Annual

SKOL Breweries Limited
Annual Report
2011-12
Our people are our enduring advantage
Annual Report 2011-12

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.
Saanjhi Unnati
Progress through Partnership
SKOL Breweries Limited recognizes the role and
contribution of its business partners in the growth of the
Company. In recognition, 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. One such initiative has been to
improve the life of farmers who supply our main raw
material Barley. Towards this end, SKOL Breweries
Limited launched Saanjhi Unnati Programme in 2005.
The majority of 1.5 million tons of yields have grown by 20% to 25%
barley grown each year in India is and the farmers command
feed grade and does not command a preferential price which is 5% on an
premium price. Hence, farmers do average higher than price paid by
not consider it a priority crop and do intermediaries and traders. Since
not invest in appropriate seeds and 2005, the number of farmers who
inputs to improve their yield. have registered as members of the
programme has increased from 1,574
The Saanjhi Unnati Programme to over 8,000.
provides farmers with access to
certified seeds, agronomical advice, The programme also promotes
training, customized support from community development by offering
agricultural specialists on proper extension workshops. More than
irrigation, fertilizer usage and 5,000 non-members have derived
harvesting to enhance the quality of advantage of free agricultural advice
their crops. Further, farmers can and assistance provided by the
source government certified seeds centers and through vocational
and sell their crops in the Saanjhi training camps for rural youth and
Unnati Center. animal health treatment camps.
This programme is extended to The company also benefited as it

farmers in Rajasthan and provides could more than double the amount of
farmers with assured market for their barely procured from this programme
crop, transparent transaction and fair as yields under the programme were
pricing. The Programme has much higher.
contributed significantly to improve
farmers yield and income. Barley
General Information
BOARD OF DIRECTORS AUDIT COMMITTEE
Mr. Harald Harvey - Chairman - w.e.f. 8th Mar 2012 Mr. Mathew Dunn - Chairman
Mr. Ari Mervis Mr. Harald Harvey
Ms. Sue Clark Mr. Ari Mervis
Mr. T.S.R. Subramanian Mr. Paolo Lanzarotti
Mr. Paolo Lanzarotti - Managing Director Ms. Sue Clark
Mr. Mathew Dunn
REGISTERED OFFICE STATUTORY AUDITORS

Unit No. 1021, 2nd Floor B S R & Co.
Solitaire Corporate Park 10 Chartered Accountants
Chakala, Andheri Kurla Road Maruthi Info-Tech Centre
Survey No. 131 - A 11-12/1, Inner Ring Road
Andheri (East) Koramangala
Mumbai - 400093
CORPORATE OFFICE
Jalahalli Camp Road
Yeshwanthpur, Bangalore - 560022
BANKERS
Standard Chartered Bank
Royal Bank of Scotland
Citi Bank N.A
First Rand Bank Limited
REGISTRAR 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
BREWERIES
Charminar Breweries, Medak, AP
Haryana Breweries, Sonepat, Haryana
Mysore Breweries, Bangalore, Karnataka
Pals Distilleries, Aurangabad, Maharashtra
Malabar Breweries, Chalakudy, Kerala
East Coast Breweries & Distilleries, Cuttack, Orissa
SICA Breweries, Puducherry
SABMiller Breweries, Aurangabad, Maharashtra
Rochees Breweries, Neemrana, Rajasthan
Central Distilleries & Breweries, Meerut, UP
01
DIRECTORS
Mr. Ari Mervis Mr. Harald Harvey Ms. Sue Clark

Director and Chairman and Director and
Member Audit Committee Member Audit Committee Member Audit Committee
Mr. T S R Subramanian Mr. Paolo Lanzarotti Mr. Mathew Dunn

Director Managing Director and Director and
Member Audit Committee Chairman Audit Committee
02
Company & Group

Profile
03
Company and Group Profile

SKOL Breweries Limited is the main operating entity in well placed to service the markets quickly and
India of SABMiller Group. SABMiller started it's journey efficiently with a dedicated workforce of over 3,500
in India in the year 2000 and in just a few years, it has people. SKOL Breweries Limited plans to continue to
grown to corner 23% of the Indian beer market with work on creating a national footprint for its brands
brands such as Foster's, Hayward's 5000, Royal (both in terms of quality and content) by modernizing
Challenge, Knock Out, Indus Pride and Miller HighLife and improving efficiencies of plants, introducing new
under its portfolio. A careful brand renovation technologies, improving brand performance in the key
programme, backed by highly proactive marketing beer markets and make forays into newer territories.
support, has put these brands on a steep growth path.
SABMiller plc, London, the ultimate holding company
With 10 high quality breweries located strategically holds indirectly 99.26% equity in SKOL Breweries
across 9 States in India, SKOL Breweries Limited is Limited.
04
Company and Group Profile

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

To be among the 3 most admired beverage To own and nurture local and international
companies in India 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
Our Brands
The year was marked by
innovation which
delighted consumers
07
Now you can enjoy

Miller in India
SABMiller brings "Miller HighLife"
premium award winning American
Style beer from USA which was
introduced in 1903
ch drop of
in sane ly refreshing, ea -
ng crispy an
d ican culture
Besides bei u a ta ste of the Amer
fe gives yo
Miller High Li - Party hard
'
'Work hard
as much as
enjoy work
One should having fun
one enjoys
Be good to yourself, drink responsibly. To make an informed choice about alcohol, log on to www.talkingalcohol.com
08
Mild or Strong
goes down smooth and easy
Royal Challenge Strong

is the newest addition in
our Portfolio. 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, a Premium
Lager gives the
consumer that distinct
and smooth taste
09
Haywards 5000 was the first strong beer which other beer
brands copied. 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. The
Anthem represents true stories of grit and
resolve of common men across India
collected through Hausla Rath which
travelled across 59 cities / towns.
10
Knock Out - the ever refreshing strong

beer is now in a new avatar true to its
refreshing taste
The thermo chromatic label, first of its kind in

India enables customers to differentiate between
warm and cold beer
11
The Art of Chilling has more options now. Foster's

fans can now enjoy this uniquely Australian beer in
strong and draught form
yeah ! its strong and mild
12
Managing Director's
Statement
13
Managing Director's Statement

