. I am also happy to share that some of our strategies have proved successful in attracting new consumers and thereby contributing to increase in sales. Andhra Pradesh Government's revision of sourcing policy based on consumer preference added to the increase. The year that was The year 2011-12 was both challenging and encouraging and I am happy to state that we have come through it well. The label will change colour when the beer reaches the optimum temperature for a great drinking experience. During the year under review. At the outset.SKOL Breweries Limited Annual Report 2011-12 Managing Director's Statement Dear Shareholders. I am delighted to inform you that the name of your company has now been changed to SABMiller India Limited. your Company's brands have performed reasonably well. the strategy to launch beer in PET bottles is finding favour with consumers and is showing increasing sales trend. Several internal and external factors have contributed to higher sales revenues vis-à-vis the previous year. Fosters Strong and Royal Challenge Strong were launched and the same have been received well by the consumers and trade. Thermo chromatic labels for the Knock Out brand. Your Company launched an international premium brand . as well as enabling consumers to confirm that the beer he is buying is cold. We expect good growth in this area as we extend the geographical distribution of this pack. However. 14 . Knock Out and Foster's witnessed growth of 17% and 5% respectively in volumes. Your company also launched a first of its kind innovation. While the industry growth and supply constraint liberalization in few States helped us in garnering higher value share. Considering that the Beer industry grew only at about 5% during the year under review. I extend hearty greetings to you and present the Annual Report for the year 2011-12. Further.

Water usage stood at 4. As a responsible corporate and as a mark of giving back to the community. Rajasthan and projects are underway at other locations.66 HL / HL while energy usage was at 202. We have also successfully implemented many cost saving initiatives including changes in production technology and optimization of brewing processes in the aftermath of increased raw material cost. Our initiatives on awareness on HIV / AIDS expanded to many States since its launch in 2008 with particular focus on truckers who are a part of our supply chain service providers. Further we have also partnered with retail outlets to provide a safe trip home by tying up with agencies providing drivers and with cab services. We continued to see improvement in our water usage and energy consumption levels. Water conservation and Sustainable Development Your company continues to lay emphasis on sustainable development in line with our Group's "Ten Priorities.5 MJ / HL. We have successfully driven home the message of Responsible Drinking by organizing effective communication and innovative schemes in association with public authorities in a number of States. These initiatives along with introduction of our proprietary bottle have contributed to substantial reduction in operating cost.3 MJ / HL against Group's global standard of 204.SKOL Breweries Limited Annual Report 2011-12 Managing Director's Statement continued recharge is done by constructing Water structure for farmers in Chomu.4 HL / HL against Group's global standard of 4. 15 . we have contributed to the enhancing of ground water in the areas we operate. One Future" programme.

Going forward our performance continues to depend on many external factors. The Central Government has chosen to keep the potable alcohol industry out of the GST in the 115th Constitution Amendment Bill. our Business Partners. We have made several representations to the Government and we continue with our efforts to inform the Government of the negative impact of GST on the industry. Cheers! Paolo Lanzarotti Future We are increasingly focused on driving initiatives in areas where we can directly influence our own destiny. Exclusion of our industry will severely impact our performance on account of double taxation as we would be denied credit of taxes which we are genuinely entitled to. Employees. 16 .SKOL Breweries Limited Annual Report 2011-12 Managing Director's Statement continued Area of focus I take this opportunity to convey my concern in the GST arena specifically with respect to its treatment towards potable alcohol industry. Government Authorities and the Shareholders for their support and look forward to their continued partnership in our journey ahead. I take this opportunity to thank my colleagues on the Board. Financiers.

Harald Graham Harvey as Director of the Company. 6. who was appointed as an Additional Director of the Company by the Board in terms of Section 260 of the Companies Act.00 p. To consider appointment of Mr. BY ORDER OF THE BOARD Sridhar S Company Secretary Place: Bangalore RESOLVED THAT pursuant to Section 293(1)(d) of the Companies Act. who retire at the conclusion of this Annual General Meeting be and are hereby appointed as Statutory Auditors of the Company till the conclusion of next Annual General Meeting at a remuneration to be fixed by the Board of Directors and billed progressively. JVPD Road. To consider and if thought fit. who retires by rotation at this meeting and being eligible. of the said Act. already borrowed by the Company (apart from the temporary loans obtained from the Company's bankers in the ordinary course of business) may exceed in the aggregate the paidup capital of the Company and its free reserves which have not been set apart for any specific purpose but so that the total amount upto which the moneys may be so borrowed shall not at any time exceed Rs. To consider and if thought fit. RESOLVED THAT M / s. stores and spare parts and components in stock or in transit) work-inprogress and debts and advances notwithstanding that the sum or sums so borrowed together with the moneys. To consider increase in Borrowing Powers. Mumbai 400 056 on Wednesday. To receive. T S R Subramanian. To appoint Auditors for the period commencing from the conclusion of 23rd Annual General Meeting till the conclusion of next Annual General Meeting and fix their remuneration. to pass. 2. with or without modification(s). offers himself for re-appointment. 4. bills. charge. 2. Harald Graham Harvey. To appoint a Director in place of Mr. consider and adopt the Audited Balance Sheet as at 31st March. if any. raw materials. who holds office till the date of this Annual General Meeting. be and is hereby appointed a Director of the Company liable to retire by rotation. the following Resolution as a Special Resolution: deposits or other loans whether secured or unsecured by mortgage. 2012 at 4. Chartered Accountants (ICAI firm registration number 101248W). 3. Vile Parle (W). if any. consent be and is hereby accorded to the Board of Directors of the Company for borrowing any sum or sums of money from time to time from one or more persons. 2012 and the Statement of Profit & Loss for the year ended on that date and the Report of the Directors and Auditors thereon. 1956 and other enabling and applicable provisions.SKOL Breweries Limited Annual Report 2011-12 Notice to Members NOTICE is hereby given that the 23rd Annual General Meeting of the members of the Company will be held at Juhu Jagruthi Seminar Hall. Special Business 5. firms. To appoint a Director in place of Mr.. banks. B S R & Co. offers himself for reappointment. financial institutions or from others by way of cash credit. 2012 17 . to transact the following business: Ordinary Business 1. Mithibai College. advances.500 Crores. 1st Floor. the 29th August. with or without modification(s) the following resolution as an Ordinary Resolution: RESOLVED THAT Mr. Mathew James Dunn. Date: 15th May. and in respect of whom a notice has been received from a member under Section 257 of the said Act.m. who retires by rotation at this meeting and being eligible. body corporates. to pass. lien or pledge of the Company's assets and properties whether movable and/or immovable or stock-in-trade (including book debts. hypothecation. 1956.

A Communiqué is attached at the end of this Annual Report on the procedure to be followed for registering your email ID. Africa & Global Senior Partner. Keeping in view the Company's business requirements and its investment and growth plans. Proxies in order to be effective must be deposited at the registered office of the Company not less than forty-eight hours before the meeting.13 A-B. nomination etc. The Shareholders are requested to communicate their email IDs to which the communication can be sent.SKOL Breweries Limited Annual Report 2011-12 Notice to Members continued NOTES 1.400 072. Sakinaka. A proxy need not be a member of the Company. 1956. 1956.6 for such increase in limits. Explanatory Statement pursuant to Section 173(2) of the Companies Act. Gala No. All queries relating to non-receipt of share certificates after transfer/ transmission/dematerialization/ rematerialization. Members are also requested to bring their copies of the Annual Report to the venue of the Meeting. Harvey has been responsible for corporate strategy.. Prior to joining us. Near Sakinaka Telephone Exchange. Bldg No. Tel:02267720300 / 67720400 Fax No: 02228591568/28508927. the Company proposes to give option to its Shareholders to receive notices and Annual Report in electronic mode. A blank proxy form is enclosed. the Members empowered the Board of Directors under Section 293(1)(d) of the Companies Act. Members are requested to affix their signature at the space provided therefore and hand over the same at the place of Meeting.6 At the Annual General Meeting of the Company held on 15th September. may be sent to the Registrar & Share Transfer Agents. None of the directors are either directly or indirectly concerned or interested in the said Resolution. as well as legal services and compliance. 2009. 18 . he worked with The Monitor Group as Managing Director. 3. Samhita Warehousing Complex. For convenience of members an attendance slip is also annexed. with a view to support this green initiative of the MCA.2. Mr. In terms of the provisions of Section 293(1)(d) of the Companies Act. The Ministry of Corporate Affairs (MCA) has permitted Companies to issue Notices of General Meetings and Annual Report to the Shareholders through electronic mode via emails and publish on the Websites of the Company. Item No. 2. change of address. it is considered desirable to increase the said borrowing limits to Rs. Sharepro Services (India) Pvt. Ltd. Accordingly.000 Crores. mandates. approval of the members is sought through the resolution under item no. Item No. Andheri-Kurla.500 Crores as outlined in the resolution. E-mail: sharepro@shareproservices.52 to 56. 1956 to borrow monies for the business purposes of the Company upto a limit of Rs. Resolution is commended for the consent of the shareholders. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on a poll in his/her stead. Since joining SABMiller in 2009. None of the directors are either directly or indirectly concerned or interested in the said Resolution. Harald Graham Harvey is holding a degree of Bachelor of Social Science (Honours) in Sociology. Mumbai . The Proxy of a member should mark on the attendance slip as Proxy. Road.com 4. pricing and revenue management. Resolution is commended for the consent of the shareholder. 2. 5 Mr.

SKOL Breweries Limited Annual Report 2011-12 Directors' Report 19 11 .

Your Company also introduced beer in convenient packs of 250 ml. Increase in volume is mainly contributed by increasing market share in Andhra Pradesh. 2. Your company has introduced many innovations and variants during the year under review and has expanded its portfolio.86 (60.15 (119.SKOL Breweries Limited Annual Report 2011-12 Directors' Report Dear Members.14) brands and variants have shown encouraging trends in the markets they have been introduced.487. Miller HighLife.26) 0. leveraging of industry growth in Rajasthan and Karnataka. 205 Crores of demerged beer business of SABMiller Breweries Private Limited) from Rs. All these Demerger of Beer business of SABMiller Breweries Private Limited into your Company During the year under review.22) (60.41) Financial Year 2010-11 2.987 Crores (includes Rs. The capacity of the company has been augmented by entering into contract packing arrangements in the States of Orissa and Punjab. Your Board enjoys the unqualified support of all its financiers whose confidence in the future of your company is evidenced by the fact that all borrowings have been made without the bankers taking any charges over your company's assets and are used for both short term and long term purposes. Your Directors have pleasure in presenting their 23rd Report and the Statement of accounts for the year ended 31st March 2012. Efforts by other brewers to use the bottles introduced by the company have been successfully defended. There is a thrust on reduction in operating expenses by stringent controls and monitoring.36) (0.987.487 Crores in the previous year. the current year figures are not comparable with the previous year. Due to rising interest cost and utilisation of short-term funds towards long-term purposes. Financial Results (Rupees in Crores) Financial Year 2011-12 Gross Revenue Profit/(Loss) before taxation Less: Provision for taxation Profit/(Loss) after taxation 2. 2. your company is evaluating various options of recapitalising the business. innovation led growth in Maharashtra and also the addition of sales of SABMiller Breweries Private Limited whose Brewery business was demerged and transferred to your company. In this annual report. Fosters Strong and Royal Challenge Strong beers have been launched. The introduction of proprietary bottle has also paid rich dividend and the company is able to obtain return of its bottles at competitive rates. The turnover increased by 20% to Rs. higher actuarial valuation of leave salary and gratuity and absorption of loss incurred by brewing business of SABMiller Breweries Private Limited.07 (119. in view of demerger of beer business of SABMiller Breweries Private Limited into your company during the current year Operations The revenue of your Company during the year 2011-12 has significantly improved. a company of SABMiller Group has been demerged into your Company vide the Order passed by the Hon'ble High Court of 20 . Cash losses for the year are mainly due to high interest cost on working capital to meet higher sales volume and borrowings for capital expenditure. the beer business of SABMiller Breweries Private Limited. unplanned maintenance work in breweries.

the Directors do not recommend any dividend on the equity capital. the beer business of SABMiller Breweries Private Limited which inter alia includes all the assets and liabilities. Sustainable Development and Corporate Social Responsibility As a part of "Ten Priorities One Future" sustainable development programme of the SABMiller Group. "Respect the Road" campaign was launched in Gurgaon to address increase in cases of drunken driving in partnership with Gurgaon Traffic Police. Special messaging around festivals such as Holi and New Year were carried out. all licences and permits of the beer business stand transferred to your Company. Material changes subsequent to financial year end There are no material changes since the financial year end which would affect the financial position of the company.SKOL Breweries Limited Annual Report 2011-12 Directors' Report continued Bombay on 29th March 2012 sanctioning the Scheme of Arrangement. all the breweries of the SABMiller Group in India are now under the control of your company. 21 . your company initiated a number of awareness programmes and partnerships with community stakeholders across the country. your company continued with many corporate social responsibility initiatives during the year under review. Consequent to the demerger. Campaign on Responsible Drinking To promote responsible consumption. Phase two of the mass communication campaign on responsible drinking in Puducherry in partnership with a local NGO (SONIC) was launched in October. Dividend As the Company has incurred loss during the year. employees. Accordingly.

