1.SKOL Breweries LimitedBOARD OF DIRECTORS AUDIT COMMITTEE Mr. Ari Mervis ChairmanMr. Ari Mervis Mr. Jonathan Andrew KirbyMr. Jonathan Andrew Kirby Ms. Sue ClarkMr. Wayne Andrew HallAlternate Director Mr. T.S.R. Subramanian Mr. Paolo Alberto Francesco Lanzarotti Mr. Jean-Marc Delpon de Vaux - Upto 07.08.2009 Mr. Jean-Marc Delpon de Vaux Upto 07.08.2009 Mr. Wayne Andrew Hall - Alternate Director w.e.f. 10.11.2009 Mr. Paolo Alberto Francesco Lanzarotti REGISTERED OFFICE Managing Director w.e.f. 23.09.2009No.1, Mahal Industrial Estate Mr. Mathew James Dunn w.e.f. 02.07.2010Mahakali RoadAndheri (East) STATUTORY AUDITORS STATUTORYMumbai - 400093 B S R & Co., Chartered AccountantsCORPORATE OFFICECORPORATE Maruthi Info-Tech Centre Jalahalli Camp Road 11-12/1, Inner Ring Road Yeshwanthpur Koramangala, Bangalore 560071Bangalore - 560022BANKERS Standard Chartered Bank Royal Bank of Scotland Citi Bank N.A. First Rand Bank Limited ICICI Bank LimitedREGISTRAR AND SHARE TRANSFER AGENT Sharepro Services (India) Pvt Ltd Samhita Warehousing Complex Gala No- 52 to 56, Bldg No. 13 A-B Near Sakinaka Telephone Exchange Andheri Kurla Road, Sakinaka Mumbai 400072 UNITS Charminar Breweries, Medak, AP Haryana Breweries, Sonepat, Haryana Mysore Breweries, Bangalore, Karnataka Pals Distilleries, Aurangabad, Maharashtra Rochees Breweries, Neemrana, Rajasthan Central Distilleries & Breweries, Meerut, UP East Coast Breweries & Distilleries, Cuttack, Orissa Malabar Breweries, Chalakudy, Kerala SICA Breweries, PondicherrySKOL Breweries Limited

2. Notice 6-7 NOTICE is hereby given that the 21stSpecial Business: Annual General Meeting of the members of the Company will be held at M.C. Ghia05. To consider appointment of Hall, Bhogilal Hargovindas Building,Mr. Mathew James Dunn as 2nd floor, 18/20, K. Dubash Marg, BehindDirector of the Company. Prince of Wales Museum, Kala Ghoda, Mumbai 400 001 on Wednesday, theTo consider and if thought fit, 18th August, 2010 at 3.00 p.m. to to pass, with or without transact the following business:modification(s) the following Resolution as an Ordinary Ordinary Business:Resolution:01. To receive, consider and adopt theRESOLVED THAT Mr. Mathew RESOLVED THAT Audited Balance Sheet as at 31stJames Dunn, who was appointed as March, 2010 and the Profit & Loss an additional Director of the Account for the year ended on thatCompany by the Board in terms of date and the Report of the DirectorsSection 260 of the Companies Act, and Auditors thereon. 1956 holds office till the date of this Annual General Meeting, and in 02. To consider and, if thought fit, to respect of whom a notice has been pass, with or without modification(s),received from a member under the following resolution, in respect of Section 257 of the said Act, be and the vacancy caused by the is hereby appointed a Director of the retirement of Mr. Jonathan Andrew Company liable to retire by rotation. Kirby, who retires by rotation and has expressed his desire not to seek06. To consider the contribution made re-appointment, which is notunder Section 293(1)(e) of the proposed to be filled up, as an Companies Act, 1956. Ordinary Resolution. To consider and if thought fit,RESOLVED THAT Mr. JonathanRESOLVED THATto pass, with or withoutAndrew Kirby, who retires by modification(s) the followingrotation and has expressed his Resolution as a Special Resolution.desire not to seekre-appointment, shall not be RESOLVED THAT pursuant to the RESOLVED THATre-appointed and the vacancy provisions of Section 293(1)(e) andthereby caused shall not beother applicable provisions, if any, offilled up. the Companies Act, 1956, the contribution of Rs.1.3 Crores made 03. To appoint a Director in place of by the Company for the Chief Mr. T S R Subramanian, who retiresMinisters Relief fund over and by rotation at this meeting and above the ceiling limits as being eligible, offers himself forprescribed under the said Act be re-appointment. and is hereby ratified.04. RESOLVED THAT M/s. B S R & Co, RESOLVED THAT BY ORDER OF THE BOARD Chartered Accountants (ICAI firm registration number 101248W), Paolo Alberto Francesco Lanzarotti who retire at the conclusion of thisManaging Director Annual General Meeting be and are hereby appointed as Statutory Place : Gurgaon Auditors of the Company till theDate : 2 July, 2010 next Annual General Meeting at remuneration to be fixed by the Board of Directors and billed progressively. 2.3 million living with HIV with majority infection between 15-49 age group. 3. In 2007 SABMiller India launched its HIV/AIDS initiative and launched its internal awareness programme.NOTESExplanatory Statement pursuant toSection 173(2) of the Companies Act, 01. A member entitled to attend and1956. vote at the meeting is entitled to appoint a proxy to attend and vote Item Nos. 2, 3, 5 and 6 on a poll in his/her stead. A proxyA brief resume of the Directors offering need not be a member of thethemselves for re-election is given below: Company. Proxies in order to be effective must be deposited at the 02. Mr. Jonathan Andrew Kirby is a registered office of the Company B. Accounting (University of the not less than forty-eight hoursWitwatersrand), CA (SA) and before the meeting. A blank proxyhas 23 years of rich experience. form is enclosed.He is the CFO of SABMiller Africa. 02. The Register of Members and theExcept Mr. Jonathan Andrew Kirby, Share Transfer Books of theno other Director is interested in the Company will remain closed fromaforesaid Resolution. 16th August 2010 to 18th August 2010 (both days inclusive).03. Mr. T.S.R. Subramanian is a Diplomain Mathematics from Imperial 03. For convenience of members anCollege, London and has done his attendance slip is also annexed. Masters in Public Administration Members are requested to affix their from Harvard University. He is an signature at the space providedEx IAS officer who held various therefore and hand over the same atsenior positions in the Government the place of Meeting. The proxy of a including the post of Cabinet member should mark on theSecretary to the Government of attendance slip as Proxy. MembersIndia. are also requested to bring their copies of the Annual report to the Except Mr. T.S.R. Subramanian, of the Companies Act, 1956. Hence venue of the Meeting.no other Director is interested in the the resolution is placed before youaforesaid Resolution.for your ratification. 04. All queries relating to non-receipt of share certificates after transfer/ 05. Mr. Mathew James Dunn is an EnglishThe Board recommends the adoption of transmission/dematerialization/Literature and Language graduate the resolution. rematerialisation, mandates, changehaving 12 years rich experience in the of address, nomination etc. may be field of Financial Management. He hasheld number of senior financeBY ORDER OF THE BOARD sent to the Registrar & Share Transfer Agents, M/s Sharepropositions in the SABMiller group Paolo Alberto Francesco Lanzarotti Services (India) Pvt. Ltd, Samhita during the period 2002-09. Prior toManaging Director Warehousing Complex, Gala No-52joining us, he worked with EMI Registered Office: to 56, Bldg No.13 A-B, NearRecords as Finance Director for theirNo.1, Mahal Industrial Estate, Sakinaka Telephone Exchange, Catalogue Division.Mahakali Road, Andheri (East), Andheri Kurla Road, Sakinaka,Except Mr. Mathew James Dunn, no Mumbai 400 093 Mumbai - 400072, Telephone: 022- other Director is interested in the 67720300/67720400aforesaid Resolution.Place : Gurgaon Fax No: 022-28591568/28508927,Date : 2 July, 2010 E-mail: sharepro@shareproservices.com 06. During the year 2009-10 the Statesof Andhra Pradesh and Karnataka 05. Pursuant to Section 205C of thewere hit by the worst floods in the Companies Act, 1956 all unclaimedlast 60 years. The flood fury caused dividends/ unclaimed matured extensive damage to human life and deposit upto the Financial Yearproperty. Your Company has 2002-03 have been transferred to breweries in both these States and the Investor Education and is operating at capacity. As a good Protection Fund. It may be noted corporate citizen, the Company has that no claims shall lie against the contributed sums amounting to Company or the Fund in respect ofRs.1.3 Crores to Andhra Pradesh & individual amounts which wereKarnataka Chief Ministers Relief unclaimed and unpaid for a period of Fund which exceeds the limits as 7 years and transferred to the Fundprescribed under Section 293(1)(e) and no payment shall be made in respect of any such claim.SKOL Breweries Limited 4. 8-9 SABMiller partned with ILO for the workplace programmes on HIV/AIDS. Workplace policy launched training tool like audio visual aids, display materials, other messaging tools such as card games were introduced. Awareness sessions within work hours, posters, media clippings, internal newsletters were also launched. 5. Directors ReportDear Members, Your Directors have pleasure in submitting their report and the Statement of accounts for the year ended 31st March 2010. RESULTS FINANCIAL RESULTS (Rupees in Crores) Year YearFinancial Year Financial Year 2009-20102008-2009Gross Revenue2116.082173.01Profit/(Loss) before taxation(142.24) (72.57)Less: Provision for taxation(0.01) (7.70)Profit/(Loss) after taxation (142.26) (64.88)Surplus/(deficit) brought forward from previous year (160.09) (95.22)Balance carried to Balance Sheet (302.35) (160.09) OPERATIONS OPERATIONS The turnover of your Company during the year 2009-10 has decreased by 2.62% over the previous year to Rs.2116 crore from Rs.2173 crore. This was primarily on account of the companys poor performance in the first half of the year, wherein The AP Beverage Corporation had not placed orders because the company had chosen to go to court to obtain a much needed price increase. A quarter-wise comparison with the previous year will indicate that the company has caught up and in fact made substantial improvement in the third and fourth quarters.