Dear Shareholders,
I extend hearty greetings to you and present the Annual Report for the year 2011-12. At the outset, I am delighted
to inform you that the name of your company has now been changed to SABMiller India Limited.
The year that was Andhra Pradesh Government's change colour when the beer reaches
revision of sourcing policy based on the optimum temperature for a great
The year 2011-12 was both consumer preference added to the drinking experience, as well as
challenging and encouraging and I increase. enabling consumers to confirm that
am happy to state that we have come the beer he is buying is cold. Further,
through it well. Several internal and Your Company launched an the strategy to launch beer in PET
external factors have contributed to international premium brand - Miller bottles is finding favour with
higher sales revenues vis-à-vis the HighLife which saw good acceptance consumers and is showing increasing
previous year. I am also happy to from the markets it was launched in. sales trend. We expect good growth in
share that some of our strategies have Fosters Strong and Royal Challenge this area as we extend the
proved successful in attracting new Strong were launched and the same geographical distribution of this pack.
consumers and thereby contributing have been received well by the
to increase in sales. While the consumers and trade. Your company During the year under review, Knock
industry growth and supply constraint also launched a first of its kind Out and Foster's witnessed growth of
liberalization in few States helped us innovation, Thermo chromatic labels 17% and 5% respectively in volumes.
in garnering higher value share, for the Knock Out brand. The label will However, Hayward's volume dropped
marginally by 0.2% and Royal
Challenge declined by 29% due to
lower off take in AP & UP.
Considering that the Beer industry
grew only at about 5% during the year
under review, your Company's brands
have performed reasonably well.
14
Managing Director's Statement continued

recharge is done by constructing
Water structure for farmers in Chomu,
Rajasthan and projects are underway
at other locations. 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. 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. Our initiatives on
awareness on HIV / AIDS expanded
to many States since its launch in
2008 with particular focus on truckers
We have also successfully As a responsible corporate and as a who are a part of our supply chain
implemented many cost saving mark of giving back to the community, service providers.
initiatives including changes in we have contributed to the enhancing
production technology and of ground water in the areas we
optimization of brewing processes in operate. Water conservation and
the aftermath of increased raw
material cost. These initiatives along
with introduction of our proprietary
bottle have contributed to substantial
reduction in operating cost.
Sustainable Development
Your company continues to lay
emphasis on sustainable
development in line with our Group's
"Ten Priorities, One Future"
programme. We continued to see
improvement in our water usage and
energy consumption levels. Water
usage stood at 4.4 HL / HL against
Group's global standard of 4.66 HL /
HL while energy usage was at 202.3
MJ / HL against Group's global
standard of 204.5 MJ / HL.
15
Managing Director's Statement continued

Area of focus several representations to the I take this opportunity to thank my
Government and we continue with our colleagues on the Board, our
I take this opportunity to convey my efforts to inform the Government of Business Partners, Financiers,
concern in the GST arena specifically the negative impact of GST on the Employees, Government Authorities
with respect to its treatment towards industry. and the Shareholders for their support
potable alcohol industry. The Central and look forward to their continued
Government has chosen to keep the Future partnership in our journey ahead.
potable alcohol industry out of the
GST in the 115th Constitution We are increasingly focused on Cheers!
Amendment Bill. Exclusion of our driving initiatives in areas where we Paolo Lanzarotti
industry will severely impact our can directly influence our own destiny.
performance on account of double Going forward our performance
taxation as we would be denied continues to depend on many
credit of taxes which we are external factors.
genuinely entitled to. We have made
16
Notice to Members
NOTICE is hereby given that the Special Business deposits or other loans whether
23rd Annual General Meeting of the secured or unsecured by
members of the Company will be held 5. To consider appointment of mortgage, charge, hypothecation,
at Juhu Jagruthi Seminar Hall, 1st Mr. Harald Graham Harvey as lien or pledge of the Company's
Floor, Mithibai College, JVPD Road, Director of the Company. assets and properties whether
Vile Parle (W), Mumbai 400 056 on movable and/or immovable or
Wednesday, the 29th August, 2012 at To consider and if thought fit, to stock-in-trade (including book
4.00 p.m. to transact the following pass, with or without debts, bills, raw materials, stores
business: modification(s) the following and spare parts and components
resolution as an Ordinary in stock or in transit) work-in-
Ordinary Business Resolution: progress and debts and advances
1. To receive, consider and adopt the notwithstanding that the sum or
RESOLVED THAT Mr. Harald
Audited Balance Sheet as at 31st sums so borrowed together with
Graham Harvey, who was
March, 2012 and the Statement of the moneys, if any, already
appointed as an Additional Director
Profit & Loss for the year ended on borrowed by the Company (apart
of the Company by the Board in
that date and the Report of the from the temporary loans obtained
terms of Section 260 of the
Directors and Auditors thereon. from the Company's bankers in the
Companies Act, 1956, who holds
ordinary course of business) may
2. To appoint a Director in place of office till the date of this Annual
exceed in the aggregate the paid-
Mr. Mathew James Dunn, who General Meeting, and in respect of
up capital of the Company and its
retires by rotation at this meeting whom a notice has been received
free reserves which have not been
and being eligible, offers himself from a member under Section 257
set apart for any specific purpose
for re-appointment. of the said Act, be and is hereby
but so that the total amount upto
appointed a Director of the
3. To appoint a Director in place of which the moneys may be so
Company liable to retire by rotation.
Mr. T S R Subramanian, who retires borrowed shall not at any time
by rotation at this meeting and 6. To consider increase in Borrowing exceed Rs. 2,500 Crores.
being eligible, offers himself for re- Powers.
appointment. BY ORDER OF THE BOARD
4. To appoint Auditors for the period To consider and if thought fit, to

Sridhar S
commencing from the conclusion pass, with or without
Company Secretary
of 23rd Annual General Meeting till modification(s), the following
the conclusion of next Annual Resolution as a Special Resolution:
Place: Bangalore
General Meeting and fix their
RESOLVED THAT pursuant to Date: 15th May, 2012
remuneration.
Section 293(1)(d) of the
RESOLVED THAT M / s. B S R & Companies Act, 1956 and other
Co., Chartered Accountants (ICAI enabling and applicable
firm registration number 101248W), provisions, if any, of the said Act,
who retire at the conclusion of this consent be and is hereby
Annual General Meeting be and accorded to the Board of Directors
are hereby appointed as Statutory of the Company for borrowing any
Auditors of the Company till the sum or sums of money from time to
conclusion of next Annual General time from one or more persons,
Meeting at a remuneration to be firms, body corporates, banks,
fixed by the Board of Directors financial institutions or from others
and billed progressively. by way of cash credit, advances,
17
Notice to Members continued

NOTES issue Notices of General Meetings Item No.6
and Annual Report to the
1. A member entitled to attend and Shareholders through electronic At the Annual General Meeting of the
vote at the meeting is entitled to mode via emails and publish on Company held on 15th September,
appoint a proxy to attend and vote the Websites of the Company. 2009, the Members empowered the
on a poll in his/her stead. A proxy Accordingly, with a view to support Board of Directors under Section
need not be a member of the this green initiative of the MCA, the 293(1)(d) of the Companies Act, 1956
Company. Proxies in order to be Company proposes to give option to borrow monies for the business
effective must be deposited at the to its Shareholders to receive purposes of the Company upto a limit
registered office of the Company notices and Annual Report in of Rs. 2,000 Crores. Keeping in view
not less than forty-eight hours electronic mode. The Shareholders the Company's business requirements
before the meeting. A blank proxy are requested to communicate and its investment and growth plans,
form is enclosed. their email IDs to which the it is considered desirable to increase
communication can be sent. A the said borrowing limits to Rs.2,500
2. For convenience of members an Communiqué is attached at the Crores as outlined in the resolution.
attendance slip is also annexed. end of this Annual Report on the
Members are requested to affix procedure to be followed for In terms of the provisions of Section
their signature at the space registering your email ID. 293(1)(d) of the Companies Act,
provided therefore and hand over 1956, approval of the members is
the same at the place of Meeting. sought through the resolution under
The Proxy of a member should
Explanatory Statement item no.6 for such increase in limits.
mark on the attendance slip as pursuant to Section 173(2)
Proxy. Members are also requested of the Companies Act, None of the directors are either
to bring their copies of the Annual directly or indirectly concerned or
Report to the venue of the Meeting.
1956. interested in the said Resolution.
Item No. 5 Resolution is commended for the