Barley Development Your company's attempt at improving the quality of its barley procurement and simultaneously raising the quality of farmers has shown good result. which includes high risk stakeholders as being truck drivers who transport tonnes of raw materials and our products to the market. The ground water management initiative of your company in Neemrana. Puducherry. Farmers are also provided information on proper irrigation. Rajasthan has led to rise of water to approximately 24 feet around three ground water recharge structure. Water Projects Your company continued with its initiatives for conservation of water and in this direction Water 22 . We believe that our programmes have benefited many truckers and their families.000 cubic meter extracted in 2010. fertilizer usage and harvesting. agronomical advice and training to enhance the quality of the crops. AIDS Awareness Programme under the banner "Humsafar" launched in 2008 in Rajasthan particularly targeting the truck drivers is continued with vigour and now stands extended to many more breweries including Karnataka.SKOL Breweries Limited Annual Report 2011-12 Directors' Report continued assessment for six breweries has been carried out and Water structure has been constructed in Chomu in Jaipur District of Rajasthan. Company's interventions are targeted towards key stakeholders. The Company understands that awareness is crucial for HIV / AIDS control. Further. your company initiated steps with farmers to provide them access to good quality seeds. your company's said initiatives recharged the entire amount of ground water of 30. Haryana and Andhra Pradesh. Contributing to reduction of HIV / AIDS The Company is working towards the reduction of HIV / AIDS through various initiatives targeting different sections of society. Truck Drivers have shown keen interest in knowing the consequences of person afflicted with HIV and how to avoid such a situation. With a view to securing good quality barley.

Your Directors recommend their appointment at the ensuing Annual General Meeting. Foreign Exchange Earnings and Outgo The Statement pursuant to Section 217 (1) (e) of the Companies Act. The financial statements have been prepared on the basis of "Going Concern" considering the ability of the Company to carry on its business in the foreseeable future. Services of the employees were immediately terminated. two employees misappropriated funds of the company. 1988 to the extent applicable are set out in the annexure hereto. Mr. retiring Auditors. 3. Auditors M/s B S R & Co. Mr. offer themselves for reappointment. Better yield coupled with preferential price translate into real income hike for farmers. Harald Harvey. Mathew Dunn is the Chairman of the Committee. 2. 1956 and the rules framed there under. The internal controls are operating effectively. 1956 Your Directors state that: 1. Mathew Dunn. that their reappointment. Mr. During the year. The programme has improved barley yield by 20% to 25% and better price realization to farmers as they sell directly to your company avoiding the intermediaries. Mr. 1975. principles and applicable accounting standards in India.630. 4.. Mathew James Dunn and Mr. They have confirmed Directors' Responsibility Statement under Section 217(2AA) of the Companies Act. With internal controls in place this was detected at an early stage and financial loss was restricted to Rs. will be within the limits prescribed under Section 224(1B) of the Companies Act. Conservation of Energy. Paolo Lanzarotti. The financial statements have been prepared in conformity with the generally accepted accounting 23 . Directors of the Company retire by rotation at this Annual General Meeting and being eligible. 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules.35. During the year Mr. whose term of office expires at this Annual General Meeting and is eligible for re-appointment. transparent transactions and fair pricing. 1956 the Audit Committee has been reconstituted. T S R Subramanian. The present members of the Committee are Mr. Public Deposit During the year. if made. Ari Mervis. Audit Committee Pursuant to the provisions of Section 292A of the Companies Act. the Company has not accepted any public deposits as defined in the Companies (Acceptance of Deposits) Rules. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. Sue Clark and Mr. The Directors have selected such accounting policies as are applicable and have applied them consistently and made reasonable and prudent judgment and estimates so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss for the year. Technology Absorption. as amended to date are enclosed as an Annexure to the Report. 1956. Particulars of Employees The details of employees covered under the provisions of Section 217 (2A) of the Companies Act.7. Chartered Accountants.SKOL Breweries Limited Annual Report 2011-12 Directors' Report continued Such steps enabled farmers to have assured market for their product. Directors In accordance with the Articles of Association. Ms. have signified their willingness to be reappointed as Statutory Auditors of the Company. Harald Graham Harvey was appointed as an Additional Director of the Company.

FOR AND ON BEHALF OF THE BOARD Harald Harvey Paolo Lanzarotti Place: Bangalore Date: 15th May.54 Crores was incurred in foreign exchange. FOR AND ON BEHALF OF THE BOARD Harald Harvey Paolo Lanzarotti Disclosure as per the Companies (Disclosure of Particulars in the Report of Directors) Rules. 3. costs. A significant part of energy savings is due to such improved operation practices. C. 1988 A. B. The company has a robust energy management practice that involves: 1. 5. Four of our operation personnel have been certified as accredited Energy Auditors / Energy Managers from the Bureau of Energy Efficiency to drive continuous improvement in energy utilization in breweries. Conservation of Energy Energy efficiency in breweries is achieved through a process of continuous improvement.03 Crores in foreign exchange. Routine reviews of investments for energy improvements initiatives. existing practices and people capabilities. Foreign Exchange Earnings and Outgo During the year. Such investments are made at appropriate times after a thorough review of benefits. For example Variable Speed Drives on refrigeration equipment. the Company has earned Rs. 2012 24 . Shareholders. Energy collaboration forum started to share knowledge and implement cross brewery best-in-class practices very quickly. Customers and Suppliers. 4.32. An amount of Rs.SKOL Breweries Limited Annual Report 2011-12 Directors' Report continued Acknowledgement Your Directors wish to place on record their appreciation for contribution made by employees at all levels. We continue to invest in our people. Manufacturing way (Mway) introduced in most of the breweries in India. The Company continues to identify opportunities through benchmarking globally against breweries of the SABMiller group. Extensive benchmarking against global standards across SABMiller group. resizing of the Boilers are done on a continuous basis. The Directors would also like to acknowledge the continued support extended by Bankers. Mway is a global SABMiller practice that targets systematic improvement of operation efficiencies through practices like Teamwork and Asset care. 2012 Place: Bangalore Date: 15th May. 2. Technology Absorption The company has not made any purchases of technology or made payments towards transfer of technology during the year under review.64. Distributors.

SKOL Breweries Limited Annual Report 2011-12 Annual Financial Statements 25 .

SKOL Breweries Limited Annual Report 2011-12 Auditors' Report To the Members of SKOL Breweries Limited We have audited the attached balance sheet of SKOL Breweries Limited ("the Company") as at 31 March 2012. we report that none of the directors is disqualified as on 31 March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act. and taken on record by the Board of Directors. (v) on the basis of written representations received from the directors of the Company as on 31 March 2012. Further to our comments in the Annexure referred to above. in the case of the statement of profit and loss. ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act. in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: a. the said accounts give the information required by the Companies Act. as well as evaluating the overall financial statement presentation. the statement of profit and loss and the cash flow statement for the year ended on that date annexed thereto. 2003. An audit also includes assessing the accounting principles used and significant estimates made by management. 1956. the statement of profit and loss and the cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. as amended. evidence supporting the amounts and disclosures in the financial statements. As required by the Companies (Auditor's Report) Order. We believe that our audit provides a reasonable basis for our opinion. proper books of account as required by law have been kept by the Company so far as appears from our examination of those books. 1956. (iii) the balance sheet. of the state of affairs of the Company as at 31 March 2012. b. Firm registration number: 101248W Chartered Accountants Zubin Shekary Partner Membership No. in the case of the balance sheet. the balance sheet. (iv) in our opinion. These financial statements are the responsibility of the Company's management. (ii) in our opinion. and c. Our responsibility is to express an opinion on these financial statements based on our audit. in the case of the cash flow statement. of the loss of the Company for the year ended on that date. 1956. 48814 Bangalore Date: 15 May 2012 26 . we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. we report that: (i) we have obtained all the information and explanations. for B S R & Co. (vi) In our opinion and to the best of our information and according to the explanations given to us. An audit includes examining. on a test basis. of the cash flows of the Company for the year ended on that date. the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account. 1956. We conducted our audit in accordance with auditing standards generally accepted in India. which to the best of our knowledge and belief were necessary for the purpose of our audit.

the transactions made in pursuance of contracts and arrangements referred to above and exceeding the value of Rs. 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. iii. No material discrepancies were noticed on such verification. We report that: i. The Company has neither granted nor taken any loans. 1956 have been entered in the register required to be maintained under that section. including quantitative details and situation of fixed assets. viii. Sales Tax/ Value Added Tax. The Company has not accepted any deposits from public. and therefore. written confirmations have been obtained. the particulars of contracts or arrangements referred to in Section 301 of the Companies Act. vii. For stocks lying with third parties at the year-end. the prescribed accounts and records have been made and maintained. (a) The Company has maintained proper records showing full par ticulars. to or from companies. Cess and other material statutory dues have 27 . (b) In our opinion and according to the information and explanations given to us. has been physically verified by the management during the year. iv. (c) Fixed assets disposed off during the year were not substantial. except for goodsin-transit and stock lying with third parties. In our opinion and according to the information and explanations given to us. amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund. the Company has an internal audit system commensurate with its size and nature of its business.SKOL Breweries Limited Annual Report 2011-12 Auditors' Report continued Annexure to the Auditors' report Annexure referred to in the Auditors' Report to the Members of SKOL Breweries Limited ("the Company") for the year ended 31 March 2012. we have not made a detailed examination of the records. there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods. (c) The Company is maintaining proper records of inventory. ii. 1956. Service Tax. Customs Duty. (b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified over a period of three years. Wealth Tax. ix. v.1956 and are of the opinion that prima facie. However. firms or other parties covered in the register maintained under section 301 of the Companies Act. (a) In our opinion and according to the information and explanations given to us. In our opinion. Employees' State Insurance. The discrepancies noticed on verification between the physical stocks and the book records were not material. do not affect the going concern assumption. vi. Income-tax. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company. this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. (b) The procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. the frequency of such verification is reasonable. In our opinion. We have not observed any major weakness in the internal control system during the course of the audit. (a) The inventory. We have broadly reviewed the books of accounts maintained by the Company pursuant to rules prescribed by the Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act. In our opinion. secured or unsecured. Excise Duty.

89 10. Excise Duty. As explained to us. (b) According to the information and explanations given to us. Haryana Orissa High Court Punjab Excise Act.222.SKOL Breweries Limited Annual Report 2011-12 Auditors' Report continued generally been regularly deposited during the year by the Company with the appropriate authorities though there has been a slight delay in a few cases. Customs Duty and Excise Duty have not been deposited by the Company on account of disputes. Service Tax.245. 1914 Duty on beer loss 11.028 1.930 1983-84 to 1988-89 Bombay High Court 1.231 2001-02 to 2004-05 2002 -03 2005-06 Orissa High Court Orissa High Court Orissa High Court Bombay Prohibition Act. Employees' State Insurance. Name of the Statute Nature of the Dues Amount (Rs. Wealth Tax.037.005.085 2000-01 Commissioner of State Excise. Customs Duty. Service Tax. Karnataka Karnataka Excise Act. There are no dues on account of Cess under section 441A of the Companies Act. 1965 Overtime wages of excise staff 3. According to the information and explanations given to us. 1949 Supervision charges of excise staff Duty on expired beer 550.705 1988 .936 327. there are no undisputed amounts payable in respect of Provident Fund.284. the Company did not have any dues on account of Investor Education and Protection Fund. 1965 Interest on excise loan draw back scheme Adhesive label fees Duty on sediment beer Overtime wages of excise staff 3. Cess and other material statutory dues which were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable. Sales Tax/ Value Added Tax.) Period to which the amount relates 1974-75 to 1990-91 Forum where dispute is pending Financial Commissioner. Income-tax. there are no dues of Wealth Tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. 1956 since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.062 1998-99 to 2004-05 28 .877.236 Orissa and Bihar Excise Act. The following dues of Income-tax. Sales Tax/ Value Added Tax. Maharashtra Commissioner of State Excise.