(Rupees in Crores) Period Year Financial YearYear Financial Year2009-2010 2008-2009April June578.50647.19July September447.36478.08October December482.01475.47January March 608.21572.27Full year 2116.082173.01The stand taken by the company has been vindicated and the company has received a price increase in Andhra Pradesh from the state canalising agency after a gap of about five years. As the price increase was received only in the month of February 2010, notwithstanding the same the Company reports a loss for the year on account of the following:The company was prevented from selling its products for 3 months during the peak period in the States of Andhra Pradesh and Uttar Pradesh due to regulatory constraints. High cost of recycled containers on account of depletion of the container pool and also hoarding by traders has resulted in higher input costs leading to erosion of gross margins. A sum of Rs.77.17 crores has been invested in upgrading existing plant and machinery and in developing capacity. There has also been continuous upgrading and implementation of best practices at all units to increase productivity and bring down the cost of production. We make a living by what we do, but we make a life by what we give. SKOL Breweries Limited 6. Directors Report 10-11 In the meanwhile the Andhra PradeshWater issues are by nature cross-community and cross boundary and therefore State has revised its procurement policy cannot be managed simply within the fence lines of our own operations. Therefore, for procurement of beer. The company we have started external interventions in partnerships with NGOs, communities and believes that this policy is detrimental and local governments striving to build long term sustainable partnerships to address hence is examining its options and has local water issues. initiated action as legally advised.We have completed watershed mapping for four sites in India and are moving Your Board enjoys the unqualifiedtowards a country wide structured watershed mapping process to understand the support of all its financiers whosewater availability and quality across all our operations for future business planning. confidence in the future of your company The data will also be used to assess the opportunity to manage these watersheds for is evidenced by the fact that allthe long term sustainability of the community. borrowings have been made without the bankers taking any charges over any of your companys assets. As such the majority of the borrowings are short term and renewed from year to year. Observations of the auditors are self explanatory. DIVIDEND As the Company has incurred loss during the year, the Directors do not recommend any dividend on the equity capital. WATER MANAGEMENT IN INDIA SABMiller Indias 5R Water Strategy SABMiller Indias water management initiatives are well underway. In line with the groups priorities and given the fact that water is a stressed resource in some of our key areas of operation, its potential scarcity and quality are becoming increasingly critical issues of immediate relevance. It is one of SABMiller Indias top sustainable development priorities. In India the Implementation of our 5R strategy has seen internal measures to reduce, recycle and reuse water at all the SABMiller India breweries. Our operations have been engaged in consistently reducing water consumption in the brewing process year on year. The trends indicate a reduction in overall water consumption from 6.4 HL/ HL in F08 to 5.23 HL/HL in F10. Let us all take more responsibility, not only for ourselves and our families but for our communities and our country. 7. We are clear that our business is not something separate from society. It is, at one and the same time, an employer, a customer, a supplier and a taxpayer.Water Harvesting Initiatives in Orissa The company has also supported construction of five water harvesting structures (WHSs) in the Cuttack district of Orissa, improving the water availability in the region for agriculture which is the main source of livelihood for the community. These projects benefit a population of approx. 10,000 farmers of Water recharge structure at Alwar, Rajasthan1500 families in 23 villages. The Land coverage is expected to be 560 Hectares (1400 acres). This activity is expected to support irrigation and domestic use. It is estimated that after commissioning of Watershed Management Project atof water a year - the same amount as WHSs, water level will raise in drinking Neemrana, Rajasthanextracted by the brewery - spread over water sources viz. hand pumps anda catchment expanse of about 120 surface water sources like ponds, tanks We have embarked upon a watershedhectares. This recharge will augment the etc. management project near our Rocheeslocal groundwater resources in theregion. The recharge initiative assumes aApart from the above, these WHSs will Brewery in the water stressed region ofgreater significance since the overall be helpful in restoring and rejuvenating the Alwar district, Rajasthan in Northern Indiaincidence of irrigation throughdegraded forest resources of the area. in collaboration with CII (Confederation ofgroundwater has increased in the regionThe structures have been constructed Indian Industry) and ACWADAMfurther stressing the resource. Thewith the participation of local people and (Advanced Center for Water Resources will be managed and maintained by the Development and Management) launched strength of the project lies among other community. in October 2008, the initiative covers things in establishing an approximate about 30 villages within an aproximate water balance of the region at the very radius of 7 km (15,000 hectares) aroundstart of the project so that a substantial the brewery and is currently the largest inengagement with the community can this region. As of now three check damsbegin based on empirical findings. have been constructed in a wasteland More sites which support natural area to trap the water that wouldrecharge and where such structures can otherwise have simply run off andpotentially be constructed are being facilitate natural recharge. These are identified. expected to recharge 300 million litersWater harvesting structures in Cuttack, Orissa Accumulating concepts and ideas will make you an intelligent person, but to be a great person you must utilize that intelligence to have a beneficial impact on our society. SKOL Breweries Limited 8. Directors Report 12-13 Interventions with supply chain (Truckers) (Truckers) Moving ahead with its awareness initiative, the company has launched initiatives for its supply chain i.e. truckers who spend on an average 4-8 hours per day at the brewery. The programme titled Water resource management through Workplace Initiatives Humsafar (The Companion) was community participation, Medak, In 2007, SABMiller India launched its launched in 2007 at one of the companysPradesh. Andhra PradeshHIV/AIDS initiative in partnership with the biggest breweries, Rochees Breweries in Similar initiatives are on in the water International Labour Organisation and Rajasthan. The programme was further stressed area of Medak district inbegan with an internal awarenessextended to SICA (Pondicherry) and Andhra Pradesh to build capacity of the programme for its employees.Mysore Breweries (Bangalore) in community to develop sustainable waterThe focus of this initiative was to createSouthern India in 2008. management practices and enhanceawareness amongst internal audiences, groundwater availability throughdispel myths creating a fear psychosisThe interventions are conducted by local improved water use efficiency. Four through dissemination of correctpartner NGOs along with the companys villages from where most of our workers information and build empathy towards employees. The in-house Master Trainers in the brewery originate have beenHIV-positive people.and 150 Peers support the interventions identified for this project. Theduring company hours. HIV/AIDS Workplace Programme interventions being conducted under the Information, education and multi-lingual leadership of ICRISAT (International Crop The HIV/AIDS workplace programme communication materials designed and Research Institute for Semi Arid Tropics) adopted by the company recognizes provided by the ILO and National Aids include enhancing rainwater that ignorance and lack of correct Co-ordination Committee are used in conservation, improving water use information about an issue such as HIV/ these interactions which are carried out efficiency and managing water demand, AIDS is dangerous and precludes early at the breweries and at other locations while improving the livelihood andand accurate diagnosis and therefore where truck drivers halt frequently for promoting a shift towards less waterprompt and appropriate care. There is sufficient duration, for instance food crops.communication to all employees through places along the highway. Since literacy workshops, intranet, notice boards, HIV/AIDS PROGAMMESrates amongst truckers are low, mass induction manual etc. A core committee media tools such as films, videos, Driving efficiencies throughon HIV/AIDS comprising senior games etc. are widely used. Stakeholder partnershipsmembers of the management and led by the Managing Director reviews the The programme has a very strong HIV/AIDS is a key component ofprogramme regularly.referral component where the target SABMillers Sustainable Development populations are encouraged to avail of framework. SABMiller Indias programmeThe workplace programme is conducted the free counseling and testing services is in line with the companys globalmainly by in house Master Trainers and made available by the government and priorities. peers. They conduct regular interactive local NGOs. There are plans to extend sessions to inform and educate the India Scenariothe initiative to two more breweries companys employees about HIV/AIDS. this year. HIV/AIDS is one of the most important Many of our breweries have Condom development challenges facing India.Vending machines installed on premise The programme so far has reached to SABMiller India recognizes that HIV/to highlight their importance in4000 truckers through one to one and AIDS can be a major threat to the workprevention. group discussions and 7000 condoms place, affecting the most productivehave been disbursed through social segment of the work force and imposingmarketing. The programme has referred huge costs on enterprises. It can also400 truckers to local hospitals and lead to loss of skills and experience and nearby Integrated Counseling and henceforth decline in productivity. Testing Centers. 