3. All queries relating to non-receipt of
share certificates after transfer/ consent of the shareholder.
Mr. Harald Graham Harvey is holding
transmission/dematerialization/ a degree of Bachelor of Social
rematerialization, mandates, Science (Honours) in Sociology. Since
change of address, nomination etc. joining SABMiller in 2009, Mr. Harvey
may be sent to the Registrar & has been responsible for corporate
Share Transfer Agents, Sharepro strategy, pricing and revenue
Services (India) Pvt. Ltd., Samhita management, as well as legal
Warehousing Complex, Gala No.52 services and compliance. Prior to
to 56, Bldg No.13 A-B, Near joining us, he worked with The Monitor
Sakinaka Telephone Exchange, Group as Managing Director, Africa &
Andheri-Kurla, Road, Sakinaka, Global Senior Partner.
Mumbai - 400 072, Tel:022-
67720300 / 67720400 Fax No: 022- None of the directors are either
28591568/28508927, E-mail: directly or indirectly concerned or
sharepro@shareproservices.com interested in the said Resolution.
4. The Ministry of Corporate Affairs Resolution is commended for the

(MCA) has permitted Companies to consent of the shareholders.
18
Directors'
Report
19
11
Directors' Report
Dear Members,
Your Directors have pleasure in presenting their 23rd Report and the Statement of
accounts for the year ended 31st March 2012.
Financial Results brands and variants have shown

(Rupees in Crores) encouraging trends in the markets
Financial Year Financial Year they have been introduced.
2011-12 2010-11
Gross Revenue 2,987.07

Your Board enjoys the unqualified
2,487.86
support of all its financiers whose
Profit/(Loss) before taxation (119.26) (60.36) confidence in the future of your
Less: Provision for taxation
company is evidenced by the fact that
0.15 (0.22)
all borrowings have been made
Profit/(Loss) after taxation (119.41) (60.14) without the bankers taking any
In this annual report, the current year figures are not comparable with the previous year, in view of
charges over your company's assets
demerger of beer business of SABMiller Breweries Private Limited into your company during the and are used for both short term and
current year
long term purposes.
Operations Breweries Private Limited. There is a

thrust on reduction in operating Demerger of Beer business
The revenue of your Company during expenses by stringent controls and of SABMiller Breweries
the year 2011-12 has significantly monitoring. Due to rising interest cost Private Limited into your
improved. The turnover increased by and utilisation of short-term funds
Company
20% to Rs. 2,987 Crores (includes towards long-term purposes, your
Rs. 205 Crores of demerged beer company is evaluating various options During the year under review, the
business of SABMiller Breweries of recapitalising the business. beer business of SABMiller Breweries
Private Limited) from Rs. 2,487 Crores Private Limited, a company of
in the previous year. Increase in The capacity of the company has
SABMiller Group has been demerged
volume is mainly contributed by been augmented by entering into
into your Company vide the Order
increasing market share in Andhra contract packing arrangements in the
passed by the Hon'ble High Court of
Pradesh, leveraging of industry States of Orissa and Punjab. The
growth in Rajasthan and Karnataka, introduction of proprietary bottle has
innovation led growth in Maharashtra also paid rich dividend and the
and also the addition of sales of company is able to obtain return of its
SABMiller Breweries Private Limited bottles at competitive rates. Efforts by
whose Brewery business was other brewers to use the bottles
demerged and transferred to your introduced by the company have
company. Cash losses for the year been successfully defended.
are mainly due to high interest cost on
Your company has introduced many
working capital to meet higher sales
innovations and variants during the
volume and borrowings for capital
year under review and has expanded
expenditure, unplanned maintenance
its portfolio. Miller HighLife, Fosters
work in breweries, higher actuarial
Strong and Royal Challenge Strong
valuation of leave salary and gratuity
beers have been launched. Your
and absorption of loss incurred by
Company also introduced beer in
brewing business of SABMiller
convenient packs of 250 ml. All these
20
Directors' Report continued

Bombay on 29th March 2012 sanctioning
the Scheme of Arrangement.
Consequent to the demerger, the beer
business of SABMiller Breweries Private
Limited which inter alia includes all the
assets and liabilities, employees, all
licences and permits of the beer
business stand transferred to your
Company. Accordingly, all the breweries
of the SABMiller Group in India are now
under the control of 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.
Dividend Sustainable Development and Corporate

Social Responsibility
As the Company has incurred loss during the year, the
Directors do not recommend any dividend on the equity As a part of "Ten Priorities One Future" sustainable
capital. development programme of the SABMiller Group, your
company continued with many corporate social
responsibility initiatives during the year under review.
Campaign on Responsible Drinking

To promote responsible consumption, your company
initiated a number of awareness programmes and
partnerships with community stakeholders across the
country.
"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.
Phase two of the mass communication campaign on

responsible drinking in Puducherry in partnership with a
local NGO (SONIC) was launched in October.
21

assessment for six breweries has
been carried out and Water structure
has been constructed in Chomu in
Jaipur District of Rajasthan.
The ground water management