1999 Delhi Sales Tax Act. Maharashtra Sales Tax Tribunal. 1959 Sales Tax 1. 1975 Taxes on bottle deposit Sales Tax 217.200.922 2002-03 Joint Commissioner (Appeals).537 1996-97 Bombay Sales Tax Act.943 1992-93 Sales Tax 4. Orissa Sales Tax Tribunal. Department of Trade & Taxes.508 2000-01 Sales Tax 576.060 2008-09 Sales Tax 1.495 2001-02 Sales Tax 8.984.154 1995-96 Sales Tax 1. 1956 Sales Tax 12.) Period to which the amount relates April 2005 to March 2011 1994-95 to 2000-01 Forum where dispute is pending Karnataka High Court Karnataka VAT Act.050.024 Sales Tax Tribunal. Maharashtra Sales Tax 242. New Delhi Appellate Tribunal.913 2007-08 Bombay Sales Tax Act.139. Mumbai Sales Tax 4.154. Maharashtra Sales Tax Tribunal.445.433. New Delhi Additional Commissioner-II. Mumbai Joint Commissioner (Appeals). 1959 & Central Sales Tax Act.514. Maharashtra Sales Tax Tribunal.486 2002-03 Sales Tax 217. Orissa Assistant Commissioner of Commercial Taxes (Appeals).290 2002-03 29 .317. 2003 Orissa Sales Tax Act. 1947 Orissa Entry Tax Act. Maharashtra Additional Commissioner (Appeals).SKOL Breweries Limited Annual Report 2011-12 Auditors' Report continued Name of the Statute Nature of the Dues Amount (Rs.029.152 35.

SKOL Breweries Limited Annual Report 2011-12

Auditors' Report continued
Name of the Statute Nature of the Dues Amount (Rs.) Period to which the amount relates 1991-92 to 1992-93 Forum where dispute is pending Andhra Pradesh High Court Andhra Pradesh General Sales Tax Act, 1957 Pondicherry General Sales Act, 1967 Haryana Sales Tax Act, 1973 Kerala Sales Tax Act Sales Tax 3,675,677

Sales Tax

11,982,000

1981-82 to 1984-85, 1997-98 to 1998-99 1989-90 to 1996-97, 1998-99 to 2003-04 2005-06 to 2007-08

Assessing Authority, Pondicherry Sales Tax Tribunal, Haryana Sales Tax Tribunal, Kerala Supreme Court

Sales Tax

754,349

Penalty

221,634

Uttar Pradesh Tax on Entry of Goods Act, 2000 Haryana Local Area Development Tax Act, 2000 Finance Act, 1994

Entry Tax

14,114,578

2003-04 to 2011-12

Local Area Development Tax

10,050,426

2000-01 to 2003-04

Chandigarh High Court

Service Tax and penalty

32,129,640

2006-07 to 2007-08

Customs Excise and Service Tax Appellate Tribunal, Mumbai Customs Excise and Service Tax Appellate Tribunal, Mumbai Customs Excise and Service Tax Appellate Tribunal, Mumbai Commissioner of Income tax (Appeals) Income Tax Appellate Tribunal, Mumbai

Service Tax and penalty

34,795,634

April 2008 to March 2010

Customs Act, 1962

Customs Duty

261,555

2007-08

Income-tax Act, 1961

Fringe benefit tax

53,308,341

2006-07

Income-tax

60,253,760

2007-08

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

30

SKOL Breweries Limited Annual Report 2011-12

Auditors' Report continued
x. The Company has accumulated losses amounting to Rs.4,914,138,056 at the end of the financial year which is more than fifty per cent of its net worth. The Company has incurred cash losses in the current financial year. No cash losses were incurred in the immediately preceding financial year. xi. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institutions or debenture holders during the year. xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. xvi. In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised. xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that funds raised on short-term basis amounting to Rs. 5,439,955,901 have been used for long-term purposes. xviii. The Company has not made any preferential allotment of shares to companies/ firms/ parties covered in the register maintained under Section 301 of the Companies Act, 1956. xix. The Company did not have any outstanding debentures during the year. xx. The Company has not raised any money by public issues during the year. xxi. According to the information and explanations given to us, two employees misappropriated scheme disbursements amounting to Rs. 735,630. Services of the employees have since been terminated. According to the information and explanations given to us, no other fraud on or by the Company has been noticed or reported during the course of our audit. for B S R & Co. Firm registration number: 101248W Chartered Accountants Zubin Shekary Partner Membership No. 48814 Bangalore Date: 15 May 2012

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. xiv. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

31

SKOL Breweries Limited Annual Report 2011-12

Balance Sheet
Rs. Note EQUITY AND LIABILITIES
Shareholders' funds Share capital Shares pending allotment to the shareholders of the Transferor company Reserves and surplus Non-current liabilities Long-term borrowings Long-term provisions Other long term liabilities Current liabilities Short-term borrowings Trade payables Other current liabilities Short-term provisions 2.1 2.23 2.2 2,311,837,450 72,419,910 1,415,155,878 3,799,413,238 2,346,223,893 481,508,090 8,349,563 2,836,081,546 8,545,818,645 1,966,338,378 3,506,607,600 33,919,456 14,052,684,079 2,311,837,450 2,276,922,775 4,588,760,225 1,821,580,950 472,658,732 21,008,568 2,315,248,250 7,682,377,290 1,643,966,807 2,351,725,628 27,093,475 11,705,163,200

As at 31 March 2012

As at 31 March 2011

2.3 2.4 2.5

2.6 2.7 2.8 2.9

20,688,178,863 ASSETS
Non-current assets Fixed assets Tangible assets Intangible assets Capital work-in-progress

18,609,171,675

2.10 2.10

8,510,354,658 2,407,873,120 371,316,219 11,289,543,997 11,489,057 774,417,631 12,075,450,685 2,742,344,715 4,652,810,767 178,924,814 1,038,647,882 8,612,728,178

8,480,202,138 2,574,859,380 158,768,000 11,213,829,518 11,391,402 672,808,754 11,898,029,674 2,187,251,686 3,454,566,614 380,499,623 688,824,078 6,711,142,001

Investments Long-term loans and advances Current assets Inventories Trade receivables Cash and bank balances Short term loans and advances

2.11 2.12

2.13 2.14 2.15 2.16

20,688,178,863
Significant accounting policies Notes to the financial statements The notes referred to above form an integral part of the balance sheet As per our report of even date attached for B S R & Co. Firm registration number : 101248W Chartered Accountants for SKOL Breweries Limited 1 2

18,609,171,675

Zubin Shekary
Partner Membership No. 48814

Paolo Lanzarotti
Managing Director

Harald Harvey
Director

Paul D’Silva
Chief Financial Officer Bangalore Date: 15 May 2012 Bangalore Date: 15 May 2012

Sridhar S
Company Secretary

32

870.400.002.924.589.213 For the year ended 31 March 2012 For the year ended 31 March 2011 17.659 950.091) 19.113.922.293.17 29.216.952.323) 15.690.20 2.744.192.286.325) (1.186) 16.103.263 Expenses Cost of materials consumed Purchase of stock in trade Changes in inventories of finished goods.current tax .28 1 2 (5.371.153 24.60) The notes referred to above form an integral part of the statement of profit and loss As per our report of even date attached for B S R & Co.fringe benefit tax pertaining to earlier years .827.072.002 (1.708.889.604.405.577.970) (1.332.662.wealth tax Loss for the year 1.SKOL Breweries Limited Annual Report 2011-12 Statement of Profit and Loss Rs.012 14.10 each) .150.859.787 872.127.42 2.509.36 Earnings per equity share (par value.509.19 2. Note Income Revenue from operations Less: Excise duty Less: Discounts 2.108) 5.679.144.01) (2.246 (17.484 (603.609.194.733 Other income 2.899.686.530 16.148.22 8.947) (1.866 (11.21 2.585.878.851. Firm registration number : 101248W Chartered Accountants for SKOL Breweries Limited Zubin Shekary Partner Membership No.718 7.973.10 2.201 114.377) 2.508) 14.546.901.729 10.152.436.085.deferred tax (credit)/ charge .948. Rs.131.639.675 2.463.18 46.036 130. 48814 Paolo Lanzarotti Managing Director Harald Harvey Director Paul D’Silva Chief Financial Officer Bangalore Date: 15 May 2012 Bangalore Date: 15 May 2012 Sridhar S Company Secretary 33 .453.323 (66.216.591 818.555 1. work-in-progress and traded goods Employee benefits expense Finance cost Depreciation and amortisation Reversal of impairment loss Other expenses 2.372.053 1.586 Loss before tax Tax expense: .862.271) (2.610) 1.568.677.Basic and diluted Significant accounting policies Notes to the financial statements 2.679 (8.pertaining to earlier years (reversal) .263 5.197 (601.

Any revision to accounting estimates is recognised prospectively in current and future periods. taxes and other incidental expenses related to the acquisition or construction of the respective assets. 1. (ii) Income from contract bottling Income from contract bottling is recognised when the right to receive bottling fee is established which normally takes place on dispatch of goods by contract bottlers to its customers. The cost of fixed assets includes freight. 1. do not include any adjustments relating to recoverability and classification of asset amounts or to classification and amount of liabilities that may be necessary if the Company was unable to continue as a going concern. notwithstanding accumulated losses and reliance on short term borrowings due to the following considerations: – Expected steady future growth reflected in financial projections prepared by the management. sales returns and trade discount. Actual results could differ from those estimates. therefore. – Expected continual technical and financial support by the SABMiller group. 2006 and the relevant provisions of the Companies Act. to the extent applicable. 1. (i) Sale of goods Revenue from sale of manufactured and traded goods is recognised on transfer of all the significant risks and rewards of ownership to the buyer which normally takes place on despatch of goods. The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards ('AS') prescribed by Companies (Accounting Standards) Rules.3 Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the results of operations during the reporting period end. packaging. These financial statements are prepared and presented in Indian Rupees. marketing and sale of beer. (iv) Sale of spent malt and scrap Revenue from sale of spent malt and scrap is recognised on transfer of all the significant risks and rewards of ownership to the buyer which normally takes place on despatch of goods. 1956 on 18 November 1988.5 Fixed assets Fixed assets are carried at cost of acquisition or construction less accumulated depreciation and provision for impairment of assets. The amount recognised as sale is net of sales tax and sales returns. The amount recognised as sale is 1. These financial statements. The Company is primarily engaged in the business of brewing.SKOL Breweries Limited Annual Report 2011-12 Notes to the financial statements 1. (iii) Interest Interest income is recognised using the time proportion basis taking into account the amount outstanding and the interest rate applicable.2 Going concern These financial statements have been prepared on a going concern basis. and – Subsequent renewal of short term borrowings from banks. 1. duties. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised net of sales tax. 1956. distribution. Significant accounting policies Background SKOL Breweries Limited ("the Company" or "SKOL") was incorporated as a private limited company under the Companies Act. 34 .4 Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably.1 Basis of preparation The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting. Sales are presented both gross and net of excise duty.

Others Computer equipment Furniture. less its residual value (if any). After recognition of impairment loss. the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. depreciation is provided at a higher rate based on the management's estimate of useful life/ remaining useful life. which are not ready for their intended use on such date. previous history of these brands and internationally accepted practices. The recoverable amount is higher of the asset's net selling price and value in use. if no impairment loss had been recognised. the recoverable amount is determined for the cash generating unit to which the asset belongs. costing individually Rs 5. If any such indication exists. where the management's estimate of the useful life of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid schedule. Significant accounting policies to the extent they relate to the period till such assets are ready to be put to use. over its remaining useful life. An impairment loss is reversed only to the extent that the carrying amount of asset does not exceed the net book value that would have been determined.6 Depreciation Depreciation on fixed assets is provided on the straight-line method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act. Leasehold land is amortised over the lease term. whichever is lower. depreciation is provided on the revised carrying amount of the asset. The reduction is treated as an impairment loss and is recognised in the profit and loss account. 1956.Wooden pallets . The costs of the fixed assets.7 Impairment The Company periodically assesses whether there is any indication that an asset or a group of assets comprising a cash generating unit may be impaired.000 or less. Leasehold improvements are amortised over the lease term or its estimated useful life of 5 years. intent to use and ability to maintain these assets. are depreciated in full in the year of purchase. the Company estimates the recoverable amount of the asset.Chillers . The rates of depreciation prescribed in Schedule XIV to the Companies Act.Crates . have been determined based on management's assessment of market conditions in India. The useful life of brands. which primarily represent brands purchased. Intangible assets are recorded at their acquisition cost.SKOL Breweries Limited Annual Report 2011-12 Notes to the financial statements 1. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount. Pro-rated depreciation is provided on all assets purchased or sold during the year. For an asset or group of assets that does not generate largely independent cash inflows. Freehold land is not depreciated. 1956 are considered as minimum rates. the carrying amount is reduced to its recoverable amount. Pursuant to this policy the following fixed assets are depreciated to their residual value over their estimated useful life: Class of assets Buildings Plant and machinery . Assets. 1. 1. are disclosed as capital work-inprogress. However. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists. fittings & office equipment Motor vehicles Brands Computer software Number of years 28 5 2 3 14-18 4 6 5 20 4 35 .

stores and spares and traded goods Work-in-progress and finished goods (including goods in transit) First-in-first-out ('FIFO') method FIFO method. Cost of inventories comprises purchase price. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as income or as expense for the period. which are in regular use and are not an integral part of any fixed asset. Such exchange differences are recognised in the profit and loss account in the reporting period in which the exchange rates change. 1. The premium or discount on all such contracts arising at the inception of each contract is amortised as income or expense over the life of the contract. costs of conversion and other costs incurred in bringing the inventories to their present location and condition. as determined by management on commercial consideration determined separately for each individual investment. and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date.10 Inventories Inventories are valued at lower of cost and net realisable value. 1. and it is estimated that the cost of the finished products will exceed their net realisable value. which necessarily take a substantial period of time to get ready for their intended use. The net realisable value of work-inprogress is determined with reference to the selling prices of related finished goods in the ordinary course of business. packing materials and other supplies held for use in production of inventories are not written below cost except in cases where material prices have declined. 1. packing materials. are capitalised. Other borrowing costs are accounted as an expense. The comparison of cost and net realisable value is made on an item-by-item basis.11 Foreign exchange Foreign exchange transactions are recorded at the rates of exchange prevailing on the date of the respective transactions. Raw materials. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the profit and loss account for the year.9 Investments Long-term investments are carried at cost less any otherthan-temporary diminution in the value. Production overheads are allocated on the basis of normal capacity of production facilities - Maintenance spares. are treated as inventory and valued at cost.8 Borrowing costs Borrowing costs directly attributable to acquisition or construction of those fixed assets. or the settlement date where the transaction is settled during the reporting period. The methods of determination of cost of various categories of inventories are as follows: Raw materials. 36 . less estimated cost of completion and estimated costs necessary to make the sale. Forward contracts and other derivatives are entered into to hedge the foreign currency risk of the underlying outstanding at the balance sheet date. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rate on that date and the resultant exchange differences are recognised in the profit and loss account. is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date. Significant accounting policies 1. The exchange difference on the forward exchange contract entered into to hedge the foreign currency risk of the underlying outstanding at the balance sheet date.SKOL Breweries Limited Annual Report 2011-12 Notes to the financial statements 1.