9. SABMIller provided farmers training, technical assistance and other support needed to grow barley, a crop not normally produced in this part of the country.Recognitions approval of the Central Government onDIRECTORS RESPONSIBILITYthis application is awaited. ObservationsSTA STATEMENT U/S 217 (2AA) OF THE SABMiller India has been recognized byof the auditors are self explanatory.COMPANIES ACT, 1956. COMPANIES ACT, the ILO as a corporate partner that has made valuable contributions to the AUDIT COMMITTEEYour Directors state that: National AIDS Control Programme.Pursuant to the provisions of Section1.The financial statements have been The company has also received292A of the Companies Act, 1956 theprepared in conformity with the endorsements from the localAudit Committee has been re-constituted. generally accepted accounting governments appreciating andOn account of resignation of Mr. Jean- principles and applicable accounting recognising the companys efforts.Marc Delpon de Vaux, the present standards in India. Moving on Extending reach, members of the Committee areMr. Jonathan Andrew Kirby, Mr. Paolo 2.The Directors have selected such targeting farmers and liquor retailAlberto Francesco Lanzarotti and accounting policies as are applicable outletsMr. Ari Mervis. Mr. Jonathan Andrewand have applied them consistently Expanding the programme to its keyand made reasonable and prudentKirby, Chairman of the Audit Committee stakeholders, SABMiller India now plans judgment and estimates so as towas present at the last Annual General to extend its HIV/AIDS programme to give a true and fair view of the stateMeeting. Mr. Wayne Andrew Hall was farmers enrolled under its Barley of affairs of the company at the endappointed as an Alternate Director on Development Programme (Saanjhiof the financial year and of the profit10th November, 2009 to Mr. Jonathan Unnati) in Rajasthan and to retail outletsor loss for the year.Andrew Kirby. As such he now Chairs the in Karnataka.Audit Committee Meeting on behalf of 3.The Directors have taken proper DIRECTORSMr. Jonathan Andrew Kirby. and sufficient care for theAUDITORS maintenance of adequate In accordance with the Articles of accounting records in accordance Association, Mr. Jonathan Andrew KirbyM/s B S R & Co., Chartered Accountants,with the provisions of the and Mr. T.S.R. Subramanian, Directors ofretiring Auditors, have signified theirCompanies Act for safeguarding the the Company retire by rotation at thiswillingness to be reappointed as assets of the company and for Annual General Meeting and beingStatutory Auditors of the Company. preventing and detecting fraud and eligible, Mr. T.S.R. Subramanian offerThey have confirmed that their other irregularities. himself for re-appointment andreappointment if made will be within the Mr. Jonathan Andrew Kirby does not4.The financial statements have beenlimits prescribed under Section 224(1B) offer himself for re-appointment. prepared on the basis of Goingof the Companies Act, 1956. Your Mr. Jean-Marc Delpon de Vaux has Directors recommend their appointmentConcern considering the ability of resigned as a Managing Director of the at the ensuing Annual General Meeting. the Company to carry on its Company w.e.f. 7th August, 2009. Thebusiness in the foreseeable future.PUBLIC DEPOSIT Board places on record the meritoriousACKNOWLEDGEMENT services rendered by Mr. Jean-Marc During the year, the Company has not Delpon de Vaux during his tenure asaccepted any public deposits as definedYour Directors wish to place on record Managing Director of the Company.in the Companies (Acceptance oftheir appreciation to employees at allDeposits) Rules, 1975. levels for their co-operation. The Mr. Wayne Andrew Hall was appointed Directors would also like to acknowledge as an Alternate Director on 10th PARTICULARS OF EMPLOYEES ARTICULARSthe continued support of the companys November, 2009 to Mr. JonathanBankers, Distributors, Shareholders,The details of employees covered under Andrew Kirby. Customers and Suppliers.the provisions of Section 217 (2A) of the Mr. Mathew James Dunn was appointedCompanies Act, 1956 and the rules as an additional Director of the Company framed there under, as amended to date FOR AND ON BEHALF OF THE BOARD on 2nd July, 2010, whose term of officeare attached herewith. expires at this Annual General MeetingCONSERVCONSERVATION OF ENERGY AND T S R Subramanian and is eligible for re-appointment.TECHNOLOGY ABSORPTIONPaolo Alberto Francesco Lanzarotti Mr. Paolo Alberto Francesco LanzarottiThe statement pursuant to Section 217Place : Gurgaon was appointed as Managing Director(1) (e) of the Companies Act, 1956 readDated : 2 July, 2010 w.e.f. 23rd September, 2009 and anwith the Companies (Disclosure of application has been made to CentralParticulars in the Report of Board of Government seeking their approval forDirectors) Rules, 1988 to the extent the appointment and also the payment ofapplicable are set in the annexure hereto. remuneration payable to him. TheTreat people as if they were what they ought to be, and help them become what they are capable of being. SKOL Breweries Limited 10. Directors Report 14-15COMPANIESPAR ARTICULARSREPORT DISCLOSURE AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF DIRECTORS) RULES, 1988.A. CONSERVATION OF ENERGYCONSERVEnergy efficiency in breweries is achieved through a process of continuous improvement. The Company is in the process ofstandardizing energy efficiency measures across its breweries to further reduce the specific energy requirement in brewing.MANUFACTUREDSTEAM ENERGY PER HL OF BEER MANUFACTUREDMANUFACTURED ELECTRICITY PER HL OF BEER MANUFACTURED25020 20015 15010 10050 5 0.00.0 F05F06 F07 F08F09 F10 F05 F06F07 F08 F09F10 Steam Energy Requirement (MJ/HL) Steam Energy Requirement (MJ/HL) The Company has commissioned a can 1. Aggressive target setting inB. FOREIGN EXCHANGE EARNINGS line in its unit at Sonepat incorporating breweries based on extensiveAND OUTGO flash pasteurisation technology. This isbenchmarking against global During the year, the Company has earned for the first time in India that such a standards across SABMiller group. Rs.19.14 Crores in foreign exchange technology is used for packaged beer2. Flash pasteurization technology earnings. An amount of Rs.60.50 Crores other than draught beer. This technology employed on the latest can line atwas incurred in foreign exchange. apart from using lesser amount of water helps save energy as well.the unit in Sonepat.The Company is actively evaluating 3. Mash filter technology successfully FOR AND ON BEHALF OF THE BOARD greener technologies for introduction indeployed and ramped up at the unit its breweries. Some of thesein Sonepat. T S R Subramanian technologies are not prevalent in Indian 4. Increasing use of treated waste Paolo Alberto Francesco Lanzarotti breweries because of various barriers,water for utilities like cooling tower one of them being high capital cost.Place : Gurgaon apart from use in gardening inside company premises. Dated : 2 July, 2010 The possibility of availing Carbon Credits would certainly help the company in5. Continuously focus on the 5R pursuing greener technologies otherwise strategy for water usage unsustainable due to high costs.improvement.A summary of the major measures taken by the Company at its various units are as under- A society cannot be truly successful with a mentality that every company should only worry about themselves and in the end things will work out for the best. Community service is about building a stronger community whether on campus, in your neighborhood, city, state, or any other type of community. 11. Recognizing the developmental opportunities that existed in the Indian Barley Industry in terms of product quality, supply chain and farm productivity and realizing the need to improve the quality of the barley supply chain, SABMiller India envisioned & initiated, the Progress through Partnership (Saanjhi Unnati) program in the State of Rajasthan in 2005.SKOL Breweries Limited 12. Auditors Report 16-17 To the Members of SKOL BreweriesBreweries (ii)in our opinion, proper books ofaccounts give the information Limitedaccount as required by law haverequired by the Companies Act,been kept by the Company so far1956, in the manner so required and We have audited the attached balanceas appears from our examination of give a true and fair view in sheet of SKOL Breweries Limitedthose books; conformity with the accounting (the Company) as at 31 March 2010, principles generally the profit and loss account and the cash (iii) the balance sheet, the profit and accepted in India: flow statement for the year ended on loss account and the cash flow that date annexed thereto. statement dealt with by this reporta. in the case of the balance sheet, These financial statements are the are in agreement with the books of the state of affairs of the responsibility of the Companysof account; Company as at 31 March 2010; management. Our responsibility is to(iv)in our opinion, the balance sheet, the b. in the case of the profit and loss express an opinion on these financialprofit and loss account and the cashaccount, of the loss of the statements based on our audit.flow statement dealt with by this Company for the year ended on We conducted our audit in accordance report comply with the accounting that date; and with auditing standards generallystandards referred to in sub-section(3C) of Section 211 of the c. in the case of the cash flow accepted in India. Those standardsCompanies Act, 1956;statement, of the cash flows of require that we plan and perform thethe Company for the year ended audit to obtain reasonable assurance(v) on the basis of written on that date. about whether the financial statementsrepresentations received from the are free of material misstatement.directors of the Company as on An audit includes examining, on a test31 March 2010, and taken onfor B S R & Co. basis, evidence supporting the amountsrecord by the Board of Directors, and disclosures in the financialFirm registration number: 101248Wwe report that none of the directors statements. An audit also includesChartered accountantsis disqualified as on 31 March 2010 assessing the accounting principles usedfrom being appointed as a director Zubin Shekary and significant estimates made byin terms of clause (g) of sub-sectionPartner management, as well as evaluating the(1) of Section 274 of the CompaniesMembership No. 48814 overall financial statement presentation.Act, 1956; We believe that our audit provides a reasonable basis for our opinion.(vi)as stated in note 17 of Schedule 18 Bangaloreof the financial statements, 2 July 2010 As required by the Companies (Auditorsmanagerial remuneration amounting Report) Order, 2003, as amended,to Rs. 7,044,961 is in excess of the (the Order) issued by the Centrallimits prescribed in Section II of Government of India in terms of sub-Part II of Schedule XIII to the section (4A) of Section 227 of theCompanies Act, 1956. However, the Companies Act, 1956, we enclose in theCompany, on its part has already Annexure a statement on the mattersapplied to the Central Government specified in paragraphs 4 and 5 of theon 17 December 2009, in Order.accordance with provisions of the Further to our comments in the AnnexureCompanies Act and the approval is referred to above, we report that: awaited; and (i) we have obtained all the information (vii) subject to our comments in and explanations, which to the bestparagraph (vi) above, in our opinion of our knowledge and belief were and to the best of our necessary for the purposeinformation and according to the of our audit;explanations given to us, the said 13. Despite the often challenging economic conditions we do not comprise on our commitment to our communities. It is a core part of our business. Annexure to the Auditors reportAnnexureAuditors reportiii. (a) The Company has not granted any(b) In our opinion, and according to the loans, secured or unsecured, toinformation and explanations givenAnnexure referred to in the Auditors companies, firms or other partiesto us, the transactions made inReport to the Members of SKOL covered in the register maintained pursuance of contracts andBreweries Limited (the Company) for under Section 301 of the arrangements referred to abovethe year ended 31 March 2010. We Companies Act, 1956. and exceeding the value of Rs 5report that: Accordingly, paragraph 4(iii)(a),lakhs with any party during the yeari. (a) The Company has maintained4(iii)(b), 4(iii)(c) and 4(iii)(d) of thehave been made at prices which are proper records showing full Order is not applicable. reasonable having regard