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

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

Acknowledgement Disclosure as per the practice that targets systematic
improvement of operation
Your Directors wish to place on record Companies (Disclosure of efficiencies through practices like
their appreciation for contribution Particulars in the Report of Teamwork and Asset care. A
made by employees at all levels. The significant part of energy savings is
Directors would also like to
Directors) Rules, 1988 due to such improved operation
acknowledge the continued support practices.
A. Conservation of Energy
extended by Bankers, Distributors,
Shareholders, Customers and 5. We continue to invest in our people.
Energy efficiency in breweries is
Suppliers. Four of our operation personnel
achieved through a process of
have been certified as accredited
continuous improvement. The Company
FOR AND ON BEHALF OF THE BOARD Energy Auditors / Energy Managers
continues to identify opportunities
from the Bureau of Energy Efficiency
through benchmarking globally against
Harald Harvey Paolo Lanzarotti to drive continuous improvement in
breweries of the SABMiller group.
energy utilization in breweries.
Place: Bangalore
The company has a robust energy
Date: 15th May, 2012 B. Technology Absorption
management practice that involves:
The company has not made any
1. Extensive benchmarking against
purchases of technology or made
global standards across SABMiller
payments towards transfer of
group.
technology during the year under
2. Energy collaboration forum started to review.
share knowledge and implement
cross brewery best-in-class C. Foreign Exchange Earnings and
practices very quickly. Outgo
3. Routine reviews of investments for During the year, the Company has
energy improvements initiatives. For earned Rs.32.03 Crores in foreign
example Variable Speed Drives on exchange. An amount of Rs.64.54
refrigeration equipment, resizing of Crores was incurred in foreign
the Boilers are done on a continuous exchange.
basis. Such investments are made
at appropriate times after a thorough
review of benefits, costs, existing FOR AND ON BEHALF OF THE BOARD
practices and people capabilities.
Harald Harvey Paolo Lanzarotti
4. Manufacturing way (Mway)
introduced in most of the breweries Place: Bangalore
in India. Mway is a global SABMiller Date: 15th May, 2012
24
Annual Financial
Statements
25
Auditors' Report
To the Members of SKOL Breweries Further to our comments in the (vi) In our opinion and to the best of
Limited Annexure referred to above, we our information and according to
report that: the explanations given to us, the
We have audited the attached said accounts give the
balance sheet of SKOL Breweries (i) we have obtained all the information required by the
Limited ("the Company") as at 31 information and explanations, Companies Act, 1956, in the
March 2012, the statement of profit which to the best of our manner so required and give a
and loss and the cash flow statement knowledge and belief were true and fair view in conformity
for the year ended on that date necessary for the purpose of our with the accounting principles
annexed thereto. These financial audit; generally accepted in India:
statements are the responsibility of
the Company's management. Our (ii) in our opinion, proper books of a. in the case of the balance
responsibility is to express an opinion account as required by law have sheet, of the state of affairs of
on these financial statements based been kept by the Company so far the Company as at 31 March
on our audit. as appears from our examination 2012;
of those books;
We conducted our audit in b. in the case of the statement of
accordance with auditing standards (iii) the balance sheet, the statement profit and loss, of the loss of
generally accepted in India. Those of profit and loss and the cash the Company for the year
standards require that we plan and flow statement dealt with by this ended on that date; and
perform the audit to obtain report are in agreement with the
reasonable assurance about whether books of account; c. in the case of the cash flow
the financial statements are free of statement, of the cash flows of
(iv) in our opinion, the balance sheet, the Company for the year
material misstatement. An audit
the statement of profit and loss ended on that date.
includes examining, on a test basis,
and the cash flow statement dealt
evidence supporting the amounts
with by this report comply with for B S R & Co.
and disclosures in the financial
the accounting standards Firm registration number: 101248W
statements. An audit also includes
referred to in sub-section (3C) of Chartered Accountants
assessing the accounting principles
Section 211 of the Companies
used and significant estimates made
Act, 1956; Zubin Shekary
by management, as well as
evaluating the overall financial Partner
(v) on the basis of written
statement presentation. We believe Membership No. 48814
representations received from the
that our audit provides a reasonable
directors of the Company as on Bangalore
basis for our opinion.
31 March 2012, and taken on Date: 15 May 2012
record by the Board of Directors,
As required by the Companies
we report that none of the
(Auditor's Report) Order, 2003, as
directors is disqualified as on 31
amended, ("the Order") issued by the
March 2012 from being
Central Government of India in terms
appointed as a director in terms
of sub-section (4A) of Section 227 of
of clause (g) of sub-section (1) of
the Companies Act, 1956, we
Section 274 of the Companies
enclose in the Annexure a statement
Act, 1956;
on the matters specified in
paragraphs 4 and 5 of the Order.
26
Auditors' Report continued

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

generally been regularly by the Central Government. (b) According to the information
deposited during the year by and explanations given to us,
According to the information
the Company with the there are no dues of Wealth
and explanations given to us,
appropriate authorities though Tax and Cess which have not
there are no undisputed
there has been a slight delay in been deposited with the
amounts payable in respect of
a few cases. As explained to appropriate authorities on
Provident Fund, Employees'
us, the Company did not have account of any dispute. The
State Insurance, Income-tax,
any dues on account of following dues of Income-tax,
Wealth Tax, Service Tax, Sales
Investor Education and Sales Tax/ Value Added Tax,
Tax/ Value Added Tax,
Protection Fund. Service Tax, Customs Duty and
Customs Duty, Excise Duty,
Excise Duty have not been
There are no dues on account Cess and other material
deposited by the Company on
of Cess under section 441A of statutory dues which were in
account of disputes.
the Companies Act, 1956 since arrears as at 31 March 2012 for
the date from which the a period of more than six
aforesaid section comes into months from the date they
force has not yet been notified became payable.
Name of the Statute Nature of the Dues Amount (Rs.) Period to which the Forum where dispute
amount relates is pending
Punjab Excise Act, Duty on beer loss 11,245,236 1974-75 to 1990-91 Financial
1914 Commissioner,
Haryana
Orissa and Bihar Interest on excise loan 3,222,705 1988 - 89 Orissa High Court
Excise Act, 1965 draw back scheme
Adhesive label fees 10,877,028 2001-02 to 2004-05 Orissa High Court
Duty on sediment beer 1,284,936 2002 -03 Orissa High Court
Overtime wages of 327,231 2005-06 Orissa High Court

excise staff
Bombay Prohibition Supervision charges 550,930 1983-84 to 1988-89 Bombay High Court
Act, 1949 of excise staff
Duty on expired beer 1,037,085 2000-01 Commissioner of

State Excise,
Maharashtra
Karnataka Excise Act, Overtime wages of 3,005,062 1998-99 to 2004-05 Commissioner of

1965 excise staff State Excise,
Karnataka
28

Karnataka VAT Act, Taxes on bottle 217,154,152 April 2005 to March Karnataka High Court
2003 deposit 2011
Orissa Sales Tax Act, Sales Tax 35,029,024 1994-95 to 2000-01 Sales Tax Tribunal,
1947 Orissa
Orissa Entry Tax Act, Sales Tax 242,508 2000-01 Sales Tax Tribunal,
1999 Orissa
Delhi Sales Tax Act, Sales Tax 576,486 2002-03 Assistant

1975 Commissioner of
Commercial Taxes
(Appeals), New Delhi
Sales Tax 217,200,913 2007-08 Additional

Commissioner-II,
Department of Trade
& Taxes, New Delhi
Bombay Sales Tax Sales Tax 1,514,943 1992-93 Appellate Tribunal,

Act, 1959 Maharashtra
Sales Tax 4,139,154 1995-96 Sales Tax Tribunal,

Maharashtra
Sales Tax 1,433,060 2008-09 Additional

Commissioner
(Appeals),
Maharashtra
Sales Tax 1,445,537 1996-97 Sales Tax Tribunal,

Maharashtra
Bombay Sales Tax Sales Tax 12,317,495 2001-02 Sales Tax Tribunal,
Act, 1959 & Central Maharashtra
Sales Tax Act, 1956
Sales Tax 8,050,922 2002-03 Joint Commissioner

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

(Appeals), Mumbai
29

Andhra Pradesh Sales Tax 3,675,677 1991-92 to 1992-93 Andhra Pradesh High
General Sales Tax Act, Court
1957
Pondicherry General Sales Tax 11,982,000 1981-82 to 1984-85, Assessing Authority,