1. 1. profit and loss account on an accrual basis. which is a defined contribution scheme.e.SKOL Breweries Limited Annual Report 2011-12 Notes to the financial statements 1. but probably will not. where there is unabsorbed depreciation or carried forward business loss under taxation laws. which is a defined contribution scheme.14 Provisions and contingent liabilities The Company recognises a provision when there is a present obligation as a result of an obligating event that probably requires outflow of resources and a reliable estimate can be made of the amount of the obligation. Significant accounting policies For forward exchange contracts and other derivatives that are not covered by AS 11 . which qualify for cash flow hedge accounting and where Company has met all the conditions of cash flow hedge accounting.12 Employee benefits (i) Contributions to provident fund. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. This loss/ gain would be recorded in profit and loss account when the underlying transactions affect earnings. Actuarial gains/ losses are recognised immediately in the profit and loss account and are not deferred.'The Effects of Changes in Foreign Exchange Rates' and that relate to a firm commitment or highly probable forecast transactions. are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event. are charged to the profit and loss account on an accrual basis.13 Leases Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased asset are classified as operating leases. (iii) Gratuity. Other derivative instruments that relate to a firm commitment or a highly probable forecast transaction and that do not qualify for hedge accounting have been recorded at fair value at the reporting date and the resultant exchange loss/ gain has been debited/ credited to profit and loss account for the year. which is a defined benefit scheme is provided for based on an actuarial valuation carried out by an independent actuary as at the balance sheet date. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote. deferred tax (ii) The Company has an arrangement with Life Insurance Corporation of India to administer its superannuation scheme. 1. however. based on a reliable estimate of such obligation.'Financial Instruments: Recognition and Measurement' with effect from 1 April 2008. the Company has adopted the principles of AS 30 . 1. The contributions to the said scheme are charged to the 37 .15 Taxation Income-tax expense comprises current tax (i. A disclosure of a contingent liability is made when there is a possible obligation or a present obligation that may. i.e. Operating lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term. Only such changes in legislation are taken into account while providing for gratuity that have been enacted upto the balance sheet date. (iv) Compensated absences are provided for based on an actuarial valuation carried out by an independent actuary as at the balance sheet date. are fair valued at balance sheet date and the resultant exchange loss/ gain is debited/credited to the hedge reserve. require an outflow of resources. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future. amount of tax for the year determined in accordance with the Income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). Provisions for onerous contracts. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. no provision or disclosure is made. Derivative financial instruments.

In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India ('ICAI').SKOL Breweries Limited Annual Report 2011-12 Notes to the financial statements 1. Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realised.18 Cash flow statement Cash flows are reported using the indirect method. It recognises the impact of the revision of the original estimates. The intrinsic value of the employee services received in exchange for the grant of such options is recognised as an expense. Potential dilutive equity shares are deemed converted as of the beginning of the year. which would have been issued on conversion of all potentially dilutive equity shares. The number of equity shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share. and also the weighted average number of equity shares. 1. Significant accounting policies assets are recognised only if there is a virtual certainty of realisation of such assets. The effect of uncertainty as to whether any performance criteria of share options will be met is dealt with by estimating the probability of shares vesting and therefore the cost is adjusted and readjusted for the probability of vesting in the vesting period. the average market value of the outstanding shares). The potentially dilutive equity shares have been adjusted for the proceeds receivable had the shares been actually issued at a fair value (i. The Company offsets. 1. The amount recognised is spread over the vesting period which is also the period over which some of the scheme performance criteria relate.e. only potential equity shares that are dilutive and that either reduces the earnings per share or increases loss per share are included. where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis. At each balance sheet date.17 Employee stock compensation cost The Company applies intrinsic value method of accounting for stock options granted by the ultimate holding company to the employees of the Company after 1 April 2005. whereby the net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. 1. In computing the dilutive earnings per share. The cash flows from regular revenue generating. the said asset is created by way of a credit to the profit and loss account.16 Earnings per share The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. 38 . the current (on a year on year basis) and deferred tax assets and liabilities. in the profit and loss account over the remaining vesting period. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income-tax during the specified period. unless they have been issued at a later date. if any. the estimates of the number of options that are expected to become exercisable are revised. Minimum Alternative Tax ('MAT') credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal Incometax during the specified period. investing and financing activities of the Company are segregated.

837.45 37.745 231.511 87.748 39 .138. 10 each Issued. of shares % holding 142. 142.138.183.45 37.837.311.000.637.067.000.000.341.038 61.745 As at 31 March 2011 231.183. 10 each are held by SABMiller Asia BV.637.745 (previous year: 231.038 (previous year: 87.000.977 (previous year: 142.038 61.492. SABMiller plc is the ultimate holding company.076) (1.183. 2.977 87.067.311.511) equity shares of Rs.000 6.000.1 Share capital Authorised 300.745 Of the above.341. of shares % holding 142.000.000 (previous year: 300.78 As at 31 March 2011 No. 10 each fully paid up 2.067. There have been no buyback of shares.748 6.029.000 2.311. 87.450 3.745) equity shares of Rs.183.067.23(b)) (1.450 (a) List of persons holding more than 5 percent shares in the Company Name of the share holder SABMiller Breweries Private Limited SABMiller Asia BV As at 31 March 2012 No. 2.000. 10 each are held by SABMiller Breweries Private Limited.457.450 2. All equity shares carry similar voting rights of 1:1 and similar dividend rights.038) equity shares of Rs.183.745 231.748 6.837.637.450 2.78 2.748 As at 31 March 2011 2.236.000 3.2 Reserves and surplus Capital reserve Securities premium account Amalgamation adjustment reserve/ (deficit) account Opening balance Add: On account of scheme of arrangement (refer to note 2.837.457.946 (1.000 2. Notes to the financial statements Rs. the immediate holding company. subscribed and paid up 231.000 6.743. The Company has issued only one class of equity shares having a par value of Rs.000 3.000) equity shares of Rs.000.457.138.138.000.000.000.000 3.000.341.130) (1.000.311.000.076) 427.637.236.341.000 As at 31 March 2012 As at 31 March 2011 (b) Reconciliation of the number of shares outstanding at the beginning and at the end of the year Particulars Number of shares at the beginning of the year Number of shares issued during the year Number of shares bought back during the period Number of shares outstanding at the end of the year As at 31 March 2012 231.076) As at 31 March 2012 2.SKOL Breweries Limited Annual Report 2011-12 2. issue of shares pursuant to contract without payment being received in cash for the period of five years immediately preceding the balance sheet date.183. 10 each.236.

2.856 35.4 Long-term provisions Provision for gratuity (refer to note 2.478 49.172.213) (1.081.624.138.35) (a) (b) Corporate guarantees have been given by SABMiller Plc for the external commercial borrowings from banks.316 (3.008.240 472.878 (3.629 36.658.399.186 and Rs.568 2.381.406.5 Other long term liabilities As at 31 March 2012 8.500 are due for repayment in the financial year 2015-16 and 2016-17 respectively.276.242.104.821.SKOL Breweries Limited Annual Report 2011-12 2.346. As at 31 March 2012 2.402.950 (c) 2.023.478. There have been no defaults in repayment of principal and interest during the current year and previous year.480 481.142.399.2 Reserves and surplus continued Surplus/ (deficit) General reserve Opening balance Add/(Less): Movement during the year 1.218.218.787.836) (601.914.771.3 Long-term borrowings Unsecured Term loans . Rs.723.194.355.292.897) 2.349.008.922.128. Notes to the financial statements Rs.738.821.316 Debit balance in profit and loss account brought forward Add: Loss for the year Add: Losses of Demerged Undertaking for the period from 1 April 2009 to 31 March 2011 transferred as per the scheme of arrangement (refer to note 2.981 363.775 As at 31 March 2011 2.213) (2.878.878.624. 889.568 21.090 As at 31 March 2011 66.325) 1.508.316 1.563 8.415. Terms of repayment: (i) External commercial borrowings from Standard Chartered Bank are repayable after a period of 5 years from each drawdown date.155.541.686 54.372.207 2.218.external commercial borrowings from banks Loans and advances from related party (refer to note 2.732 As at 31 March 2011 21.472 1.223.505.695.399. Of the above outstanding balance in the current year.399.759.636 371. 1.349.580.056) (3.131.563 Derivative financial liabilities 40 .377) As at 31 March 2012 As at 31 March 2011 (95.893 1.218.23(c)) (3.518) (4.740) 1.316 1.32) Provision for compensated absences Provision for claims As at 31 March 2012 81. (ii) Tenure and terms for repayment have not been specified for loans and advances from related party.

000.506.628 As at 31 March 2011 4.Acceptances As at 31 March 2012 As at 31 March 2011 31.085 18.165 3.818.35) Other loans and advances Unsecured: Working capital loan from banks (a) Working capital loan from banks are due for repayment or renewal within a period of 12 months.544 1.489.743.545.370.32) Provision for compensated absences Provision for fringe benefit tax (net of advance tax) Provision for income-tax (net of advance tax and tax deducted at source) 41 .800 81.for expenses 2.378 14.725.SKOL Breweries Limited Annual Report 2011-12 2.956 242.166.7 Trade payables Trade payables .901.derivative financial liabilities .966.456 Provision for gratuity (refer to note 2.643.239 1.959 1.488.103.047.214 39.538.000 8.351.586.327 317.645 - 309.831.Dues to micro and small enterprises (refer to note 2.593.136.187.311 291.011.Dues to other creditors .919.290 2.779 193.851 2. Notes to the financial statements Rs.338.807 As at 31 March 2011 53.466 1.801 10.346 4.708 128.044 27.475 2.500.743 103.963 5.044 33.682.39) .904.095.966.407.600 Current maturities of long term debts Interest accrued but not due on borrowings Payable to related parties (refer to note 2.370.976 237.041.500.478.210 1.787.220 353.9 Short-term provisions As at 31 March 2012 275.487 2.889 1.697.584.8 Other current liabilities As at 31 March 2012 572.902.loans from holding company (refer to note 2.377.818.227.35) Deposits from customers and del credre agents Book overdraft Excise duty payable Other liabilities .368. 2.039.607.bank overdraft (b) from related parties .694. (b) There has been no defaults in repayment of principal and interest during the current year and previous year.757 8.439 8.statutory .093.648 18.420.456.521.169 1. As at 31 March 2012 As at 31 March 2011 125.338.184 217.645 7.730 434.6 Short-term borrowings Loan from banks repayable on demand Unsecured: (a) from banks .744.580 399.000 7.011.