to the particulars, including quantitativeprevailing market prices at the(b) The Company has taken a loan details and situation of fixed relevant time.from company covered in the assets.register maintained under Sectionvi. In our opinion and according to(b) The Company has a regular 301 of the Companies Act, 1956.the information and explanationsprogramme of physical verificationThe maximum amount outstanding given to us, the Company hasof its fixed assets by which all fixedduring the year and the year-end complied with the provisions ofassets are verified over a period ofbalance of such loan was Section 58A, Section 58AA andthree years. In our opinion, this Rs 427,017,940 and other relevant provisions of theperiodicity of physical verification is Rs 167,034,977 respectively. Companies Act, 1956 and thereasonable having regard to therules framed there under/ the(c) In our opinion, the rate of interestsize of the Company and the nature directives issued by the Reservefor the above loan taken from theof its assets. No material Bank of India (as applicable) withcompany, listed in the registerdiscrepancies were noticed onregard to deposits acceptedmaintained under Section 301 ofsuch verification. from the public. Accordingly,the Companies Act, 1956 are not, there have been no proceedings(c) Fixed assets disposed off duringprima facie, prejudicial to the before the Company Law Boardthe year were not substantial, andinterest of the Company. Tenure or National Company Lawtherefore, do not affect the goingand repayment terms have not Tribunal (as applicable) orconcern assumption. been specified for such loans. Reserve Bank of India or anyii. (a) The inventory, except for goods-in- (d) According to the information and Court or any other Tribunal in thistransit and stock lying with thirdexplanations given to us, the tenure matter and no order has beenparties, has been physically verified and repayment terms have not passed by any of the aforesaidby the management during thebeen specified for the above authorities.year. In our opinion, the frequency mentioned loan. Consequently, we vii. In our opinion, the Company hasof such verification is reasonable. are unable to comment onan internal audit systemFor stocks lying with third parties paragraph 4(iii)(g) of the Order.commensurate with its size andat the year-end, writteniv. In our opinion and according to the nature of its business.confirmations have been obtained.information and explanations given to viii. The Central Government has not(b) The procedures for the physical us, there is an adequate internal prescribed the maintenance ofverification of inventories followedcontrol system commensurate with cost records under Sectionby the management are reasonablethe size of the Company and the 209(1)(d) of the Companies Act,and adequate in relation to the sizenature of its business with regard to 1956 for any of the productsof the Company and the nature ofpurchase of inventories and fixed manufactured by the Company.its business. assets and with regard to the sale ofgoods. We have not observed any(c) The Company is maintaining propermajor weakness in the internal controlrecords of inventory. Thesystem during the course of thediscrepancies noticed onaudit.verification between the physicalstocks and the book records werev.(a) In our opinion and according to thenot material. information and explanations givento us, the particulars of contractsor arrangements referred to inSection 301 of the Companies Act,1956 have been entered in theregister required to be maintainedunder that section.We make a living by what we do, but we make a life by what we give. SKOL Breweries Limited 14. Annexure to the Auditors report 18-19ix. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales Tax/ Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, Investor Education and Protection Fund and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities though there has been a slight delay in a few cases.Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441A ofthe Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company indepositing the same.According to the information and explanations given to us, there are no undisputed amounts payable in respect ofProvident Fund, Employees State Insurance, Income-tax, Wealth Tax, Service Tax, Sales Tax/ Value Added Tax,Customs Duty, Excise Duty, Cess, Investor Education and Protection Fund and other material statutory dues whichwere in arrears as at 31 March 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues of Wealth Tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. The following dues of Income-tax, Sales Tax, Service Tax, Customs Duty and Excise Duty have not been deposited by the Company on account of disputes.Name of the Statute Nature of the Dues Amount (Rs.)Period to whichForum wherethe amount relates dispute is pending Punjab Excise Act, 1914 Duty on beer loss 13,745,236 1974-75Financial Commissioner,to 1990-91 HaryanaOrissa and BiharInterest on excise3,222,7051988-89Orissa High Court Excise Act, 1965loan draw back scheme Adhesive label fees 10,877,028 2001-02 to 2004-05 Orissa High Court Duty on sediment beer 1,606,2952002-03Excise Authorities, Orissa Overtime wages2,152,0002005-06Orissa High Court of excise staff Bombay ProhibitionSupervision charges 550,9301983-84 to 1988-89 Bombay High Court Act, 1949 of excise staff Duty on expired beer1,037,0852000-01Commissioner of State Excise, Maharashtra Karnataka ExciseDuty on breakages 329,1311997-98 to 1999-00 Commissioner of State Act, 1965 Excise, Karnataka Overtime wages of 5,179,6911998-99 to 2004-05 Karnataka High excise staffCourt Central Excise Act, 1944Central excise duty 70,235,608 1996-97 to 1999-00 Customs Excise Service Tax Appellate Tribunal, Mumbai Orissa SalesSales Tax 35,029,024 1994-95 to 2000-01 Sales Tax Tribunal, Tax Act, 1947 Orissa Orissa EntrySales Tax 242,5082000-01Sales Tax Tribunal, Tax Act, 1999 Orissa Delhi Sales Sales Tax 576,4862002-03Assistant Tax Act, 1975 Commissioner of Commercial Taxes (Appeals), New Delhi Sales Tax217,200,913 2007-08Additional Commissioner -II Department of Trade &Taxes, New Delhi 15. We understand that our long-term profitability depends on being part of successful economies where jobs are created, incomes grow, and quality of life improves.Name of the Statute Nature of the Dues Amount (Rs.)Period to whichForum wherethe amount relates dispute is pendingBombay Sales Sales Tax1,514,943 1992-93Appellate Tribunal, Tax Act, 1959MaharashtraSales Tax4,139,154 1995-96Sales Tax Tribunal,MaharashtraSales Tax1,445,537 1996-97Sales Tax Tribunal,Maharashtra Bombay Sales Tax Act,Sales Tax 13,617,495 2001-02Sales Tax Tribunal, 1959 & Central Sales Maharashtra Tax Act, 1956Sales Tax8,050,922 2002-03Joint Commissioner(Appeals), MumbaiSales Tax4,984,290 2002-03Joint Commissioner(Appeals), Mumbai Uttar PradeshPenalty185,000 2003-04Sales Tax Tribunal, Trade Tax Act, 1948Uttar Pradesh Andhra Pradesh General Sales Tax3,675,677 1991-92 to 1992-93 Andhra Pradesh Tax Act, 1957High CourtSales Tax 17,795,665 2007-09Appellate DeputyCommissioner,Andhra Pradesh Pondicherry GeneralSales Tax 11,982,000 1981-82 to 1984-85,Assessing Authority, Sales Act, 1967 1997-98 to 1998-99 Pondicherry Haryana SalesSales Tax5,965,472 1989-90 to 1996-97,Sales Tax Tribunal, Tax Act, 1973 1998-99 to 2003-04 Haryana Central Sales TaxSales Tax5,428,400 2002-03Assessing Officer, Act, 1956Uttar PradeshSales Tax 51,114 2006-07Joint Commissioner,Meerut Delhi Sales Tax Act, 1975Sales Tax137,749 2004-05AdditionalCommissioner SalesTax, New Delhi Uttar Pradesh Tax on Penalty379,728 2003-04Sales Tax Tribunal, Entry of Goods Act, 2000 MeerutEntry Tax2,000,117 2005-06Assessing officer,MeerutEntry Tax7,465,500 2003-04 to 2005-06 Supreme Court Haryana Local AreaLocal Area 10,050,426 2000-01 to 2003-04 Chandigarh High Development Tax Act, 2000 Development TaxCourt Finance Act, 1994Service Tax and penalty 32,129,640 2006-07 to 2007-08 Customs Excise andService TaxAppellate Tribunal,Mumbai Customs Act, 1962Customs Duty 261,555 2007-08Customs Excise andService TaxAppellate Tribunal,Mumbai Note: The amounts paid under protest have been reduced from the amounts demanded in arriving at the aforesaid disclosure. SKOL Breweries Limited 16. Annexure to the Auditors report 20-21x. The Company has accumulated Company have been applied for thelosses of Rs. 3,023,505,836 at thepurpose for which they were raised.end of the financial year which is lessthan fifty percent of its net worth.xvii. According to the information andThe Company has incurred cash explanations given to us and on anlosses in the current financial year. overall examination of the balanceHowever, no cash losses weresheet of the Company, we are of theincurred in the immediately opinion that funds raised on short-preceding financial year. term basis amounting toRs 5,561,800,302 have been used xi. In our opinion and according to thefor long-term purposes. information and explanations given to us, the Company has not xviii. The Company has not made any defaulted in repayment of dues to its preferential allotment of shares to bankers. The Company did not have companies/ firms/ parties covered in any outstanding dues to any financial the register maintained under institutions or debenture holders Section 301 of the Companies Act, during the year.1956.xii. In our opinion the Company hasxix. The Company did not have anymaintained adequate records in outstanding debentures during thecases where it has granted loans year.and advances on the basis ofxx. The Company has not raised anysecurity by way of pledge of shares.money by public issues during theThe Company has not granted any year.loans and advances on the basis ofsecurity by way of pledge ofxxi. According to the information anddebentures and other securities. explanations given to us, no fraud on or by the Company has been xiii. In our opinion and according to the noticed or reported during the information and explanations givencourse of our audit. to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. for B S R & Co. xiv. According to the information andFirm registration number: 101248Wexplanations given to us, the Chartered accountantsCompany is not dealing or trading inshares, securities, debentures andZubin Shekaryother investments.PartnerMembership No. 48814 xv. According to the information and explanations given to us, the Company has not given anyBangalore guarantee for loans taken by others2 July 2010 from banks or financial institutions. xvi. In our opinion and according to theinformation and explanations givento us, the term loans taken by the Through community service, I learn what it means to be a part of something bigger than myself. 