Sales Act, 1967 1997-98 to 1998-99 Pondicherry
Haryana Sales Tax Sales Tax 754,349 1989-90 to 1996-97, Sales Tax Tribunal,
Act, 1973 1998-99 to 2003-04 Haryana
Kerala Sales Tax Act Penalty 221,634 2005-06 to 2007-08 Sales Tax Tribunal,
Kerala
Uttar Pradesh Tax on Entry Tax 14,114,578 2003-04 to 2011-12 Supreme Court
Entry of Goods Act,
2000
Haryana Local Area Local Area 10,050,426 2000-01 to 2003-04 Chandigarh High
Development Tax Act, Development Tax Court
2000
Finance Act, 1994 Service Tax and 32,129,640 2006-07 to 2007-08 Customs Excise and
penalty Service Tax Appellate
Tribunal, Mumbai
Service Tax and 34,795,634 April 2008 to March Customs Excise and
penalty 2010 Service Tax Appellate
Tribunal, Mumbai
Customs Act, 1962 Customs Duty 261,555 2007-08 Customs Excise and
Service Tax Appellate
Tribunal, Mumbai
Income-tax Act, 1961 Fringe benefit tax 53,308,341 2006-07 Commissioner of

Income tax (Appeals)
Income-tax 60,253,760 2007-08 Income Tax Appellate

Tribunal, Mumbai
Note: The amounts paid under protest have been reduced from the amounts demanded in arriving at the aforesaid disclosure.
30

x. The Company has accumulated xv. According to the information and xxi. According to the information and
losses amounting to explanations given to us, the explanations given to us, two
Rs.4,914,138,056 at the end of Company has not given any employees misappropriated
the financial year which is more guarantee for loans taken by scheme disbursements
than fifty per cent of its net worth. others from banks or financial amounting to Rs. 735,630.
The Company has incurred cash institutions. Services of the employees have
losses in the current financial since been terminated.
year. No cash losses were xvi. In our opinion and according to According to the information and
incurred in the immediately the information and explanations explanations given to us, no other
preceding financial year. given to us, the term loans taken fraud on or by the Company has
by the Company have been been noticed or reported during
xi. In our opinion and according to applied for the purpose for which the course of our audit.
the information and explanations they were raised.
given to us, the Company has not for B S R & Co.
defaulted in repayment of dues to xvii. According to the information and
explanations given to us and on Firm registration number: 101248W
its bankers. The Company did
not have any outstanding dues to an overall examination of the Chartered Accountants
any financial institutions or balance sheet of the Company,
we are of the opinion that funds Zubin Shekary
debenture holders during the
year. raised on short-term basis Partner
amounting to Rs. 5,439,955,901 Membership No. 48814
xii. The Company has not granted any have been used for long-term
loans and advances on the basis purposes. Bangalore
of security by way of pledge of Date: 15 May 2012
shares, debentures and other xviii. The Company has not made any
securities. preferential allotment of shares to
companies/ firms/ parties covered
xiii. In our opinion and according to in the register maintained under
the information and explanations Section 301 of the Companies
given to us, the Company is not a Act, 1956.
chit fund or a nidhi/ mutual benefit
fund/ society. xix. The Company did not have any
outstanding debentures during
xiv. According to the information and the year.
explanations given to us, the
Company is not dealing or trading xx. The Company has not raised any
in shares, securities, debentures money by public issues during
and other investments. the year.
31
Balance Sheet
Rs.
Note As at 31 March 2012 As at 31 March 2011
EQUITY AND LIABILITIES

Shareholders' funds
Share capital 2.1 2,311,837,450 2,311,837,450
Shares pending allotment to the shareholders
of the Transferor company 2.23 72,419,910 -
Reserves and surplus 2.2 1,415,155,878 2,276,922,775
3,799,413,238 4,588,760,225
Non-current liabilities
Long-term borrowings 2.3 2,346,223,893 1,821,580,950
Long-term provisions 2.4 481,508,090 472,658,732
Other long term liabilities 2.5 8,349,563 21,008,568
2,836,081,546 2,315,248,250
Current liabilities
Short-term borrowings 2.6 8,545,818,645 7,682,377,290
Trade payables 2.7 1,966,338,378 1,643,966,807
Other current liabilities 2.8 3,506,607,600 2,351,725,628
Short-term provisions 2.9 33,919,456 27,093,475
14,052,684,079 11,705,163,200
20,688,178,863 18,609,171,675
ASSETS
Non-current assets
Fixed assets
Tangible assets 2.10 8,510,354,658 8,480,202,138
Intangible assets 2.10 2,407,873,120 2,574,859,380
Capital work-in-progress 371,316,219 158,768,000
11,289,543,997 11,213,829,518
Investments 2.11 11,489,057 11,391,402

Long-term loans and advances 2.12 774,417,631 672,808,754
12,075,450,685 11,898,029,674
Current assets
Inventories 2.13 2,742,344,715 2,187,251,686
Trade receivables 2.14 4,652,810,767 3,454,566,614
Cash and bank balances 2.15 178,924,814 380,499,623
Short term loans and advances 2.16 1,038,647,882 688,824,078
8,612,728,178 6,711,142,001
20,688,178,863 18,609,171,675
Significant accounting policies 1
Notes to the financial statements 2
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. for SKOL Breweries Limited

Firm registration number : 101248W
Chartered Accountants
Zubin Shekary Paolo Lanzarotti Harald Harvey

Partner Managing Director Director
Membership No. 48814
Paul D’Silva Sridhar S
Chief Financial Officer Company Secretary
Bangalore Bangalore
Date: 15 May 2012 Date: 15 May 2012
32
Statement of Profit and Loss

Rs.
Note For the year ended For the year ended
31 March 2012 31 March 2011
Income
Revenue from operations 2.17 29,870,679,866 24,878,609,679
Less: Excise duty (11,463,150,947) (8,686,862,970)
Less: Discounts (1,744,677,186) (1,332,453,508)
16,662,851,733 14,859,293,201
Other income 2.18 46,072,530 114,216,012
16,708,924,263 14,973,509,213
Expenses
Cost of materials consumed 8,604,113,675 7,436,922,729
Purchase of stock in trade 2,371,323 10,127,036
Changes in inventories of finished goods,
work-in-progress and traded goods 2.19 (66,405,610) 130,889,053
Employee benefits expense 2.20 1,400,216,555 1,144,002,591
Finance cost 2.21 1,152,899,787 818,568,659
Depreciation and amortisation 2.10 872,589,246 950,690,263
Reversal of impairment loss 2.42 (17,103,108) -
Other expenses 2.22 5,952,827,718 5,085,948,153
17,901,509,586 15,577,148,484
Loss before tax (1,192,585,323) (603,639,271)

Tax expense:
- current tax - -
- pertaining to earlier years (reversal) - (2,286,091)
- fringe benefit tax pertaining to earlier years 2.36 1,546,002 -
- deferred tax (credit)/ charge - -
- wealth tax - 19,197
Loss for the year (1,194,131,325) (601,372,377)
Earnings per equity share (par value; Rs.10 each)

- Basic and diluted 2.28 (5.01) (2.60)
Significant accounting policies 1

Notes to the financial statements 2
The notes referred to above form an integral part of the statement of profit and loss