690.245 145.600.975.170.419.546.859.113 237.480.966 50.879.494.305.385 115.338 120.277 14.954.665 1.661 120.728.402.540 98.227.365.673 2.154 6.844.872 54.789 3.134.388.511 83.518 2.409.295.787 518.043. Tangible assets Freehold land Leasehold land Leasehold improvements Buildings Plant and machinery Computer equipment Furniture.145.400 561.927.363.519.343 2.760.354.609.428 8.396.584.620.414.909 2.410.649.588 87.397.694 981.111 74.285 35.065.901 10.083.208.841.277 890.312 12.831.758.204.255 1.954 86.942 371.837.911 1.363.855.408 1.830 1.447.998.958 309.939 6.600.835.307.183.652 3.095.028 31.854.652 101.707 787.726.276 28.920.792 7.061.742.517.018.338 2.176.131.264.621 10.067 4.228.422 2.112.263 29.513.551 8.213 9.107 2.449.221.497.489.054 860.410.055.896 3.770.510 1.146.746.963 16.499 30.061.827.103.720 6.012 25.2.489.622.410.618.504.047.311 32.518 13.855.108) (17.120 10.979 4.516 6.396 41.338 101.692 Rs.000 10.465 9.126.543 37.920.111.23).033.050 612.894.561. Description Gross block Additions Tangible assets Leasehold land Leasehold improvements Buildings Plant and machinery Computer equipment Furniture.625.678 11.873.830 Intangible assets Brands Computer software 3.734 181.382 56.246 950.675 559.589.699 89.032 455.510 2.138 42 (i) The company does not have any asset purchased on finance lease.009.926 347.004 1.543 405.324.789 604.402.603 8.432.569.121 86.989 3.246 3.510.891.910.349.707 787.648.111 378.742 8.043 824.468.070.025.299 8.199 5.859 60.165 5.114 91.725 Deletions Accumulated depreciation Charge Deletions Freehold land Buildings Plant and machinery Computer equipment Furniture.807 59.605. fittings and office equipment Motor vehicles 405.063.094 10.594 2.395.671.813.962 34.133 28.854.276 30.028.672.661 120.335 604.167 326.108) Deletion 716.196.982 476.835 860.962 10.090 7.317.836 130.193 22.706.974.707 787.390.373 90. As at 31 March 2012 16.971.215 206.807 49.054 860.621 1.497.10 Fixed assets Description As at 1 April 2011 Acquired on scheme of arrangement (refer note ii below) Gross block Additions Deletions As at 31 March 2012 As at 1 April 2011 Accumulated depreciation Acquired on scheme of arrangement (refer note ii below) Charge Deletions As at 31 March 2012 Provision for impairment as at 31 March 2012 (refer note iii below) Net block As at 31 March 2012 As at 31 March 2011 Rs.418 15.625 20.318 96.788.673.470.746.945.309.107 SKOL Breweries Limited Annual Report 2011-12 .367.080 10.113 237.114 5.959.447 Total Previous year 15.346.449 72.916.556 233.189.770.205.908.061.807 15.855.086.414. fittings and office equipment Motor vehicles Total 406.109.604.084.988.982.289.991.103. Notes to the financial statements 2.658 388.389 8.280.891 3.948.576 378.928.108.886 18.201 676.674.079. Further the table above includes additions and deletions from the period 1 April 2009 to 31 March 2011 as follows: Rs.661 388.574.113 237.685.516 152.234 16.937.000 10.449 72.942 2.478 8.887 122.035 195.363.317.123 6.865 16.577.055.009.225.245 173.860 58.949.114.263 152.508 2.870 65.250.162.260 2.338 101.585 2. fittings and office equipment Motor vehicles Total Previous year (iii) Provision for impairment Description As at 1 April 2011 16.298.202.683 32.888.889.977.920.567.778 11.187 1.411.120 6.555.146.722 461. (ii) Additions on scheme of arrangement represent gross block of assets and accumulated depreciation acquired on 31 March 2009 from the demerged Company (refer note 2.130.536.799 Provision for impairment (Reversal) (17.517.448 206.787 28.781.701 181.184 7.000 10.903.335 11.202 3.043 170.835.380 11.918.585 3.562 489.069 135.748.847.951.043.984.204.983 1.729 1.146.037.346.532.846 14.047 872.800.166 11.600.028.109.816 6.018.619 93.730 6.222 233.116.688 530.621 6.434 93.107 122.807 8.819.407.

500 12. 100 each in Janata Sahakari Bank Limited 295 (previous year: 295) fully paid up equity shares of Rs.005) fully paid up equity shares of Rs. 100 each in Haryana State Cooperative Bank Limited 50.000 5. 10 each in SDF Industries Limited 1 1 12.500 500.601 (530.000 (previous year: 10.000 500. 10 each in Anusha International Limited 1.unquoted 1 (previous year:1) fully paid up equity shares of Rs. diminution in the value of investments (530.000) fully paid up equity shares of Rs.500 29. 10 each in Sachdev International Limited 12.000 5.000) 178.000 10.at cost Investment in equity shares .700 (previous year: 1.700 1.000) fully paid up equity shares of Rs.000 (previous year: 50.000 (previous year: 5.500 50.000 (previous year: 12. 10 each in AP Heavy Machinery & Engineering Limited 10.SKOL Breweries Limited Annual Report 2011-12 2. 10 each in Indana Spices and Food India Limited 80. 10 each of Maini Granites Limited 300 (previous year: 300) fully paid up equity shares of Rs. 3 (previous year: Rs.000) fully paid up equity shares of Rs.000) fully paid up equity shares of Rs. 10 each of MBL (AP) Breweries Limited 12.000) fully paid up equity shares of Rs. 100 each in Maa Communication Bozel Limited 7.000 (previous year: 7. Notes to the financial statements Rs.000) 178.500 29.000 708.005 (previous year: 5. 10 each of Shushruta Medical Aid and Research Hospitals Limited 5.000 7.700 7.700) fully paid up equity shares of Rs.000 1.601 Less: Provision for. 2. other than temporary.000) fully paid up equity shares of Rs.000 300 300 10. 10 each in Scarlet Flowers and Agritech Limited 100 (previous year: 100) fully paid up equity shares of Rs.11 Investments As at 31 March 2012 As at 31 March 2011 Non-current investments Non trade .000 708.000 12.601 50.500 100 100 80.500) fully paid up equity shares of Rs.000 (previous year: 80.500 (previous year: 12.000 80.000 12.601 43 . 10) each in Vulcan Leasing and Investments Limited 5.

470 9. 10 each in Ultratech Cement Limited 400 (previous year: 80) fully paid up equity shares of Rs 2 (previous year Rs.000) fully paid up equity shares of Rs. 10 each in Syndicate Bank Limited As at 31 March 2012 As at 31 March 2011 2.631 4.000) As at 31 March 2012 157.458.598.166.392 672.332 26.227 11.500 700.Prepaid expenses .389 40.115.031.000 (previous year: 2. 2 each in Gujarat Ambuja Cement Limited 2.quoted 30.000) As at 31 March 2011 13.863) 672.164. 2 each in in Satyam Computer Services Limited 8.863 (160.750 400.400) fully paid up equity shares of Rs.895 32.598.550 2.185.000 2.500 700.Derivative financial assets . considered good Capital advances Security deposits Rental deposits Deposit made under protest Loans and advances to related parties (refer to note 2.574 2. Notes to the financial statements Rs.677 26.890 (530.Others 2.074) 774.600 (previous year: 8.400 (previous year: 1.619.904 33.750 400.197 195.446 61.088.705.35) Other loans and advances . considered doubtful Other loans and advances Less: Provision for doubtful advances 182.808.074 (182.598.000 (previous year: 15.124.808.027.549 270.754 160.027.649.159.993 8.619.850 633. 2.SKOL Breweries Limited Annual Report 2011-12 2.000) fully paid up equity shares of Re.760.631 44 .660.12 Long-term loans and advances Unsecured.212.031.936 46.790 (530.527 11.574 Investment in government or trust securities National Savings Certificates Indira Vikas Patra 2.631 159.489.417.402 12.470 9.918 42.060 56.867.550 2.407.143 774.060 56.850 633.882 11. 1 each in ITC Limited 400 (previous year: 400) fully paid up equity shares of Rs.115.232.000 (previous year: 30.057 Aggregate market value of quoted investments Aggregate provision for diminution in value of investments 2.890.11 Investments continued Investment in equity shares .216 203. 2 each in Larsen & Toubro Limited 1.600) fully paid up equity shares of Rs.944 2.061.754 Unsecured.662.417.332.944 2.105.000) fully paid up equity shares of Rs.391.791.124.249 179. 10) each in Tata Motors Limited 15.000 2.

200 45 .285.035.527 368.767 2.finished goods Stores and spares 2. 2.157 363.549.251.087 3.423 380.746 97.525.195.814 14.443 178.798 155.013 5.687.292.194 2.371 344.359.830 216.282.615 688.227 4.986.in exchange earners foreign currency ('EEFC') account Cash on hand Other bank balances Balances with banks: .906 175.810.508.454.499.056 (368.14 Trade receivables As at 31 March 2012 As at 31 March 2011 Unsecured Outstanding for a period exceeding six months Considered good Considered doubtful Others Considered good Considered doubtful Less: Provision for doubtful debts 4.SKOL Breweries Limited Annual Report 2011-12 2.553.in current accounts .652.729.473 (401.053.525.742.010.557 37.15 Cash and bank balances As at 31 March 2012 3.442) 3.908 786.242.raw materials Work-in-progress Finished goods Goods in transit .452.042.706) 4.399 178.791.445.711.623 151.986.427.036 4.702.018.755 365.357.750.882 43.13 Inventories As at 31 March 2012 1.024 2.10 of significant accounting policies for disclosure of mode of valuation of inventories As at 31 March 2011 1.423 14.503 2.445 21. Notes to the financial statements Rs.136.729.443 23.442 Cash and cash equivalents Balances with banks: .209.944.123.974.202 222.557 6.344.552.187.924.691 3.614 As at 31 March 2011 100.284.823.566.686 Raw materials Goods in transit .846.521.715 Refer note 1.in margin money deposit accounts maturing within 12 months 23.

421.471 46.000 157.530.000 43.565.Profit on sale of fixed assets.695.870.625.272 20.971 28.320 21.882 2. net of provision for tax Fringe benefit tax.171 234.263 193.647.795 9.293 31 March 2011 1.376 356.108 96.SKOL Breweries Limited Annual Report 2011-12 2.518.412 688.000 4.Sale of raw materials .16 Short term loans and advances Unsecured.Miscellaneous income 560.430 170.254 148.17 Revenue from operations Sale of manufactured goods.016. Notes to the financial statements Rs.550 1.370.196 24.250. 2.133.918 114.35) Advance tax and tax deducted at source.463 - 30.165.822.175 145.038.Trade advances .195.821 1.Balances with excise and other government authorities .127 218.269.866 2.565.824.072.347 290.763 23.054.928.530 For the year ended 31 March 2011 24.Duty drawback receivable .679 For the year ended 31 March 2012 10.Derivative financial assets .292 11.232.386 29.973.463 3.634.Net gain on sale of investments .519 339.570.906 60.276.Interest accrued but not due 10.005.612 33.852 1.925 8. considered good Loans and advances to related parties (refer to note 2. net .467 24.070.Advances for supply of goods and rendering of services .876 210. gross Income from contract bottling Sale of spent malt and scrap Duty draw back on export Royalty income For the year ended As at 31 March 2012 As at 31 March 2011 1.407.414 1.216. gross Sale of traded goods.387 8.414 76.176.598.263.Prepaid expenses . net of provision for tax MAT credit recoverable Others .878.229.800 64.037.679.443 239.18 Other income Interest income Dividend income Net gain on foreign currency translation and transactions Other non-operating income .664 21.000 14.150.961.761.047.143.366.928.609.446 338.Loans and advances to employees .571 331.463 3.827.082.973.189.615 8.157.036 2.012 46 .078 For the year ended 31 March 2012 29.910.

383.252.559 652.615 692.427.762 336. Notes to the financial statements Rs.184.541 18.626 867.296 130.011.862 1.252.978 19.435.390.695.967 30.gratuity Compensated absences Staff welfare expense 41.19 Changes in inventories of finished goods.855 1.106 (66.519.549.457 39.889.464.659 (A-B) 401.873.770.188.653.20 Employee benefits expense Salaries and wages Contributions to .496 31 March 2012 1.568.255.656.606.657.183.349 175.945 531.908 789.626 - 195.657 610.216.255.615 692.592 818.151 543.508.153.288.610) For the year ended For the year ended 31 March 2012 For the year ended 31 March 2011 175.405.787 37.062.400.241 336.373.899.454 47 .637 5.592 Less: Excise duty on opening stock Less: Excise duty on opening stock of Demerged Undertaking as at 1 April 2011 (A) Closing stock Work-in-progress Finished goods 222.775.546.812.549.21 Finance cost Interest expense Other borrowing costs For the year ended 31 March 2012 1.477 1.152.SKOL Breweries Limited Annual Report 2011-12 2.033.591 For the year ended 31 March 2011 794.053 For the year ended 31 March 2011 1.804 11.867.693 371.564 837.122.555 2.244.802.209.570 1.714 884.067 23.820 1.041 (9.002.provident and other funds .230) 35.272.945 4.032.335.763 Less: Excise duty on closing stock (B) (Increase)/ decrease in work-in-progress and finished goods 2.344 662.581. 2. work-in-progress and traded goods Opening stock Work-in-progress Finished goods Stock in trade Add: Opening stock of Demerged Undertaking as at 1 April 2011 Work-in-progress Finished goods 10.144.063.