17. We are pushing ahead with plans to improve our water efficiency, create new and affordable products for low-income consumers using locally grown crops, and improve awareness of the importance of responsible drinking.SKOL Breweries Limited 18. Balance sheet as on 31 March 2010 22-23 (Rs.) As at As atSchedule31 March 2010 31 March 2009SOURCES OF FUNDSShareholders fundsShare capital 22,311,837,4502,311,837,450Reserves and surplus36,140,637,7486,140,637,748 8,452,475,1988,452,475,198 Loan fundsUnsecured loans 48,745,273,358 6,170,031,89617,197,748,556 14,622,507,094 APPLICATION OF FUNDSAPPLICATIONFixed assets5Gross block 14,208,781,789 13,556,110,406Less: Accumulated depreciation(3,112,513,576)(2,397,970,441)Less: Provision for impairment of fixed assets (122,920,799) (143,814,725)Net block10,973,347,41411,014,325,240Capital work-in-progress495,094,892 506,703,13011,468,442,306 11,521,028,370 Investments 6 13,359,72511,359,225 Current assets, loans and advances Inventories7 1,987,421,581 1,650,081,511Sundry debtors 8 3,270,632,782 3,390,344,214Cash and bank balances 9 410,300,842 317,395,443Loans and advances 10867,392,782 1,176,231,356 6,535,747,987 6,534,052,524Current liabilities and provisionsCurrent liabilities113,628,395,308 4,861,783,690Provisions 12453,748,750 421,930,244 4,082,144,058 5,283,713,934 Net current assets 2,453,603,929 1,250,338,590 Amalgamation adjustment reserve account1,457,236,076 1,457,236,076 Debit balance in profit and loss account 3,023,505,836 1,600,944,149Less: Balance in general reserve account3 (1,218,399,316) (1,218,399,316) 1,805,106,520 382,544,833 17,197,748,556 14,622,507,094S ignificant accounting policies 1Notes to the accounts18 The schedules referred to above form an integral part of the balance sheetAs per our report attachedfor B S R & Co. for SKOL Breweries LimitedFirm registration number: 101248WChartered AccountantsZubin Shekary Paolo Alberto Francesco Lanzarotti T S R SubramanianPartner Managing DirectorDirectorMembership No. 48814Kevin HeydenrychChief Finance OfficerBangalore Gurgaon2 July 2010 2 July 2010 19. Profit and loss account(Rs.)Schedule For the year endedFor the year ended 31 March 201031 March 2009 Income Sale of manufactured goods, gross21,122,149,18121,633,156,478 Sale of traded goods, gross 38,638,725 96,894,53021,160,787,906 21,730,051,008 Less: Excise duty (7,547,702,144)(7,678,466,595) Less: Discounts (1,020,951,450)(1,040,654,424) Sales, net 12,592,134,312 13,010,929,989Income from contract bottling 76,871,218143,573,120 Other income13 234,659,008185,950,91712,903,664,538 13,340,454,026 Expenditure Cost of materials146,591,267,1746,839,899,584 Personnel costs151,058,203,502974,679,780 Other expenses 165,074,064,6614,833,230,221 Depreciation5805,280,273651,299,955 Provision for impairment of fixed assets5- (7,066,845) Opening adjustment for returnable containers18 (2) - 340,493,099 Finance costs17797,279,385433,651,97014,326,094,995 14,066,187,764(Loss) before tax(1,422,430,457)(725,733,738) Provision for tax- current tax- -- pertaining to earlier years (reversal) -(48,582,678)- fringe benefit tax - 35,160,648- deferred tax (credit)/ charge18 (15) -(63,744,036)- wealth tax131,230 192,269 (Loss) after tax (1,422,561,687)(648,759,941) Debit balance in profit and loss account brought forward(1,600,944,149)(952,184,208) Debit balance in profit and loss account carried (3,023,505,836)(1,600,944,149) over to the balance sheetEarnings per share (par value; Rs. 10 each)- Basic and diluted18 (6) (6.15) (2.81)Significant accounting policies 1 Notes to the accounts 18The schedules referred to above form an integral part of the profit and loss account. As per our report attached for B S R & Co.for SKOL Breweries Limited Firm registration number: 101248W Chartered Accountants Zubin ShekaryPaolo Alberto Francesco Lanzarotti T S R Subramanian PartnerManaging DirectorDirector Membership No. 48814Kevin HeydenrychChief Finance Officer BangaloreGurgaon 2 July 20102 July 2010 SKOL Breweries Limited 20. Schedules to the financial statements 24-251. Significant accounting policies principles in India requires (v) Gain on prepayment ofmanagement to make estimates deferred sales loan Backgroundand assumptions that affect the Gain on prepayment of SKOL Breweries Limited (the Companyreported amounts of assets and deferred sales tax loan is or SKOL) was incorporated as a publicliabilities and disclosure of recognised when the deferred limited company under the Companiescontingent liabilities on the date of sale tax loan, is settled at a Act, 1956 on 18 November 1988. The the financial statements and the discounted value as mentioned Company is primarily engaged in theresults of operations during the in the deferral scheme. business of brewing, packaging,reporting period end. Actual results distribution, marketing and sale of beer.could differ from those estimates. 1.5 Fixed assetsAny revision to accounting Basis 1.1 Basis of preparation estimates is recognisedFixed assets are carried at cost ofprospectively in current and futureacquisition or construction lessThe financial statements have beenperiods. accumulated depreciation andprepared and presented under the provision for impairment of assets.historical cost convention on the 1.4 Revenue recognitionThe cost of fixed assets includesaccrual basis of accounting. The freight, duties, taxes and otherfinancial statements have beenRevenue is recognised to the extent incidental expenses related to theprepared to comply in all materialthat it is probable that the economic acquisition or construction of therespects with the mandatory benefits will flow to the Company respective assets. BorrowingAccounting Standards (AS) and the revenue can be measured costs directly attributable toprescribed by Companies reliably. acquisition or construction of those(Accounting Standards) Rules,(i) Sale of goodsfixed assets which necessarily take2006, and other pronouncementsRevenue from sale of a substantial period of time to getof the Institute of Charteredmanufactured and tradedready for their intended use areAccountantes of India (ICAI) andgoods is recognised on transfercapitalised to the extent they relatethe relevant provisions of theof all the significant risks and to the period till such assets areCompanies Act, 1956, to the extentrewards of ownership to theready to be put to use. Intangibleapplicable. These financialbuyer which normally takes assets are recorded at theirstatements are prepared andplace on despatch of goods.acquisition cost.presented in Indian Rupees.The amount recognised as sale Advances paid towards the 1.2 Going concernis net of sales tax, sales returns acquisition or construction of fixedand discount. Sales areThese financial statements haveassets outstanding at the balancepresented both gross and netbeen prepared on a going concern sheet date and the cost of the fixedof excise duty.basis, notwithstanding accumulated assets not ready for their intendedlosses and reliance on short term (ii) Income from contractuse on such date, are disclosed asborrowings due to the followingbottlingcapital work-in-progress.considerations:Income from contract bottling is Upto 31 March 2008, containers recognised when the right to- Expected steady future growth(empty bottles) were recorded as receive bottling fee isreflected in financial projections fixed assets and depreciated over a established which normallyprepared by the management;period of two years. The Company takes place on dispatch of is a dominant/ key player in the- Expected continual technical and goods by contract bottlers to Indian market and the policy offinancial support by the SABMiller its customers. recording containers as fixed assetsgroup;(iii) Interest is more prevalent in International- Subsequent renewal of short termInterest is recognised using the markets. Other companies in Indiaborrowings from banks.time proportion basis taking (i.e. competitors) record containersinto account the amountas inventories and not as fixedThese financial statements, outstanding and the interest assets. This resulted in an issue ontherefore, do not include any rate applicable. comparability of results andadjustments relating toperformance. In order to ensurerecoverability and classification of(iv) Sales of scrap and comparability of financialasset amounts or to classification spent malt performance with other companiesand amount of liabilities that may beRevenue from sale of scrap and in India, Management, with effectnecessary if the Company was spent malt is recognised on from 1 April 2008, have changedunable to continue as a goingtransfer of all the significant risks the policy of recording containersconcern. and rewards of ownership to as inventories which were hitherto the buyer which normally takes 1.3 Use of estimatesrecorded as fixed assets. place on despatch of goods. Management believes that thisThe preparation of financial The amount recognised as sale change will result in a morestatements in conformity withis net of sales tax and sales appropriate presentation of thegenerally accepted accountingreturns. financial statements (also refer note 2 of Schedule 18). 21. In 2008 SABMiller launched project Humsafar which witnessed tremendous interest amongst truckers. 1.6 Depreciation 1.7 Impairment Depreciation on fixed assets is provided on the straight-line method as per theThe Company periodically assesses rates and in the manner prescribed in Schedule XIV to the Companies Act, whether there is any indication that 1956. The rates of depreciation prescribed in Schedule XIV to thean asset or a group of assets Companies Act, 1956 are considered as minimum rates. However, where thecomprising a cash generating unit managements estimate of the useful life of a fixed asset at the time of may be impaired. If any such acquisition of the asset or of the remaining useful life on a subsequent reviewindication exists, the Company is shorter than that envisaged in the aforesaid schedule, depreciation isestimates the recoverable amount provided at a higher rate based on the managements estimate of useful of the asset. For an asset or group life/ remaining useful life. of assets that does not generate Pursuant to this policy the following fixed assets are depreciated to their residual largely independent cash inflows, the value over their estimated useful life:recoverable amount is determinedfor the cash-generating unit to which Class of Assets Yearsthe asset belongs. If such Computer equipment4recoverable amount of the asset or Furniture, fittings and office equipment6the recoverable amount of the cashgenerating unit to which the asset Brands 20belongs is less than its carrying Buildings28amount, the carrying amount is Computer software 4reduced to its recoverable amount. Motor VehiclesVehicles 5The reduction is treated as animpairment loss and is recognised in Plant and machinerythe profit and loss account. The -Chillers 5recoverable amount is higher of the -Crates 2assets net selling price and -Wooden pallets 3value in use. -Others 14-18After recognition of impairment loss,depreciation is provided on therevised carrying amount of the Freehold land is not depreciated. Leasehold land is amortised over the leaseasset, less its residual value (if any), term. Leasehold improvements are amortised over the lease term or itsover its remaining useful life. estimated useful life of 5 years, whichever is lower.If at the balance