Bangalore Bangalore
33
Notes to the financial statements

1. Significant accounting policies
Background net of sales tax, sales returns
These financial statements,
and trade discount. Sales are
SKOL Breweries Limited ("the therefore, do not include any
presented both gross and net
Company" or "SKOL") was adjustments relating to
of excise duty.
incorporated as a private limited recoverability and classification
company under the Companies Act, of asset amounts or to (ii) Income from contract bottling
1956 on 18 November 1988. The classification and amount of Income from contract bottling
Company is primarily engaged in the liabilities that may be is recognised when the right
business of brewing, packaging, necessary if the Company was to receive bottling fee is
distribution, marketing and sale of unable to continue as a going established which normally
beer. concern. takes place on dispatch of
goods by contract bottlers to
1.1 Basis of preparation 1.3 Use of estimates its customers.
The financial statements have The preparation of financial
(iii) Interest
been prepared and presented statements in conformity with
Interest income is recognised
under the historical cost generally accepted accounting
using the time proportion
convention on the accrual basis principles in India requires
basis taking into account the
of accounting. The financial management to make estimates
amount outstanding and the
statements have been prepared and assumptions that affect the
interest rate applicable.
to comply in all material respects reported amounts of assets and
with the mandatory Accounting liabilities and disclosure of (iv) Sale of spent malt and scrap
Standards ('AS') prescribed by contingent liabilities on the date of Revenue from sale of spent
Companies (Accounting the financial statements and the malt and scrap is recognised
Standards) Rules, 2006 and the results of operations during the on transfer of all the
relevant provisions of the reporting period end. Actual significant risks and rewards
Companies Act, 1956, to the results could differ from those of ownership to the buyer
extent applicable. These financial estimates. Any revision to which normally takes place on
statements are prepared and accounting estimates is despatch of goods. The
presented in Indian Rupees. recognised prospectively in amount recognised as sale is
current and future periods. net of sales tax and sales
1.2 Going concern returns.
1.4 Revenue recognition
These financial statements have 1.5 Fixed assets
been prepared on a going Revenue is recognised to the
concern basis, notwithstanding extent that it is probable that the Fixed assets are carried at cost of
accumulated losses and reliance economic benefits will flow to the acquisition or construction less
on short term borrowings due to Company and the revenue can be accumulated depreciation and
the following considerations: measured reliably. provision for impairment of assets.
The cost of fixed assets includes
– Expected steady future growth (i) Sale of goods freight, duties, taxes and other
reflected in financial Revenue from sale of incidental expenses related to the
projections prepared by the manufactured and traded acquisition or construction of the
management; goods is recognised on respective assets. Borrowing
transfer of all the significant costs directly attributable to
– Expected continual technical
risks and rewards of acquisition or construction of
and financial support by the
ownership to the buyer which those fixed assets which
SABMiller group; and
normally takes place on necessarily take a substantial
– Subsequent renewal of short despatch of goods. The period of time to get ready for
term borrowings from banks. amount recognised as sale is their intended use are capitalised
34

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

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

For forward exchange contracts and profit and loss account on an obligation or a present obligation
other derivatives that are not covered accrual basis. that may, but probably will not,
by AS 11 - 'The Effects of Changes in require an outflow of resources.
Foreign Exchange Rates' and that (iii) Gratuity, which is a defined When there is a possible
relate to a firm commitment or highly benefit scheme is provided obligation or a present obligation
probable forecast transactions, the for based on an actuarial that the likelihood of outflow of
Company has adopted the principles valuation carried out by an resources is remote, no provision
of AS 30 - 'Financial Instruments: independent actuary as at the or disclosure is made.
Recognition and Measurement' with balance sheet date. Actuarial
effect from 1 April 2008. Derivative gains/ losses are recognised Provisions for onerous contracts,
financial instruments, which qualify for immediately in the profit and i.e. contracts where the expected
cash flow hedge accounting and loss account and are not unavoidable costs of meeting the
where Company has met all the deferred. Only such changes obligations under the contract
conditions of cash flow hedge in legislation are taken into exceed the economic benefits
accounting, are fair valued at balance account while providing for expected to be received under it,
sheet date and the resultant gratuity that have been are recognised when it is
exchange loss/ gain is enacted upto the balance probable that an outflow of
debited/credited to the hedge sheet date. resources embodying economic
reserve. This loss/ gain would be benefits will be required to settle a
(iv) Compensated absences are present obligation as a result of
recorded in profit and loss account
provided for based on an an obligating event, based on a
when the underlying transactions
actuarial valuation carried out reliable estimate of such
affect earnings. Other derivative
by an independent actuary as obligation.
instruments that relate to a firm
commitment or a highly probable at the balance sheet date.
forecast transaction and that do not 1.15 Taxation
1.13 Leases
qualify for hedge accounting have Income-tax expense comprises
been recorded at fair value at the Leases where the lessor current tax (i.e. amount of tax for
reporting date and the resultant effectively retains substantially all the year determined in
exchange loss/ gain has been the risks and rewards of accordance with the Income-tax
debited/ credited to profit and loss ownership of the leased asset are law) and deferred tax charge or
account for the year. classified as operating leases. credit (reflecting the tax effects of
Operating lease payments are timing differences between
1.12 Employee benefits recognised as an expense in the accounting income and taxable
(i) Contributions to provident profit and loss account on a income for the year). The deferred
fund, which is a defined straight-line basis over the lease tax charge or credit and the
contribution scheme, are term. corresponding deferred tax
charged to the profit and loss liabilities or assets are recognised
1.14 Provisions and contingent using the tax rates that have been
account on an accrual basis.
liabilities enacted or substantively enacted
(ii) The Company has an The Company recognises a by the balance sheet date.
arrangement with Life provision when there is a present Deferred tax assets are
Insurance Corporation of obligation as a result of an recognised only to the extent
India to administer its obligating event that probably there is reasonable certainty that
superannuation scheme, requires outflow of resources and the assets can be realised in
which is a defined a reliable estimate can be made future; however, where there is
contribution scheme. The of the amount of the obligation. A unabsorbed depreciation or
contributions to the said disclosure of a contingent liability carried forward business loss
scheme are charged to the is made when there is a possible under taxation laws, deferred tax
37