649.440.301 51.994.794.412 42.728.22 Other expenses For the year ended For the year ended 31 March 2012 Sales scheme expenses Commission on sales Freight outward Power and fuel Advertisement and publicity Management group service charge Rates and taxes Legal and professional Clearing and forwarding Travel and conveyance Consumption of stores and spares Rent Repairs .765.046 159.639.252.248.085.545 62.602.205 117.810.263 1.708.062 4.buildings .251 288.660 44.723 631.034.542.184.465.030.769 130.SKOL Breweries Limited Annual Report 2011-12 2.741.684 251.681 21.022.746 14. net Printing and stationery Provision for doubtful debts Provision for doubtful loans and advances Bad and doubtful debt written off Advances written off Provision for claims.766.270. net Miscellaneous 9.042.503 61.150 5.843 31 March 2011 708.881.118 191.344.469 4.214 120.693 816.266 248.246.952.943.421 56.864 183.778 176.036.896 151.585.804.129.757.972.600 919.765.358 76.948.207.245.029.064.789 38.718 862.518.018 22.667.024 13.741 297.336 5.904 55.395 46.451 74.plant and machinery .497 218.240.827.471. 2.209 153.229 93.509 793.065.012 128.989 14.502.741.425 748.117.610. Notes to the financial statements Rs.153 48 .others Telephone and other communication Training and development Insurance Loss on sale/ adjustment of fixed assets.430.518 12.534 173.115 119.276 172.276 194.073.897 189.702.206 955.

real or personal. losses and expenditure of Demerged Undertaking have been treated as profits. of or in respect of any deed. Mauritius and Austindia Pty Limited. all profits. the brewery business ('the Demerged Undertaking') of the Demerged Company vested with the Company retrospectively from 1 April 2009 ('the Appointed Date'). liabilities. marketing and sale of beer and includes all assets (whether movable or immovable. instrument or orders of the Court which shall be borne by the Resulting Company alone) in relation to or connection with negotiations leading up to this Scheme and of carrying out and implementing the terms and provisions of this Scheme shall be borne and paid by the Company. present.241. corporeal or incorporeal. (v) with effect from the Appointed Date. (ii) all debts. and the Company shall issue and allot 7. duties and obligations of the Demerged Undertaking as on the Appointed Date shall be transferred to the Company. Notes to the financial statements 2. (iv) all costs. Accounting treatment in the books of the Company.991 fully paid up equity shares of Rs. (iv) with effect from the Appointed Date and up to the Effective Date the Demerged Company carried on the business and activities of the Demerged Undertaking in trust for the Company. 10 each at par on a proportionate basis to the equity shareholders of the Demerged Company by allotting 5. future or contingent) and liabilities. (ii) the nominal value of equity shares issued and allotted to the shareholders of the Demerged Company shall be credited to the Equity Share Capital account. Australia respectively based on valuation as at 31 March 2011. charges and expenses (other than stamp duty and registration charges. including terms specifically listed in the Scheme would be vested with the Company with retrospective effect from the Appointed Date. and (v) (vi) the difference between the amount representing the surplus of assets and liabilities of the Demerged Undertaking recorded in the Company's books of account and the aggregate value of equity share capital issued by the Company shall be treated as Amalgamation Reserve and shall not be utilised for the purpose of declaring dividend by the Company in future. liabilities and employees.23 Scheme of arrangement with SABMiller Breweries Private Limited During the year. 49 . b) (iii) all suits. if any.590.174 equity shares to SABMiller India Holdings. as per the approved Scheme (i) all the assets and liabilities of the Demerged Undertaking shall be recorded at their respective book values. including items specifically. tangible or intangible.817 and 1. set out in detail in the Scheme. incomes. document.651. The Demerged Undertaking comprises of the business of brewing. vide a Scheme of Arrangement ('the Scheme') under Section 391 to 394 of the Companies Act. packaging. (iii) the obligations in respect of amount of inter-company balances between the Demerged Undertaking and the Company shall come to an end. a) Salient features of the Scheme Salient features of the Scheme as approved by the Honourable High Court of Bombay ('the Court') on 29 March 2012 and filed with the Registrar of Companies ('ROC') on 18 April 2012 ('the Effective Date') are given below: (i) the business of the Demerged Undertaking together with all related assets. actions and proceedings by or against the Demerged Undertaking pending and/ or arising on or before the Effective Date continue and be enforced by or against the Company. distributing. 1956 between the Company ('the Resulting Company') and SABMiller Breweries Private Limited ('the Demerged Company').SKOL Breweries Limited Annual Report 2011-12 2. incomes. which relate thereto or are necessary therefore. losses and expenditure of the Company.

946 c) Results of the Demerged Undertaking for the period 1 April 2009 to 31 March 2011 Particulars Income Revenue (includes inter-company Rs.856 72.419.441 1.912. 50 .302.720) Depreciation Finance cost Total (B) Loss before tax (A .436.993 54.492.950.860 281. the following assets and liabilities of the Demerged Undertaking have been incorporated in the books of account of the Company as on 1 April 2009: Particulars Assets acquired Fixed assets including capital work-in-progress Inventories Trade receivables Cash and bank balances Loans and advances Total (A) Liabilities acquired Current liabilities Provisions Total (B) Net assets acquired (A .910 427. 28.989. 10 each to be issued to the shareholders of the Demerged Company Net surplus transferred to Amalgamation adjustment reserve As per the book value of the Demerged Company as at 31 March 2009 292. 36.844 62.954.518.985.295 20.518) (95.900.128.187 431.434 835.869.182.2 to the financial statements thus eliminating the effect of inter-company transactions aggregating to Rs.064.247.276) Other income (includes inter-company Rs.398.210.042.128.518) Losses of Demerged Undertaking for the period from 1 April 2009 to 31 March 2011 have been added to the debit balance in the profit and loss account and shown under reserves and surplus in note 2.991 equity shares of Rs.758.911 366.129.962) Total (A) Expenditure Cost of materials (includes inter-company Rs.SKOL Breweries Limited Annual Report 2011-12 2.429 499.952 (95.403 149.627 55. 142. Notes to the financial statements Based on the accounting treatment prescribed above.801 1.889.467.B) Less: Nominal value of 7.569 33.985) Employee benefits expense Other expenses (includes inter-company Rs.139.936.211.426 74. 16.B) Tax expense Loss after tax Amount (Rs.241.547.743 781.531.000 255.285 247.778.) 1. 150.283.

223 9. net of service tax (included under legal and professional expenses) Rs.SKOL Breweries Limited Annual Report 2011-12 2.071 220.390 92.000.644 261. discharge statutory dues and taxes and record sales on a gross basis in the financial statements.100.Tax audit Reimbursement of expenses 10.400.000 1.768 261.507.168 94. The contract bottling agreement further specifies that the dealing between the Company and the contract bottlers is on a principal to principal basis.25.145.812 2.663.728 51 .784.200.938.536.146.580 29.Purchase of Hops 296. Auditors' remuneration. Contingent liabilities and other commitments Rs.000 1. Notes to the financial statements 2. Particulars As at 31 March 2012 As at 31 March 2011 (i) Contingent liabilities Claims against the Company not acknowledged as debts in respect of: a) Sales tax matters b) Excise matters c) Service tax matters d) Custom matters e) Other matters (ii) Commitments a) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for b) Other commitments .26. Income from contract bottling operations pertains to the revenue share the Company has earned on sales made by the tie-up units ('contract bottlers'). 2.619.031.575 94.Statutory audit .24.912 75.957 153.261.972 158.555 23. The above practice is consistent with prevalent industry practice. These revenues are recorded on a net basis in order to comply with relevant statutory regulations.000 452. Particulars For the year ended For the year ended 31 March 2012 31 March 2011 As auditor .000 443.442.448. account for collections in their books of accounts.555 59.923 8. where by tie-up units raise invoices on their customers.

) 140.943.296.252.330 8.SKOL Breweries Limited Annual Report 2011-12 2.371.538.899 % 2 98 Imported Indigenous 136.729 100 (e) Consumption of imported and indigenous stores and spares Particulars For the year ended 31 March 2012 Amount (Rs.640 3.) 10. each being less than 10% in value of the total consumption.272 692.502.937.117.575 3.836.830 7. 1956: (a) Details of finished goods (including goods in transit) and turnover (gross) Rs.675 For the year ended 31 March 2011 1.604.436.570.626 5.574.113.113.462.27. For the year ended 31 March 2012 1.466 20.675 7. Notes to the financial statements 2.347.524 3.714 29.922. 31 March 2012 For the year ended 31 March 2011 838.209. Additional information pursuant to the provisions of paragraph 5 of general instructions for preparation of the statement of profit and loss as per revised Schedule VI to the Companies Act.480.262 % 14 86 Imported Indigenous 74.518.281.474.704.763 - For the year ended 31 March 2011 652.604.) 14.626 Rs.323 3.252.511 8. Beer Opening stock Add: Opening stock of demerged undertaking Sales (gross of excise duty and discounts) Closing stock (b) Details of traded goods For the year ended 692.731.276.570 9.076.729 (d) Consumption of imported and indigenous raw materials and packing materials Particulars For the year ended 31 March 2012 Amount (Rs.467.290.854 Beer Opening stock Purchases Sales (gross of excise duty and discounts) Closing stock (c) Consumption of raw materials and packing materials For the year ended 31 March 2012 2.153.382.530.808 120.468 106.565.263.886 2.141.117.750.350.516 63. Particulars Malt Bottles Others * * It is not practicable to furnish quantitative information in view of the large number of items which differ in size and nature.) % 2 98 100 For the year ended 31 March 2011 Amount (Rs.268 7.276 % 12 88 100 For the year ended 31 March 2011 Amount (Rs.436.684.108 Rs.463 789.890.129 24.778 100 52 .922.775.345 8.

094 For the year ended 31 March 2011 223.183.933.640 297.01) For the year ended 31 March 2011 (601.715.425.642.565 529.208.702.456 23.847 Rs. except number of shares) For the year ended 31 March 2012 (1.60) Loss for the year attributable to equity shareholders Weighted average number of equity shares of Rs.28. 10 each used for calculation of basic and diluted earnings per share * Basic and diluted earnings per share * Since the economic benefits under the Scheme have accrued from the appointed date.184) Rs. Notes to the financial statements 2. 16.372.979 115.234 28.534 53.439.549 * Includes withholding taxes of Rs.766.028. worked out at 15 days salary (last drawn salary) for each completed year of service. Expenditure in foreign currency (accrual basis) Particulars For the year ended 31 March 2012 13. Earnings in foreign currency (accrual basis) Particulars For the year ended 31 March 2012 320.170.115 61.248.048 30.803.194.184 227.29.663.755 (previous year: Rs 25. 53 .337.078. For the year ended 31 March 2011 13.377) 231.921 115. 2.117.745 (2.536 25.553 Travel and conveyance Management group service charge* Salaries. 29.363.940.146 (previous year: Rs.541 67. Earnings per share Particulars (Figures in Rs. Value of imports on CIF basis Particulars For the year ended 31 March 2012 69.118 Rs.068.131.212) ** Includes withholding taxes of Rs.325) 238.962 213.32.687 645.483.266.667.31.319. Export sales at FOB value 2.031 309.501.301 251.711. 7. Gratuity The Company has a gratuity plan for the employees of the Company. The obligation under the scheme is partially funded by contributions being made towards qualifying insurance policies obtained from the insurer. Every employee who has completed 5 years or more of service is eligible for gratuity on separation. wages and bonus Interest expense ** Professional and consultation fees Others 2.736 (5.SKOL Breweries Limited Annual Report 2011-12 2. the number of equity shares to be issued pursuant to the scheme has also been considered as of the beginning of the year for the purpose of calculation of earnings per share.907.832.280 204.30.117 For the year ended 31 March 2011 78.360.446. Raw materials Stores and spares Capital goods 2.052 20.