sheet date there is Pro-rated depreciation is provided on all assets purchased or sold during thean indication that if a previously year. Assets, costing individually Rs 5,000 or less, are depreciated in full in theassessed impairment loss no longer year of purchase.exists, the recoverable amount is The useful lives of brands, which primarily represent brands purchased, have reassessed and the asset is been determined based on managements assessment of market conditions in reflected at the recoverable amount India, intent to use and ability to maintain these assets, previous history of these subject to a maximum of brands and internationally accepted practices. depreciable historical cost. Animpairment loss is reversed only tothe extent that the carrying amountof asset does not exceed the netbook value that would have beendetermined; if no impairment losshad been recognised. No matter how big and powerful government gets, and the many services it provides, it can never take the place of volunteers. SKOL Breweries Limited 22. Schedules to the financial statements 26-271.8 Borrowing costs transaction is settled during the reporting period, and the Borrowing costs directly attributable to acquisition or construction of those corresponding foreign currency fixed assets, which necessarily take a substantial period of time to get ready for amount translated at the later of their intended use, are capitalised. Other borrowing costs are accounted as an the date of inception of the expense. forward exchange contract and 1.9 Investments the last reporting date. Such exchange differences are Long-term investments are carried at cost less any other-than-temporary recognised in the profit and loss diminution in the value, as determined by management on commercial account in the reporting period in consideration determined separately for each individual investment. which the exchange rates change. 1.10 Inventories For forward exchange contracts Inventories are valued at lower of cost and net realisable value. Cost of and other derivatives that are not inventories comprises purchase price, costs of conversion and other costs covered by AS 11 and that relate incurred in bringing the inventories to their present location and condition. to a firm commitment or highly probable forecast transactions, The methods of determination of cost of various categories of inventories are asthe Company has adopted the follows:principles of Accounting Standard Raw materials, packing materials, stores First-in-first-out (FIFO) method(AS) 30, Financial Instruments: and spares and traded goods Recognition and Measurement with effect from April 1, 2008. Work-in-progress and finished goods FIFO method. Production Derivative financial instruments, (including goods in transit)overheads are allocated onwhich qualify for cash flow hedge the basis of normal capacityaccounting and where Company of production facilities. has met all the conditions of cash flow hedge accounting, are fair Maintenance spares, which are in Monetary assets and liabilitiesvalued at balance sheet date and regular use and are not an integraldenominated in foreign currenciesthe resultant exchange loss/(gain) part of any fixed asset, are treated as at the balance sheet date are is debited/credited to the hedge as inventory and valued at cost. translated at the closing exchange reserve. This loss/ (gain) would be The comparison of cost and net rate on that date; the resultant recorded in profit and loss realisable value is made on an item- exchange differences are account when the underlying by-item basis. The net realisablerecognised in the profit and losstransactions affect earnings. Other value of work-in-progress is account. derivative instruments that relate determined with reference to theto a firm commitment or a highlyForward contracts and otherprobable forecast transaction and selling prices of related finished derivatives are entered into to goods in the ordinary course of that do not qualify for hedgehedge the foreign currency risk of accounting have been recorded at business, less estimated cost of the underlying outstanding at the completion and estimated costsfair value at the reporting date andbalance sheet date. The premiumthe resultant exchange loss/ (gain) necessary to make the sale. Rawor discount on all such contracts materials, packing materials andhas been debited/ credited toarising at the inception of each profit and loss account for the other supplies held for use in contract is amortised as income production of inventories are not year.or expense over the life of the written below cost except in cases contract. Any profit or loss arising where material prices have declined, on the cancellation or renewal of and it is estimated that the cost of forward contracts is recognised the finished products will exceedas income or as expense for the their net realisable value.period. 1.11 Foreign exchangeThe exchange difference on the Foreign exchange transactions areforward exchange contract recorded at the rates of exchangeentered into to hedge the foreign prevailing on the dates of the currency risk of the underlying respective transactions. Exchangeoutstanding at the balance sheet differences arising on foreign date, is calculated as the exchange transactions settleddifference between the foreign during the year are recognised in thecurrency amount of the contract profit and loss account for the year.translated at the exchange rate atthe reporting date, or thesettlement date where the 23. Our corporate social activities aim to improve the quality of life for local people, helping to build strong relationships with suppliers, consumers and our employees.1.12 Employee benefits 1.14 Provisions and contingent1.15 Taxation liabilities(i)Contributions to providentIncome tax expense comprises funds, which is a defined The Company recognises acurrent tax (i.e. amount of tax for contribution scheme, areprovision when there is a present the year determined in accordance charged to the profit and obligation as a result of anwith the Income-tax law) and loss account on an accrualobligating event that probablydeferred tax charge or credit basis.requires outflow of resources and (reflecting the tax effects of timing a reliable estimate can be made ofdifferences between accounting(ii) The Company has an the amount of the obligation. A income and taxable income for the arrangement with Life disclosure of a contingent liabilityyear). The deferred tax charge or Insurance Corporation of is made when there is a possiblecredit and the corresponding India to administer its obligation or a present obligationdeferred tax liabilities or assets are superannuation scheme, that may, but probably will not,recognised using the tax rates that which is a defined require an outflow of resources.have been enacted or contribution scheme. The When there is a possible obligation substantively enacted by the contributions to the said or a present obligation that thebalance sheet date. Deferred tax scheme are charged to the likelihood of outflow of resourcesassets are recognised only to the profit and loss account on an is remote, no provision orextent there is reasonable certainty accrual basis. disclosure is made. that the assets can be realised in(iii) Gratuity, which is a defined future; however, where there is Provisions for onerous contracts,benefit scheme is provided unabsorbed depreciation or i.e. contracts where the expectedfor based on an actuarialcarried forward business loss unavoidable costs of meeting thevaluation carried out by anunder taxation laws, deferred tax obligations under the contractindependent actuary as atassets are recognised only if there exceed the economic benefitsthe balance sheet date.is a virtual certainty of realisation of expected to be received under it,Actuarial gains/ losses aresuch assets. are recognised when it is probablerecognised immediately in that an outflow of resourcesDeferred tax assets are reviewedthe profit and loss account embodying economic benefits willas at each balance sheet date andand are not deferred. Only be required to settle a present written down or written up tosuch changes in legislation obligation as a result of reflect the amount that isare taken into account while an obligating event, based on a reasonably/virtually certain (as theproviding for gratuity that reliable estimate of such case may be) to be realised.have been enacted upto the obligation.balance sheet date.The Company offsets, the current (on a year on year basis) and(iv) Compensated absences are deferred tax assets and liabilities, provided for based on an where it has a legally enforceable actuarial valuation carried out right and where it intends to settle by an independent actuary such assets and liabilities on a net as at the balance sheet date. basis. 1.13 Leases The Company provides for andLeases where the lessordiscloses the Fringe Benefit Taxeffectively retains substantially all(FBT) in accordance with thethe risks and rewards of provisions of Section 115 WC ofownership of the leased asset arethe Income-tax Act, 1961 and theclassified as operating leases.guidance note on FBT issued byOperating lease payments are ICAI.recognised as an expense in theprofit and loss account on astraight-line basis over the leaseterm.SKOL Breweries Limited 24. Schedules to the financial statements 28-291.16 Earnings per share1.17 Employee stock compensation costThe basic earnings per share iscomputed by dividing the net The Company applies intrinsicprofit or loss attributable to equityvalue method of accounting forshareholders for the year by the stock options granted by theweighted average number of ultimate holding company to theequity shares outstanding during employees of the Company afterthe year. The number of equity 1 April 2005. The intrinsic valueshares used in computing diluted of the employee services receivedearnings per share comprises the in exchange for the grant of suchweighted average sharesoptions is recognised as anconsidered for deriving basicexpense. The amount recognisedearnings per share, and also the is spread over the vesting periodweighted average number of which is also the period overequity shares, which would havewhich some of the schemebeen issued on conversion of all performance criteria relate. Atpotentially dilutive equity shares.each balance sheet date, thePotential dilutive equity shares are estimates of the number ofdeemed converted as of the options that are expected tobeginning of the year, unless they become excercisable are revised.have been issued at a later date.It recognises the impact of theThe potentially dilutive equityrevision of the original estimates,shares have been adjusted for theif any, in the profit and lossproceeds receivable had theaccount over the remainingshares been actually issued at a vesting period. The effect offair value (i.e. the average marketuncertainty as to whether anyvalue of the outstanding shares).performance criteria of shareIn computing the dilutive earnings options will be met is dealt withper share, only potential equity by estimating the probability ofshares that are dilutive and thatshares vesting and therefore theeither reduces the earnings percost is adjusted and readjustedshare or increases loss per sharefor the probability of vesting in theare included.vesting period.1.18 Cash flow statement Cash flows are reported using the indirect method, whereby the net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated. Business is the economic engine of our culture, and if it could be transformed to truly serve nature as well as ourselves, it could become essential to our rescue. 