assets are recognised only if 1.16 Earnings per share received in exchange for the
there is a virtual certainty of grant of such options is
The basic earnings per share is
realisation of such assets. recognised as an expense. The
computed by dividing the net
amount recognised is spread
Deferred tax assets are reviewed profit or loss attributable to equity
over the vesting period which is
as at each balance sheet date shareholders for the year by the
also the period over which some
and written down or written up to weighted average number of
of the scheme performance
reflect the amount that is equity shares outstanding during
criteria relate. At each balance
reasonably/ virtually certain (as the year. The number of equity
sheet date, the estimates of the
the case may be) to be realised. shares used in computing diluted
number of options that are
earnings per share comprises the
expected to become exercisable
The Company offsets, the current weighted average number of
are revised. It recognises the
(on a year on year basis) and shares considered for deriving
impact of the revision of the
deferred tax assets and liabilities, basic earnings per share, and
original estimates, if any, in the
where it has a legally enforceable also the weighted average
profit and loss account over the
right and where it intends to settle number of equity shares, which
remaining vesting period. The
such assets and liabilities on a would have been issued on
effect of uncertainty as to whether
net basis. conversion of all potentially
any performance criteria of share
dilutive equity shares. Potential
Minimum Alternative Tax ('MAT') options will be met is dealt with
dilutive equity shares are deemed
credit is recognised as an asset by estimating the probability of
converted as of the beginning of
only when and to the extent there shares vesting and therefore the
the year, unless they have been
is convincing evidence that the cost is adjusted and readjusted
issued at a later date. The
Company will pay normal Income- for the probability of vesting in the
potentially dilutive equity shares
tax during the specified period. vesting period.
have been adjusted for the
In the year in which the MAT proceeds receivable had the 1.18 Cash flow statement
credit becomes eligible to be shares been actually issued at a
recognised as an asset in fair value (i.e. the average market Cash flows are reported using the
accordance with the value of the outstanding shares). indirect method, whereby the net
recommendations contained in In computing the dilutive earnings profit before tax is adjusted for
the Guidance Note issued by the per share, only potential equity the effects of transactions of a
Institute of Chartered shares that are dilutive and that non-cash nature and any
Accountants of India ('ICAI'), the either reduces the earnings per deferrals or accruals of past or
said asset is created by way of a share or increases loss per share future cash receipts or payments.
credit to the profit and loss are included. The cash flows from regular
account. The Company reviews revenue generating, investing
the same at each balance sheet 1.17 Employee stock compensation and financing activities of the
date and writes down the carrying cost Company are segregated.
amount of MAT credit entitlement The Company applies intrinsic
to the extent there is no longer value method of accounting for
convincing evidence to the effect stock options granted by the
that Company will pay normal ultimate holding company to the
Income-tax during the specified employees of the Company after
period. 1 April 2005. The intrinsic value
of the employee services
38
2. Notes to the financial statements

Rs.
2.1 Share capital As at As at
31 March 2012 31 March 2011
Authorised
300,000,000 (previous year: 300,000,000) equity shares of Rs. 10 each 3,000,000,000 3,000,000,000
3,000,000,000 3,000,000,000
Issued, subscribed and paid up
231,183,745 (previous year: 231,183,745) equity shares of Rs. 10 each
fully paid up 2,311,837,450 2,311,837,450
2,311,837,450 2,311,837,450
(a) List of persons holding more than 5 percent shares in the Company
Name of the share holder As at 31 March 2012 As at 31 March 2011

No. of shares % holding No. of shares % holding
SABMiller Breweries Private Limited 142,067,977 61.45 142,067,511 61.45

SABMiller Asia BV 87,341,038 37.78 87,341,038 37.78
(b) Reconciliation of the number of shares outstanding at the beginning and at the end of the year
Particulars As at As at
31 March 2012 31 March 2011
Number of shares at the beginning of the year 231,183,745 231,183,745
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 231,183,745 231,183,745
Of the above, 142,067,977 (previous year: 142,067,511) equity shares of Rs. 10 each are held by SABMiller Breweries Private Limited,
the immediate holding company. 87,341,038 (previous year: 87,341,038) equity shares of Rs. 10 each are held by SABMiller Asia BV.
SABMiller plc is the ultimate holding company.
The Company has issued only one class of equity shares having a par value of Rs. 10 each. All equity shares carry similar voting rights
of 1:1 and similar dividend rights.
There have been no buyback of shares, issue of shares pursuant to contract without payment being received in cash for the period of
five years immediately preceding the balance sheet date.
2.2 Reserves and surplus As at As at

31 March 2012 31 March 2011
Capital reserve 2,000,000 2,000,000

2,000,000 2,000,000
Securities premium account 6,138,637,748 6,138,637,748
6,138,637,748 6,138,637,748
Amalgamation adjustment reserve/ (deficit) account
Opening balance (1,457,236,076) (1,457,236,076)
Add: On account of scheme of arrangement (refer to note 2.23(b)) 427,492,946 -
(1,029,743,130) (1,457,236,076)
39

Rs.
2.2 Reserves and surplus continued As at As at
31 March 2012 31 March 2011
Surplus/ (deficit)
General reserve
Opening balance 1,218,399,316 1,218,399,316
Add/(Less): Movement during the year - -
1,218,399,316 1,218,399,316
Debit balance in profit and loss account brought forward (3,624,878,213) (3,023,505,836)
Add: Loss for the year (1,194,131,325) (601,372,377)
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 2.23(c)) (95,128,518) -
(4,914,138,056) (3,624,878,213)
(3,695,738,740) (2,406,478,897)
1,415,155,878 2,276,922,775
2.3 Long-term borrowings As at As at

31 March 2012 31 March 2011
Unsecured
Term loans
- external commercial borrowings from banks 2,292,142,686 1,771,759,478
Loans and advances from related party (refer to note 2.35) 54,081,207 49,821,472
2,346,223,893 1,821,580,950
(a) Corporate guarantees have been given by SABMiller Plc for the external commercial
borrowings from banks.
(b) Terms of repayment:
(i) External commercial borrowings from Standard Chartered Bank are repayable
after a period of 5 years from each drawdown date. Of the above outstanding
balance in the current year, Rs. 1,402,355,186 and Rs. 889,787,500 are due for
repayment in the financial year 2015-16 and 2016-17 respectively.
(ii) Tenure and terms for repayment have not been specified for loans and advances
from related party.
(c) There have been no defaults in repayment of principal and interest during the current
year and previous year.
2.4 Long-term provisions As at As at

31 March 2012 31 March 2011
Provision for gratuity (refer to note 2.32) 81,541,629 66,381,856

Provision for compensated absences 36,723,981 35,104,636
Provision for claims 363,242,480 371,172,240
481,508,090 472,658,732
2.5 Other long term liabilities As at As at

31 March 2012 31 March 2011
Derivative financial liabilities 8,349,563 21,008,568

8,349,563 21,008,568
40

Rs.
2.6 Short-term borrowings As at As at
31 March 2012 31 March 2011
Loan from banks repayable on demand
Unsecured:
(a) from banks
- bank overdraft 125,818,645 309,538,851
(b) from related parties
- loans from holding company (refer to note 2.35) - 2,338,439
Other loans and advances
Unsecured:
Working capital loan from banks 8,420,000,000 7,370,500,000
8,545,818,645 7,682,377,290
(a) Working capital loan from banks are due for repayment or renewal within a period of 12
months.
(b) There has been no defaults in repayment of principal and interest during the current year
and previous year.
2.7 Trade payables As at As at

31 March 2012 31 March 2011
Trade payables
- Dues to micro and small enterprises (refer to note 2.39) 31,187,466 14,901,889
- Dues to other creditors 1,831,407,743 1,500,694,708
- Acceptances 103,743,169 128,370,210
1,966,338,378 1,643,966,807
2.8 Other current liabilities As at As at

31 March 2012 31 March 2011
Current maturities of long term debts 572,488,800 -

Interest accrued but not due on borrowings 81,039,779 53,521,311
Payable to related parties (refer to note 2.35) 193,904,976 291,103,184
Deposits from customers and del credre agents 237,095,214 217,478,239
Book overdraft 39,787,220 1,456,327
Excise duty payable 353,136,730 317,697,956
Other liabilities
- statutory 434,368,757 242,166,580
- derivative financial liabilities 8,041,959 399,544
- for expenses 1,586,744,165 1,227,902,487
3,506,607,600 2,351,725,628
2.9 Short-term provisions As at As at