030) 1.817.972 2.000.972 54 .492.033 11.430 31 March 2011 96.389.375. 31 March 2012 Current service cost Interest cost on defined benefit obligation Expected return on plan assets Net actuarial loss/ (gain) recognised for the year Past service cost Net benefits expense Actual return on plan assets 11.415.963.190 6.375.373.034.776.479) 96.329) 13.286.837) 1.972 29.994.654. 31 March 2012 114.399.500) 13.102) (6.041 2.527 8.389.843 114.190 6.792 19.322 (5.189 18.237 81.047.264 (2.375.383.137 8.598.123 Balance sheet Details of provision for gratuity Particulars Defined benefit obligations Fair value of plan assets Plan liabilities As at As at Rs.856 Changes in the present value of the defined benefit obligation Particulars For the year ended For the year ended Rs.764.264 (2.888 31 March 2011 8.804 2.357.913. Notes to the financial statements Profit and loss account Net employee benefits expense (recognised in employee benefits expense) Particulars For the year ended For the year ended Rs.090.189 (6.667 32.322 (2.000.381.667 31 March 2011 77.527 8.116 66.357.047.SKOL Breweries Limited Annual Report 2011-12 2.183.415. 31 March 2012 Opening defined benefit obligation Add: Opening defined benefit obligation of the Demerged Undertaking Current service cost Interest cost Benefits paid Past service cost Actuarial loss / (gain) on obligation Closing defined benefit obligation 96.286.746.861.

considered in actuarial valuation.263 (5. The overall expected rate of return on plan assets is determined based on the market prices prevailing on that date.919.430. 31 March 2012 100% 31 March 2011 100% Principal assumptions used in determining gratuity benefit obligations for the Company's plan Particulars As at As at Rs. 31 March 2012 29.030) 32.598. take account of inflation.837 (148. seniority.102 564.399. applicable to the period over which the obligation is to be settled. 31 March 2012 Discount rate Expected rate of return on plan assets Salary increase Employee turnover Retirement age 8.994.994.864 (2.021 857.116 Major categories of plan assets as a percentage of the fair value of total plan assets Particulars Qualifying insurance policies from the insurer As at As at Rs. promotion and other relevant factors such as supply and demand factors in the employment market.116 2.35% 7.949) 6.237 31 March 2011 28.183.861.SKOL Breweries Limited Annual Report 2011-12 2.50% 11% for Executives 7% for Others 19% for Executives 2% for Workers 58 Years 31 March 2011 8.329) 29.15% 7. 55 .50% 10% for Executives 7% for Others 21% for Executives 2% for Workers 58 Years The estimates of future salary increases.746.458 2. Notes to the financial statements Changes in the fair value of plan assets Particulars Opening fair value of plan assets Expected return on plan assets Actuarial (loss)/ gain on plan assets Contributions by employer Benefits paid Closing fair value of plan assets For the year ended For the year ended Rs.

399) (250.381.137 28. The Company therefore believes that it is not practicable to provide segment disclosure relating to such expenses and accordingly such expenses are separately disclosed as unallocated and directly charged against total income.222.094 16.972 29.33.SKOL Breweries Limited Annual Report 2011-12 2.785) (293.268.489.430) (593.295.375.045.036.739.366. Consequently.152.817. trade receivables and loans and advances.598. Certain segment assets and liabilities are directly attributable to the segment.056) 564.519. Income and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment. Geographical segments The Company operates in two principal geographical areas of the world: India and Rest of the world. Notes to the financial statements Amounts for the current and previous four years Particulars As At 31 March 2012 As At 31 March 2011 As At 31 March 2010 As At 31 March 2009 As At 31 March 2008 Rs.980.021 77. Certain expenses are not specifically allocable to the individual segments as these expenses are common in nature.985) (2.555 (52.093 For the year ended 31 March 2011 14. Segmental reporting Business segments The Company's sole business segment is 'Manufacture and Sale of Beer'.697.263 62.679) 4.999 320.458 (48. Rs.237 (81.667 32.707) 2. Segment assets include all operating assets used by the segment and consist principally of fixed assets.919.540 22.491.181 4.337.856.154 (44. the requirement for separate business segment disclosures as required under AS 17 .056) 641.454.065) (148. inventories.116 (66.776.415. Certain assets and liabilities that are not specifically allocable to the individual segments have been separately disclosed as unallocated.939 18. Revenue (net of duties.791 75.483.370.784 223.118 14.994. taxes and discount) For the year ended 31 March 2012 16.930. Defined benefit obligation Plan assets Deficit Experienced adjustments on plan liabilities Experienced adjustments on plan assets 114.'Segment Reporting' is not applicable.949) 96. The accounting principles used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments.341.845.856) (3. Segment liabilities include trade payables and other operating liabilities and provisions. while the remainder of costs are apportioned on an appropriate basis.902 India Rest of the world 56 .

297 (99.392) 308.SKOL Breweries Limited Annual Report 2011-12 2.165.222 39.624) 54.990.675 Rs. Rs.018 57 .240 285.653.863 20.949 674.165. Provision for claims The provisions are utilised to settle previously anticipated and determined adverse outcomes of legal cases against the Company. The provision is based on independent advice obtained by the Company from external legal counsel. The time frame of utilisation of the provision is determined by the course of the legal proceedings. Capital expenditure (on cash basis) India Rest of the world As at As at 31 March 2012 674.171.883 13.007.863 As at 31 March 2011 18.480 72.605.091 39.158. Particulars For the year ended 31 March 2012 For the year ended 31 March 2011 Provision for indirect-tax cases Opening balance Add: Addition during the year Less: Unused amounts reversed during the year Closing balance Provision for water charges Opening balance Add: Opening balance of the Demerged Undertaking Add: Addition during the year Less: Utilised during the year Closing balance 86.178.823 (11.262 363.915.698.667 2.222 371.760.609. Segment asset India Rest of the world As at 31 March 2012 20.242.178.377 3.849.688. Notes to the financial statements Rs.813.372.367 27.518.007.896) 285.638.018 34.949 31 March 2011 794.643.298 18.218 256.622.934.34.849.667 794.252.698.172.688.339 86.592 (10.072.

The Honourable Allahabad High Court has upheld the validity of the levy of entry tax and the VAT Authorities have encashed bank guarantees provided by the Company in lieu of entry tax for the period July 2009 to November 2011. 7. the Association has given a representation on behalf of the Company for waiver of interest demanded by MIDC. Value Added Tax ('VAT'): The Andhra Pradesh VAT authorities had raised a demand to levy VAT on sale of spent malt (residue product arising from the beer manufacturing process) for the period from April 2003 to March 2005 and January 2009 to December 2010. The Honourable High Court of Bombay has passed an order against the appeal and has directed the Association to release the demand amount with retrospective effect.008.588.144) towards entry tax on barley procured from other states.395 (previous year: Rs. B. However with respect to interest. As the rules may have retrospective effect. Based on an assessment of possibility of collection of the EVC. The Company has filed an appeal and the matter is pending before the Tribunal. Accordingly the Company has made the payment of the principal amount outstanding. From December 2011 onwards.700 against the said liability. Entry Tax: (i) The Government of Haryana has abolished the local area development tax ('LADT') and has introduced entry tax on inter-state purchases. 58 . However from January 2011 onwards. The Company has made additional provision of Rs. the Company has started paying VAT under protest with a corresponding provision for the same on a monthly basis.SKOL Breweries Limited Annual Report 2011-12 2. Details of amounts reversed during the year: Based on the outcome of the various other miscellaneous matters. the Company has reversed the provisions amounting to Rs.392 during the current year.370. During the current year the Company has made an additional provision for Rs.667. C. the Company has been paying entry tax under protest and is making a corresponding provision for the same.846 (previous year: Rs. (ii) Entry tax is a disputed matter in the state of Uttar Pradesh.550). Excise Duty: The Uttar Pradesh State Excise Department has raised a demand against non-submission of Excise Verification Certificates ('EVC') for the year 2010-11. the Company assesses the probability of an adverse outcome of the case and has accordingly made a provision. However. 10.813.651 during the year.6. the Company has provided Rs. the Government of Haryana is yet to frame rules for payment of entry tax due to which entry tax is not being paid. 1. The EVC are required to be submitted to the department within 90 days from the date of sale. 26. During the year the Company has provided for Rs. Provision for water charges The Maharashtra Industrial Development Corporation ('MIDC') had. Notes to the financial statements Provision for indirect-tax cases Details of provisions made during the year: A. 1. vide order number EE/E&M/785/2005 dated 25 May 2005.637. made a demand for increase in water charges with retrospective effect from 1 November 2011. The authorities had raised a demand including interest and penalty. Waluj Industries Association ('the Association') of which the Company is a member has filed a writ petition against such demand in the Honourable High Court of Bombay. 24.041.

439 31 March 2011 83.338.991.390. Birra Peroni SABMiller India Limited SABMiller Management (IN) BV SABMiller Africa & Asia (Pty) Limited SABMiller Vietnam SABMiller Europe AG SABMiller (Asia) Limited SABMiller International Brands Limited SABMiller African Breweries Limited Trinity Procurement GmbH SABMiller Management BV SABMiller India Holdings Austindia Pty Limited Key managerial personnel (ii) Related party transactions For the year ended For the year ended Paolo Lanzarotti. Managing Director Rs.696.679 164.538 - 59 .SKOL Breweries Limited Annual Report 2011-12 2.421.23 to the financial statements) Income from contract bottling Purchase of stock in trade Purchase of raw materials Sale of raw materials Reimbursement of expenses incurred on behalf of the Company Reimbursement of expenses incurred on behalf of other companies Loan repaid.A.284 6.337. Notes to the financial statements 2.267 43.p. Related parties (i) Names of related parties and description of relationship with the Company: Enterprises where control exists Ultimate holding company Holding company Significant influence SABMiller plc SABMiller Breweries Private Limited SABMiller Asia & Africa BV Other related parties with whom transactions have taken place during the year Fellow subsidiaries S.35.110.250 17. net Unsecured loan cancelled pursuant to Scheme of Arrangement 2.654 12. 31 March 2012 SABMiller Breweries Private Limited (Also refer to note 2.571 902.

979 649.812 2.618.875.667.031.184 4.037 1.733.854 3.333 600.SKOL Breweries Limited Annual Report 2011-12 2.861. wages and bonus SABMiller Vietnam Reimbursement of expenses incurred on behalf of other companies Purchase of raw materials SABMiller (Asia) Limited Reimbursement of expenses incurred on behalf of other companies SABMiller International Brands Limited Reimbursement of expenses incurred on behalf of other companies SABMiller African Breweries Limited Reimbursement of expenses incurred on behalf of the Company Trinity Procurement GmbH Commission paid on purchase of raw materials Paolo Lanzarotti Remuneration Advance given 38.371.871 1.252 710.318 251.846 999.866 27.253.375.933.A.896.430 1.236 60 .040 4.323 26.323 297. Birra Peroni Purchase of stock in trade SABMiller India Limited Interest expense Unsecured loan taken.078. For the year ended For the year ended 31 March 2012 SABMiller Asia & Africa (Pty) Limited Reimbursement of expenses incurred on behalf of the Company Reimbursement of expenses incurred on behalf of other companies Purchase of raw materials Purchase of stores and spares SABMiller plc Reimbursement of expenses incurred on behalf of the Company Reimbursement of expenses incurred on behalf of other companies SABMiller Management (IN) BV Management group service charge Reimbursement of expenses incurred on behalf of the Company S. Notes to the financial statements (ii) Related party transactions continued Rs.702.890 31 March 2011 6.632 2.259.848.482.450 306.p.736 2.890.701 426.534 289.284 61.288. net SABMiller Management BV Salaries.488 3.236 164.735 525.262 53.237.115 2.468 11.

300).282 710.648 8.441.250.095 63.332. As at As at 31 March 2012 SABMiller Breweries Private Limited Short-term borrowings SABMiller plc Short term loans and advances SABMiller Asia & Africa (Pty) Limited Other current liabilities SABMiller India Limited Long-term Borrowings SABMiller Management (IN) BV Other current liabilities SABMiller Europe AG Short term loans and advances SABMiller Vietnam Short term loans and advances SABMiller International Brands Limited Short term loans and advances SABMiller African Breweries Limited Other current liabilities Trinity Procurement GmbH Other current liabilities SABMiller Management BV Other current liabilities Paolo Lanzarotti Long-term loans and advances 127.770.515. 2. Notes to the financial statements (iii) Amount outstanding as at the balance sheet date: Rs. 61 .511 61.998.180.527 (iv) Corporate guarantees have been given by SABMiller plc for loan facility obtained by the Company as at the balance sheet date amounting to Rs.398. 4.891. costs of which are not re-charged to the Company.979 4.439 18.821.450 306.933.081.394 - 31 March 2011 2.207 1.574 54.671 2.SKOL Breweries Limited Annual Report 2011-12 2.916 49.289 18.237.065.338.590 (previous year: Rs.095 120. (v) SABMiller plc operates a variety of equity-settled share-based compensation plans for few select employees of the Company.511 18.430 120.472 220.

144 1.320 JPY 3.418 1.958 1. Derivative instruments and un-hedged foreign currency exposure Derivative instruments Particulars Purpose As at As at 31 March 2012 Forward contract Towards repayment of trade payables GBP 546.455.958 1.767. Deferred tax assets/ (liabilities) Particulars As at As at Rs.130.612 USD 2.218.473.958 - In view of the accumulated losses and in accordance with AS 22 .052 81.174.608.580. deferred tax assets on unabsorbed depreciation and other temporary timing differences have been recognised only to the extent of those timing differences.190 35.053 115.083 1.421 Deferred tax asset/ (liabilities).237.895.455 USD 5. 31 March 2012 Deferred tax assets Investments Trade receivables Loans and advances Provision for retirement benefits Provision for claims Unabsorbed depreciation Deferred tax liabilities Fixed assets 1.000 31 March 2011 Euro 997.000 USD 17.398.415.000 62 .499.455.872 41.SKOL Breweries Limited Annual Report 2011-12 2.37.421 31 March 2011 176.069.398.218.342.398.046 Forward contract Currency swap contract Towards repayment of interest on foreign currency loans Towards repayment of foreign currency loans JPY 247.284.007 JPY 3.950 JPY 231.500. 2.284.044.144 46.639.473.959 122. net 171.312 1."Accounting for taxes on income".636.288 USD 429.429.082 52.415.635.415.518.421 1.284.36. the reversal of which will result in sufficient taxable income.473. Notes to the financial statements 2.070 87.