25. By accepting responsibility, we take effective steps toward our goal: an inclusive human society on a habitable planet, a society that works for all humans and for all nonhumans. By accepting responsibility, we move closer to creating a world that works for all.(Rs.)2. Share capital As atAs at31 March 201031 March 2009Authorised300,000,000 (previous year:300,000,000) equity shares of Rs. 10 each3,000,000,000 3,000,000,000 3,000,000,0003,000,000,000Issued, subscribed and paid up231,183,745 (previous year: 231,183,745) equity shares of Rs. 10 each fully paid up2,311,837,4502,311,837,450 2,311,837,4502,311,837,450Of the above : 1) 142,058,715 (previous year: 142,041,561) equity shares of Rs. 10 each are held by SABMiller Breweries Private Limited,the immediate holding company. 87,341,038 (previous year: 87,341,038) equity shares of Rs. 10 each are held by SABMillerAsia B.V., another group Company. SABMiller Plc is the ultimate holding Company. 2) Pursuant to a scheme of arrangement 34,636,335 (previous year: 34,636,335) equity shares of Rs. 10 each were allotted,in earlier years, for consideration other than in cash. (Rs.)3. Reserves and surplusAs at As at31 March 2010 31 March 2009Capital reserveAt the beginning of the year2,000,0002,000,000 Securities premium 6,138,637,748 6,138,637,748 General reserveAt the beginning of the year1,218,399,316 1,218,399,316Less: Debit balance in profit and loss account (1,218,399,316)(1,218,399,316) -- 6,140,637,748 6,140,637,748 (Rs.)4. Unsecured loans As at As at31 March 2010 31 March 2009 Bank overdraft 27,835,207415,394,900 Short term bank loans5,494,011,986 3,344,617,711 Other loansFrom banks:-External commercial borrowings [Refer note (a) below] 908,460,000 662,275,628-Others [Refer note (a) below] 2,100,000,000 149,000,000From others: - loan from holding company [Refer note (b) below]167,034,977 211,624,493 - loan from fellow subsidery [Refer note (b) below]47,931,18846,119,1648,745,273,3586,170,031,896 Notes:a) Amount repayable within a period of 12 months Rs. Nil (previous year: Rs.178,325,000).b) Tenure and terms for repayment have not been specified for loans obtained from holding company and fellow subsidiary. SKOL Breweries Limited 26. 30-31 5. Fixed assets ProvisionGross BlockAccumulated DepreciationforNet blockimpairment Description As at As at 31 As atAs atAs atAs at As at1 April 2009AdditionsDeletions ChargeDeletions/March 2010 31 March 2010 1 April 200931 March 201031 March 2010 31 March 2009adjustments (refer note 1 below)Tangible assets Freehold land405,346,807 -- 405,346,807- ---16,600,000388,746,807 388,746,807 Leasehold land 15,831,621--15,831,6215,566,220 1,019,319-6,585,539 - 9,246,082 10,265,401 Leasehold improvements 9,698,369498,540 -10,196,9092,428,578 1,939,674-4,368,252 - 5,828,6577,269,791 Buildings 1,912,111,548 125,856,137 1,367,702 2,036,599,983200,607,41269,353,855 497,037 269,464,23010,803,646 1,756,332,107 1,699,829,824 Plant and machinery 7,513,864,396 594,526,239 95,198,0018,013,192,634 1,456,909,402515,462,024 71,590,1041,900,781,32293,597,651 6,018,813,661 5,943,556,369 Computer equipment 99,851,02220,915,461 8,398,519 112,367,964 69,496,07117,873,6018,279,412 79,090,260 860,707 32,416,99729,424,805Schedules to the financial statements Furniture, fittings and office equipment70,534,0837,259,694 4,529,28673,264,491 42,321,768 9,115,3574,376,438 47,060,687 800,239 25,403,56527,259,229 Motor vehicles 28,141,097-8,725,52119,415,576 13,218,410 6,194,9785,209,181 14,204,207 258,556 4,952,813 14,664,131Intangible assets Brands3,410,920,245-- 3,410,920,245549,879,349 170,546,012-720,425,361 - 2,690,494,884 2,861,040,896 Computer software89,811,21822,619,307784,966111,645,559 57,543,23113,775,453784,966 70,533,718 - 41,111,84132,267,987 Total Total 13,556,110,406771,675,378119,003,995 14,208,781,789 2,397,970,441805,280,273 90,737,1383,112,513,576122,920,799 10,973,347,414 11,014,325,240 Previous year 10,973,596,079 4,112,550,526 1,530,036,199 13,556,110,406 2,074,943,657651,299,955328,273,1712,397,970,441 143,814,72511,014,325,240 Note 1: Provision for impairment (Rs.)Provision for impairmentDescription As at 1 April 2009(reversal) Deletion As at 31 March 2010 Freehold land16,600,000- -16,600,000Buildings 11,674,312 -870,66610,803,646Plant and machinery - others 113,398,625 - 19,800,97493,597,651Computer equipment 930,146 - 69,439 860,707Furniture, fittings and office equipment 953,086 -152,847 800,239Motor vehicles 258,556 - -258,556Total143,814,725 - 20,893,926122,920,799Previous year156,563,671(7,066,845)5,682,101143,814,725 27. We believe: Healthy business depends on healthy society (Rs.)6. InvestmentsAs atAs at 31 March 201031 March 2009 Long term investments1. Non trade - unquoted(i) Government and trust securitiesNational Savings Certificates4,020,000 2,019,500Indira Vikas Patra26,55026,550 4,046,550 2,046,050(ii) Fully paid up equity shares1 (previous year:1) fully paid up equity shares of Rs. 10 each of MBL (AP) Breweries Limited 1 112,000 (previous year: 12,000) fully paid up equity shares of Rs. 10 each of Shushruta12,00012,000Medical Aid and Research Hospitals Limited5,000 (previous year: 5,000) fully paid up equity shares of Rs. 10 each of Maini Granites Limited5,000 5,000300 (previous year: 300) fully paid up equity shares of Rs. 10 each300 300in AP Heavy Machinery & Engineering Limited10,000 (previous year:10,000) fully paid up equity shares of Rs. 10 each in 10,00010,000Ramanashree Comforts Limited10,000 (previous year: 10,000) fully paid up equity shares of Rs. 10 each in10,00010,000Anusha International Limited1,700 (previous year: 1,700) fully paid up equity shares of Rs. 100 each 1,700 1,700in Maa Communication Bozel Limited7,000 (previous year: 7,000) fully paid up equity shares of Rs. 10 each7,000 7,000in Sachdev International Limited12,500 (previous year: 12,500) fully paid up equity shares of Rs. 10 each 12,50012,500in Scarlet Flowers and Agritech Limited100 (previous year: 100) fully paid up equity shares of Rs. 10 each100 100in Indana Spices and Food India Limited80,000 (previous year: 80,000) fully paid up equity shares of Rs. 10 each 80,00080,000in Vulcan Leasing and Investments Limited5,005 (previous year: 5,005) fully paid up equity shares of Rs. 100 each 500,500 500,500in Janata Sahakari Bank Limited295 (previous year: 295) fully paid up equity shares of Rs. 100 each29,50029,500in Haryana State Cooperative Bank Limited50,000 (previous year: 50,000) fully paid up equity shares of Rs. 10 each in50,00050,000SDF Industries Limited 718,601 718,6012. Non trade - quotedFully paid up equity shares15,000 (previous year: 15,000) fully paid up equity shares of Rs. 1 each in ITC Limited2,619,750 2,619,750400 (previous year: 400) fully paid up equity shares of Rs. 10 each in Ultratech Cement Limited400,060 400,06080 (previous year: 80) fully paid up equity shares of Rs. 10 each in Tata Motors Limited56,94456,94415,000 (previous year: 15,000) fully paid up equity shares of Rs. 2 each 2,115,000 2,115,000in Gujarat Ambuja Cement Limited2,000 (previous year: 1,000) fully paid up equity shares of Rs. 2 each in Larsen & Toubro Limited2,598,850 2,598,8501,400 (previous year: 1,400) fully paid up equity shares of Rs. 2 each in Satyam Computers Limited633,500 633,5008,600 (previous year: 8,600) fully paid up equity shares of Rs. 10 each in Syndicate Bank Limited 700,470 700,470 9,124,574 9,124,574Total long term investment13,889,72511,889,225Less: Provision for, other than temporary, diminution in the value of investments (530,000) (530,000)13,359,72511,359,225 The aggregate book value and market value of quoted investments and book value of unquoted investments are as follows: Quoted investmentAggregate book value 9,124,574 9,124,574Aggregate market value10,397,936 5,876,574Aggregate book value of unquoted investments 4,235,151 2,234,651SKOL Breweries Limited 28. Schedules to the financial statements 32-33(Rs.) 7. Inventories As at As at 31 March 2010 31 March 2009Raw materials and packing materials810,385,289550,959,888 Goods in transit - raw materials15,229,7107,574,173 Stores and spares 127,383,31992,353,625 Work-in-progress 195,653,564182,761,543 Finished goods 823,707,023798,896,716 Goods in transit - finished goods 14,410,106 15,313,095 Traded goods 652,5702,222,471 1,987,421,581 1,650,081,511(Rs.) 8. Sundry debtors As atAs at31 March 201031 March 2009Unsecured Debts outstanding for a period exceeding six months - considered good155,606,75316,366,113 - considered doubtful306,912,453 232,378,340 462,519,206248,744,453 Other debts - considered good3,115,026,0293,373,978,101 - considered doubtful - 4,823,6583,577,545,2353,627,546,212 Less: Provision for doubtful debts(306,912,453)(237,201,998) 3,270,632,782 3,390,344,214(Rs.) 9. Cash and bank balances As atAs at31 March 201031 March 2009Cash on hand-35,068 Cheques in hand -60,860,594 Balances with scheduled banks - in current accounts378,946,793 241,718,047 - in margin money deposit accounts13,905,16313,734,611 - in exchange earners foreign currency (EEFC) account 17,448,886 928,808 - in unclaimed public deposit account-30,000 - in unclaimed dividend accounts -88,315 410,300,842317,395,443 It benefits you just as much as the people you serve. There is no better feeling than knowing youve made a positive impact on another persons life. It is my responsibility, due to all of the privileges I have been given, to help those that have less 29. Through the Saanjhi Unnati program, farmers benefit from an assured market for their barley, transparent transactions and fair pricing structures.