Operating leases The Company is obligated under non-cancellable operating leases for a brewing facility and other office premises which are renewable at the option of both the lessor and lessee.953) (150. 79.484.218.675.118.318) As at 31 March 2011 Foreign currency Amount (Rs. Notes to the financial statements Un-hedged foreign currency exposures Underlying asset/liability As at 31 March 2012 Foreign currency Amount (Rs.192 JPY 4.411) (16.332 EURO 25.260.SKOL Breweries Limited Annual Report 2011-12 2.120.180 (previous year: Rs.579 3.075.251.600. 2.298 (761.310 ZAR 1.851 USD 91. Total rental expense under cancellable operating leases amounted to Rs.320.647 3. 2006.933) (710. Small and Medium Enterprises Development Act.163 - The Company is also obligated under cancellable lease for residential and office premises and motor vehicles which are renewable at the option of both the lessor and lessee.685 USD 78.373 CHF 49.770.741) Rs.372. Total rental expense under non-cancellable operating leases amounted to Rs.415) (1.38.589) (8.294.678.916) (282. Future minimum lease payments under noncancellable operating leases are as follows: Rs.090 ZAR 14.525.39.518.450.791.738 USD 6.054 ZAR 7.176 2.059 EURO 238. 96.808) (527. 95. 63 . Balances with banks Trade receivables Trade payables Payable to related parties 2. the Company has prepared the following disclosure as required under the said Act.948 GBP 7.817.750 - 31 March 2011 77.) amount USD 73.440 USD 2.450) (129.911.180) for the year ended 31 March 2012.351.289) for the year ended 31 March 2012. Based on the confirmations received from the suppliers who provide goods and services to the Company regarding their status under the Micro.268) (269.400 21.663 (previous year: Rs.762 USD 17.118.180 125.798) (53.332. Period As at As at 31 March 2012 Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years 70.77.413 55.) amount USD 480.453) (2.882 (4. The Company however has not received any claim for interest from any supplier under the said Act.

2.465.563 - 181. SABMiller plc ('the Group') operates a variety of equity-settled share-based compensation plans for the employees of the Company. (i) During the year ended 31 March 2012.326 2. Employee stock compensation cost Guidance Note on "Accounting for Employee Share Based Payments" issued by the ICAI ('the Guidance Note') establishes financial and reporting principles for employees share based payments plans. 31 March 2011 28.41. particularly on the amount of tax expense and that of provision for taxation. Opening balance of Amalgamation adjustment reserve account represents excess of the carrying value of investments. Reversal of impairment loss During the year ended 31 March 2008.40.960.148 1.794. and (v) The amount of further interest remaining due and payable even in the succeeding years.178 2. However during the year. until such date when the interest dues as above are actually paid to the small enterprise.532 2.103.43.SKOL Breweries Limited Annual Report 2011-12 2. The Guidance Note applies to employee share based payment plans. the erstwhile direct and step down subsidiaries ('Transferor Companies') of the Company were amalgamated into the Company. 64 .17. based on physical verification.047 147. the Company put to use certain items of fixed assets. the management had identified certain fixed assets as having been rendered redundant/ idle as a result of significant capacity expansions at certain breweries then and consequently recognised an impairment loss. (ii) The amount of interest paid by the Company along with the amounts of the payment made to the supplier beyond the appointed day during the year. over the share capital of the Transferor Companies. Accordingly. Particulars As at As at 31 March 2012 (i) The principal amount remaining unpaid to any supplier as at the end of each accounting year.941. which were impaired in earlier years. the management has reassessed the recoverable value of these assets and reversed an impairment loss amounting to Rs. The Company had accounted for amalgamation adjustment reserve as per the Scheme approved by the Honourable High Courts. (iv) The amount of interest accrued and remaining unpaid at the end of the year. Notes to the financial statements Rs.418 - 12.722. the Group had the following share-based payment arrangements for the employees of the Company. Amalgamation adjustment reserve account With effect from 21 May 2003. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax Act.42.515 1. Management is of the opinion that its international transactions are at arm's length so that the aforesaid legislation will not have any impact on the financial statements.283.108 being the lower of recoverable value or the carrying amount of fixed assets determined (net of depreciation) had no impairment loss been recognised in prior accounting periods. 2. (iii) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act. 1961. 2. the grant date in respect of which falls on or after 1 April 2005.

Notes to the financial statements Executive Share Option Scheme [Approved and (No 2) Scheme] Particulars As at As at 31 March 2012 Date of grant Number of shares granted Method of settlement Contractual life Vesting period Vesting conditions 1 June 2011 173.000 Equity 10 years 3 years Achievement of a target growth in earnings per share 65 .000 Equity 10 years 3 years Achievement of a target growth in earnings per share 31 March 2011 1 June 2010 9.150 Equity 10 years 3 years Achievement of a target growth in earnings per share 31 March 2011 1 June 2010 155.SKOL Breweries Limited Annual Report 2011-12 2.000 Equity 10 years 3 years Achievement of a target growth in earnings per share International Performance Share Award Sub-Scheme Particulars As at As at 31 March 2012 Date of grant Number of shares granted Method of settlement Contractual life Vesting period Vesting conditions 1 June 2011 Equity 10 years 3 years Achievement of a target growth in earnings per share 31 March 2011 1 June 2010 Equity 10 years 3 years Achievement of a target growth in earnings per share SABMiller plc Share Award Plan 2008 Particulars As at As at 31 March 2012 Date of grant Number of shares granted Method of settlement Contractual life Vesting period Vesting conditions 1 June 2011 9.

The options outstanding as at 31 March 2012 had a weighted average remaining contractual life of Nil years (previous year: 7. Notes to the financial statements (ii) Details of the activity of shares issued after 1 April 2005 under Executive Share Option Scheme [Approved and (No 2) Scheme] are as follows: Particulars 31 March 2012 Number of options Weighted average exercise price (Rs.750 16.000 6.218 24.286 1. 1.107 1.017 1.000 8.) - 31 March 2011 Number of options Weighted average exercise price (Rs.150 10.1 years).750 173.000 - 14.314 1.300) 14. The weighted average share price at the date of exercise for stock options exercised during the year was Rs. 1.000 1.893 (previous year: Rs.107 921 Outstanding at the beginning of the year Granted during the year Transferred in/ (out) during the year* Lapsed during the year Exercised during the year Outstanding at the end of the year Exercisable at the end of the year 374. 531 (previous year: Rs.) 961 1.672 1.850 * The options transferred represents options relating to employees transferred from companies within the SABMiller Group during earlier years.SKOL Breweries Limited Annual Report 2011-12 2.000 7. Nil (previous year: Rs.650 374.313 (924) 1.471). The estimate of fair value on the date of the grant was made using the Binomial model valuation and Monte Carlo model with the following assumptions: 66 .468 55.000 - The weighted average share price at the date of exercise for stock options exercised during the year was Rs.000 81.024 972 1.700 155.2 years). Nil).031 31 March 2011 Number of options Weighted average exercise price (Rs.168 364. The weighted average fair value of stock options granted during the year is Rs. The options outstanding as at 31 March 2012 had a weighted average remaining contractual life of 8.000 (49.) 1.117 1.) - Outstanding at the beginning of the year Granted during the year Transferred in during the year Lapsed during the year Exercised during the year Outstanding at the end of the year Exercisable at the end of the year 8.650 406.500 96. The details of the activity of shares issued after 1 April 2005 under International Performance Share Award Sub-Scheme are as follows: Particulars 31 March 2012 Number of options Weighted average exercise price (Rs.1 years (previous year: 8. 439).

667 Rs. However. has become applicable to the Company. Till the year ended 31 March 2011. During the year ended 31 March 2012.017) (2.325) (48. (iii) Since the Company uses the intrinsic value method. Nil 28.313/ Rs. 1.27% 31 March 2011 Rs.79) (2.515.Diluted For the year ended For the year ended 31 March 2012 (1. Particulars Net loss as reported Add: Employee stock compensation under intrinsic value method Less: Employee stock compensation under fair value method Proforma net income Earnings per share as reported . As per our report of even date attached for B S R & Co.Basic .377) (44.44. 1.21) (5. the Company was using pre-revised Schedule VI to the Companies Act 1956. the revised Schedule VI notified under the Companies Act 1956. Nil 26.01) (5. particularly presentation of balance sheet. The Company has reclassified previous year figures to conform to this year's classification.518) (5. 48814 for SKOL Breweries Limited Paolo Lanzarotti Managing Director Paul D'Silva Chief Financial Officer Harald Harvey Director Sridhar S Company Secretary Bangalore Date: 15 May 2012 Bangalore Date: 15 May 2012 67 .60) (2. 1.242.672/ Rs.58% The expected volatility was determined based on historical daily share price volatility of SABMiller plc share price.194.131. Notes to the financial statements Particulars Share price at the grant date Exercise price at the grant date Expected volatility Contractual life (vesting and exercise period) in years Expected dividends Average risk-free interest rate For the year ended For the year ended 31 March 2012 Rs. Applying the fair value based method defined in the said Guidance Note.48% 3.79) 2.936.311 Rs.Basic .563. for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. it significantly impacts presentation and disclosures made in the financial statements.372.70% 10 years 2.SKOL Breweries Limited Annual Report 2011-12 2.Diluted Proforma earnings per share . the impact on the reported net loss and earnings per share would be as follows: Rs.21) 31 March 2011 (601.193) (1. the impact on the reported net loss and earnings per share is computed by applying the fair value based method.384.01) (5.60) (2.640) (645. The Guidance Note requires the proforma disclosures of the impact of the fair value method of accounting of employee stock compensation in the financial statements.10% 10 years 2. 1. Firm registration number : 101248W Chartered Accountants Zubin Shekary Partner Membership No.35% 2.

105.162) (462.219) b 872.289.585.676) (778.991) (199.231 931.SKOL Breweries Limited Annual Report 2011-12 Cash flow statement For the year ended 31 March 2012 Cash flows from operating activities Loss before tax Adjustments: Depreciation Dividend income Interest and financing charges Interest income Loss/ (Profit) on sale/ adjustment of fixed assets Net gain on sale of investments Reversal of impairment loss Unrealised foreign exchange difference Operating cash flows before working capital changes Increase in trade receivables Increase in loans and advances Increase in inventories Increase in current liabilities and provisions Cash (used in)/ generated from operations Taxes paid.715 356.323 (789.842 380.363 (1.378.949) 3.483.432.623 (29.14.690.851.735 (28.641 (183.392.114.714.258. 48814 for SKOL Breweries Limited c d a+b+c+d 30.370.000) (36.814 (462.801.847.219 338.800 1.263 (356.289.191) 1.908) 550.103.577.419 (794.246 (338.849.203.423) in margin money deposit account. As per our report of even date attached for B S R & Co.579 2.858.232. For the year ended 31 March 2011 a Paolo Lanzarotti Managing Director Paul D’Silva Chief Financial Officer Harald Harvey Director Sridhar S Company Secretary Bangalore Date: 15 May 2012 Bangalore Date: 15 May 2012 68 .924.345 (659.585.219) 410.066.037.024 (560.321.769.511) 380.138 (10.368) (155.729.939.420 (214.232) (409.558.944 (17.271) Rs.639.348) (490.793.394) (20.626) (674.192.968 (1.000) (17.797) (105.866.320) 1.670) 606.109.691 (388.499.832) (286.640.539.244.314.525) 914.002.667) 1.141.250) (1.937.347) (290.446) 22.143) 950.193.443 (previous year: Rs.243) 772.755.320 10.376) (331.437) 103.645) (1. net of refund Net cash (used in)/ provided by operating activities Cash flows from investing activities Purchase of fixed assets Proceeds from sale of fixed assets Dividend income Interest received Sale of investments Net cash used in investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Interest and financing charges paid Net cash provided by/ (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents transferred on scheme of arrangement Cash and cash equivalents at the end of the year * Net decrease in cash and cash equivalents * Includes Rs.800) 801.108) (43.525.323) (603.922 462.105) 492.867.698.607 (19.801.757.049 (29. Firm registration number : 101248W Chartered Accountants Zubin Shekary Partner Membership No.115.666.037.702 178.830.511) 19.933.589.496.073.809.573.499. 23.387.300.305.623 260.

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sabmiller. Andheri (East). Andheri Kurla Road Survey No. 1021.400093 www. Mumbai . 2nd Floor Solitaire Corporate Park 10.SKOL Breweries Limited Unit No.A. Chakala.in . 131 .