(Rs.)10. Loans and advances As atAs at31 March 201031 March 2009 UnsecuredConsidered goodAdvances recoverable in cash or in kind or for value to be received256,808,975 397,023,049Prepaid expenses 166,507,548 177,816,042Inter-company deposit 22,063,51822,667,915Rental deposits 41,111,82640,989,686Other deposits 115,415,529 130,744,750Advance fringe benefit tax (net of provision for fringe benefit tax )1,973,463 477,793Advance tax and tax deducted at source (net of provision for income-tax) 128,803,402 115,372,693Balances with excise authorities 132,460,906 288,712,959Interest accrued but not due 2,247,615 2,426,469 867,392,782 1,176,231,356Considered doubtfulAdvances recoverable in cash or in kind or for value to be received145,233,817 236,999,042Less: Provision for doubtful advances(145,233,817)(236,999,042)867,392,7821,176,231,356Notes:Dues from directors as at the balance sheet date:Jean-Marc Delpon de Vaux, Managing Director (upto 7 August 2009)2,628,3311,286,960Paolo Alberto Francesco Lanzarotti, Managing Director (from 23 September 2009)1,471,291- Maximum amount outstanding during the year:Jean-Marc Delpon de Vaux, Managing Director (upto 7 August 2009)2,628,3311,286,960Paolo Alberto Francesco Lanzarotti, Managing Director (from 23 September 2009)1,471,291-(Rs.)11. Current liabilitiesAs atAs at31 March 201031 March 2009 Acceptances48,842,735 70,092,260Sundry creditors- micro and small enterpises (refer note 18 of schedule 18)23,012,839 15,156,599- others 1,585,647,142 1,747,881,276Payable to group companies209,151,6481,448,206,620Deposits from customers and del credre agents83,856,336 90,881,516Book overdraft2,755,465514,838Interest accrued but not due 30,041,316 20,315,815Accrual for sales schemes and discounts 248,477,306252,691,379Excise duty payable 351,743,311354,692,729Other current liabilities1,044,867,210 861,232,343Investor education and protection fund shall be credited by the following amounts when due: - Unclaimed dividend - 88,315 - Unclaimed matured public deposit - 30,0003,628,395,3084,861,783,690(Rs.)12. Provisions As atAs at31 March 201031 March 2009 Provision for compensated absences 53,403,968 47,112,420Provision for gratuity 48,856,679 52,697,985Provision for income-tax (net of advance tax and tax deducted at source) 18,011,044 18,011,044Provision for fringe benefit tax (net of advance tax) 4,489,0854,489,085Provision for claims (refer to note 13 of Schedule 18)328,987,974299,619,710 453,748,750 421,930,244SKOL Breweries Limited 30. Schedules to the financial statements 34-35(Rs.) 13. Other incomeFor the year ended For the year ended 31 March 2010 31 March 2009Sale of spent malt and scrap171,408,965 132,542,796 Sale of raw materials 2,592,475 - Interest on fixed deposit [tax deducted at source Rs. 354,658(previous year: Rs. 240,071)]3,970,121 2,008,395 Profit on sale of fixed assets, net20,121,94715,004,247 Gain on prepayment of sales tax deferral loan -14,322,809 Duty draw back on export 16,956,697 8,113,532 Royalty income 14,813,453 6,611,772 Dividend income 179,848 177,101 Miscellaneous income4,615,502 7,170,265 234,659,008 185,950,917 (Rs.) 14. Cost of materials For the year ended For the year ended 31 March 2010 31 March 2009Cost of of traded goods sold 34,735,29777,339,029 Raw materials and packing materials consumed6,555,731,699 6,736,736,577 Malt processing charges65,038,647 110,599,032Opening stock Work-in-progress 182,761,543124,986,877 Finished goods 814,209,811564,141,292 Cost of bottles included in finished goods as at 1 April 2008-128,317,545996,971,354817,445,714 Less: Excise duty on opening stock 398,774,474304,023,888 (A)598,196,880513,421,826 Closing stock Work-in-progress 195,653,564182,761,543 Finished goods (including goods in transit) and cost of containers838,117,129 814,209,811 1,033,770,693 996,971,354 Less: Excise duty on closing stock371,335,344 398,774,474 (B) 662,435,349 598,196,880(Increase) in work-in-progress and finished goods (A-B) (64,238,469)(84,775,054) 6,591,267,174 6,839,899,584 (Rs.) 15. Personnel costs For the year ended For the year ended 31 March 2010 31 March 2009Salaries, wages and bonus 939,018,938 868,118,126 Contributions to provident and other funds 33,501,87530,886,292 Gratuity expense1,536,39914,483,680 Compensated absences 16,901,748 5,839,464 Workmen and staff welfare expenses 67,244,54255,352,218 1,058,203,502 974,679,780 31. Social intervention being rolled out in areas of conservation farming, career training & animal husbandry.(Rs.) 16. Other expenses For the year endedFor the year ended31 March 201031 March 2009Sales scheme expenses770,817,493731,286,351 Commission on sales225,000,435195,608,001 Freight outward813,190,943774,819,322 Power and fuel 574,467,881698,588,332 Advertisement and publicity825,787,061668,107,856 Management fees461,725,791515,999,971 Rates and taxes129,067,081122,276,993 Legal and professional fees248,640,253152,976,820 Clearing and forwarding110,654,121 75,720,004 Travel and conveyance106,985,109121,812,185 Consumption of stores and spares 161,230,340128,418,139 Rent 181,317,912170,384,812 Repairs and maintenance- buildings 9,804,956 9,143,153- plant and machinery26,443,58417,813,825- others 50,865,07743,331,462 Telephone and other communication 49,339,72235,740,410 Training and development25,865,70430,603,680 Insurance 35,419,84325,275,349 Provision for doubtful debts69,710,455 (62,452,945) Bad debts written off - 20,895,115 Printing and stationery9,776,78011,215,839 Provision for doubtful loans and advances(91,765,225) 66,780,086 Doubtful advances written off1,000,000- Provision for claims, net 29,368,26474,989,379 Foreign exchange loss, net26,166,45415,094,179 Miscellaneous expenses 223,184,627 188,801,9035,074,064,661 4,833,230,221 (Rs.) 17. Borrowing cost For the year endedFor the year ended31 March 201031 March 2009Interest - On external commerical borrowings72,779,493 35,740,247 - On term loans 672,031,068474,026,661 - Others 32,466,161 45,754,180 Bank charges 20,002,663 26,457,914 797,279,385581,979,002 Less: Borrowing cost capitalised-148,327,032 797,279,385433,651,970 Our nation will succeed or fail to the degree that all of us citizens and businesses alike are active participants in building strong, sustainable and enriching communities.SKOL Breweries Limited 32. Schedules to the financial statements 36-3718. Notes to the accounts 1. Contingent liabilities and other commitments (Rs.) Particulars As atAs at31 March 201031 March 2009 Claims against the Company not acknowledged as debts in respect of: a) Sales tax matters 90,838,719 57,788,606 b) Excise matters90,081,557 91,641,840 c) Service tax matters123,741,134 32,129,640 d) Custom matters261,555 261,555 e) Other matters 46,234,080 32,379,016 Other commitments f)Bank guarantees9,243,54031,037,612 g) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for 505,701,966 604,587,467 2. In the previous year, pursuant to the change in accounting policy for returnable containers, the Company has carried out the following accounting adjustments in the books of account as at 1 April 2008. ParticularsAmount(Rs) Reversal of opening balance for returnable containers appearing in the financial statements as at 1 April 2008: Gross block of returnable containers 1,510,709,393 Accumulated depreciation of returnable containers (317,041,425) Containers liability (601,678,875)591,989,093 Opening stock of containers as at 1 April 2008, accounted as inventories as per the revised accounting policy Finished goods128,317,545 Packing materials 123,178,449 (251,495,994) Total 340,493,099 Due to the change in accounting policy for returnable containers in previous year, the loss for the year ended 31 March 2009 was higher by Rs 524,241,616 as compared to the immediately preceding previous year, of which Rs 340,493,099 was disclosed separately as opening adjustment for returnable containers. 3. Early adoption of AS 30 During the year ended 31 March 2009, the Company early adopted the principles of AS 30 effective 1 April 2009 for forward exchange contracts and other derivatives that are not covered by AS 11 and that relate to a firm commitment or a highly probable forecast transaction. 4. Income from contract bottling operations pertains to the revenue share the Company has earned on sales made by the tie up units. These revenues are recorded on a net basis in order to comply with relevant statutory regulations where by tie up units raise invoices on its customers, accounts for collections in its books of accounts, discharge statutory dues and taxes and records sales on a gross basis in the financial statements. The contract bottling agreement further specifies that the dealing between the Company and the contract bottlers is on a principal to principal basis. The above practice is consistent with prevalent industry practice. 5. Auditors remuneration, net of service tax (included under legal and professional fees)(Rs.) ParticularsFor the year endedFor the year ended 31 March 201031 March 2009 As auditor - Statutory audit 9,200,000 9,200,000 - Tax audit 1,000,000 1,000,000 Reimbursement of expenses 550,123 528,3396. Earnings per share (Figures in Rs. except number of shares) ParticularsFor the year ended For the year ended 31 March 2010 31 March 2009 Loss for the year attributable to equity shareholders(1,422,561,687)(648,759,941) Weighted average number of equity shares of Rs. 10 each used231,183,745231,183,745 for calculation of basic and diluted earnings per share Basic and diluted earnings per share (6.15)(2.81) 33. Demonstration farming being undertaken on brewery land to generate learnings. 18. Notes to the accounts7.Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 (quantitative information has been compiled from records and technical data in respect of each class of goods manufactured/ purchased by the Company): (a) Details of finished goods (including goods in transit) and turnover (gross)For the year endedFor the year ended 31 March 201031 March 2009 BeerQuantityAmount Quantity Amount (in cases) (Rs.) (in cases)(Rs.) Opening stock2,509,859814,209,811 2,337,847564,141,292 Sales (gross of excise duty and discounts)* 47,657,252 21,122,149,18152,221,556 21,633,156,478 Closing stock2,434,518838,117,129 2,509,859814,209,811*Includes 183,139 (previous year: 189,854) cases charged to consumption on account of breakages, damages and wastage. (b) Details of traded goods For the year ended For the year ended 31 March 2010 31 March 2009 BeerQuantityAmountQuantity Amount (in cases)(Rs.) (in cases) (Rs.) Opening stock5,0742,222,471 17,479 7,688,487 Purchases 71,560 33,165,396167,82571,873,013 Sales (gross of excise duty and discounts)**75,205 38,638,725180,23096,894,530 Closing stock1,429652,5705,074 2,222,471 **Includes 941 (previous year: 534) cases charged to consumption on account of breakages, damages and wastage.(c) Details of capacity and production(in cases) Particulars For the year ended For the year ended 31 31 March 2010March 2009 Licensed capacity #77,559,542 77,559,542 Installed capacity*73,522,209 73,522,209 Actual production47,581,91152,393,568 * Installed capacity is as certified by management and relied upon by the auditors being a technical matter. # Licensed capacity is 6,049,644 HLs (previous year: 6,049,644 HLs) which is converted in cases considering 7.8 litres per case.(d) Consumption of raw materials and packing materialsParticulars UnitsFor the year ended For the year ended31 March 2010 31 March 2009QuantityAmount (Rs.)QuantityAmount (Rs.) Malt (Note 1)MT51,470 1,243,685,709 56,555 1,490,307,345 BottlesNos599,687,7552,881,926,643 660,535,313 2,979,601,969 Others (Note 2) 2,495,157,9942,377,426,295 Total 6,620,770,3466,847,335,609Note 1: Includes processing charges. Note 2: It is not practicable to furnish quantitative information in view of the large number of items which differ in size and nature, each being less than 10% in value of the total consumption. SKOL Breweries Limited 34. Schedules to the financial statements 38-39 18. Notes to the a