31 March 2012 31 March 2011
Provision for gratuity (refer to note 2.32) 275,801 -

Provision for compensated absences 10,584,963 4,593,346
Provision for fringe benefit tax (net of advance tax) 5,047,648 4,489,085
Provision for income-tax (net of advance tax and tax deducted at source) 18,011,044 18,011,044
33,919,456 27,093,475
41
2.10 Fixed assets Rs.
Description Gross block Accumulated depreciation Provision for Net block

impairment as
As at Acquired on Additions Deletions As at As at Acquired on Charge Deletions As at at As at As at
1 April 2011 scheme of 31 March 2012 1 April 2011 scheme of 31 March 2012 31 March 2012 31 March 2012 31 March 2011
arrangement arrangement (refer note iii
(refer note ii (refer note ii below)
below) below)
Tangible assets
Freehold land 405,346,807 - - - 405,346,807 - - - - - 16,600,000 388,746,807 388,746,807
Leasehold land 15,831,621 13,095,299 30,758,966 - 59,685,886 7,605,730 2,146,422 824,942 - 10,577,094 - 49,108,792 8,225,891
Leasehold improvements 10,196,909 8,083,434 - - 18,280,343 6,307,926 2,289,285 2,250,511 - 10,847,722 - 7,432,621 3,888,983
Buildings 2,309,742,428 93,402,982 50,070,942 6,131,887 2,447,084,465 347,449,594 35,018,167 83,977,675 5,298,540 461,146,896 10,043,449 1,975,894,120 1,951,532,720
Plant and machinery 8,672,567,836 476,183,516 371,221,028 122,984,311 9,396,988,069 2,517,827,318 326,109,939 559,837,625 98,604,263 3,305,170,619 72,835,054 6,018,982,396 6,063,130,683
Computer equipment 130,205,588 6,410,154 31,504,123 32,228,166 135,891,699 96,618,382 6,367,165 20,365,213 29,813,901 93,536,859 860,707 41,494,133 32,726,499
Furniture, fittings and
87,622,963 6,908,556 6,264,562 11,146,478 89,649,603 56,673,846 5,991,954 9,037,032 10,974,742 60,728,090 787,113 28,134,400 30,162,004
office equipment
Motor vehicles 16,954,678 233,335 - 8,998,701 8,189,312 14,928,789 86,111 455,201 8,079,516 7,390,585 237,338 561,389 1,788,551
11,648,468,830 604,317,276 489,819,621 181,489,543 12,561,116,184 3,047,411,585 378,009,043 676,748,199 152,770,962 3,949,397,865 101,363,661 8,510,354,658 8,480,202,138
Intangible assets
Brands 3,410,920,245 - - - 3,410,920,245 890,971,373 - 170,546,012 - 1,061,517,385 - 2,349,402,860 2,519,948,872
42
Computer software 145,025,202 - 28,854,787 - 173,879,989 90,114,694 - 25,295,035 - 115,409,729 - 58,470,260 54,910,508
3,555,945,447 - 28,854,787 - 3,584,800,234 981,086,067 - 195,841,047 - 1,176,927,114 - 2,407,873,120 2,574,859,380
Total 15,204,414,277 604,317,276 518,674,408 181,489,543 16,145,916,418 4,028,497,652 378,009,043 872,589,246 152,770,962 5,126,324,979 101,363,661 10,918,227,778 11,055,061,518
Previous year 14,208,781,789 - 1,033,569,734 37,937,246 15,204,414,277 3,112,513,576 - 950,690,263 34,706,187 4,028,497,652 120,855,107 11,055,061,518
(i) The company does not have any asset purchased on finance lease.
(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 2.23).
Further the table above includes additions and deletions from the period 1 April 2009 to 31
March 2011 as follows: Rs. (iii) Provision for impairment Rs.
Description Gross block Accumulated depreciation Description Provision for impairment
As at 1 April (Reversal) Deletion As at 31

Additions Deletions Charge Deletions
2011 March 2012
Tangible assets Freehold land 16,600,000 - - 16,600,000
Leasehold land - - 309,050 - Buildings 10,760,114 - 716,665 10,043,449
Leasehold improvements - - 612,816 - Plant and machinery 91,609,835 (17,103,108) 1,671,673 72,835,054

Buildings 406,080 - 6,844,870 - Computer equipment 860,707 - - 860,707
Furniture, fittings
Plant and machinery 10,959,193 1,903,448 65,395,688 1,419,215 787,113 - - 787,113
and office equipment
Computer equipment - 206,510 530,255 206,510 Motor vehicles 237,338 - - 237,338
Furniture, fittings and
22,222 - 1,111,121 - Total 120,855,107 (17,103,108) 2,388,338 101,363,661
office equipment
Motor vehicles 233,335 - 86,111 - Previous year 122,920,799 - 2,065,692 120,855,107
Total 11,620,830 2,109,958 74,889,911 1,625,725

Rs.
2.11 Investments As at As at
31 March 2012 31 March 2011
Non-current investments
Non trade - at cost
Investment in equity shares - unquoted
1 (previous year:1) fully paid up equity shares of Rs. 10 each of

MBL (AP) Breweries Limited 1 1
12,000 (previous year: 12,000) fully paid up equity shares of

Rs. 10 each of Shushruta Medical Aid and Research Hospitals Limited 12,000 12,000
5,000 (previous year: 5,000) fully paid up equity shares of Rs. 10 each
of Maini Granites Limited 5,000 5,000
300 (previous year: 300) fully paid up equity shares of Rs. 10 each
in AP Heavy Machinery & Engineering Limited 300 300

Rs. 10 each in Anusha International Limited 10,000 10,000

Rs. 100 each in Maa Communication Bozel Limited 1,700 1,700

Rs. 10 each in Sachdev International Limited 7,000 7,000

Rs. 10 each in Scarlet Flowers and Agritech Limited 12,500 12,500
100 (previous year: 100) fully paid up equity shares of

Rs. 10 each in Indana Spices and Food India Limited 100 100

Rs. 3 (previous year: Rs. 10) each in Vulcan Leasing and
Investments Limited 80,000 80,000

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

Rs. 10 each in SDF Industries Limited 50,000 50,000
708,601 708,601
Less: Provision for, other than temporary, diminution in the value of

investments (530,000) (530,000)
178,601 178,601
43

Rs.
2.11 Investments continued As at As at
31 March 2012 31 March 2011
Investment in equity shares - quoted

Re. 1 each in ITC Limited 2,619,750 2,619,750
400 (previous year: 400) fully paid up equity shares of Rs. 10 each in
Ultratech Cement Limited 400,060 400,060
400 (previous year: 80) fully paid up equity shares of Rs 2
(previous year Rs. 10) each in Tata Motors Limited 56,944 56,944
in Gujarat Ambuja Cement Limited 2,115,000 2,115,000
in Larsen & Toubro Limited 2,598,850 2,598,850
1,400 (previous year: 1,400) fully paid up equity shares of Rs. 2 each in
in Satyam Computer Services Limited 633,500 633,500
8,600 (previous year: 8,600) fully paid up equity shares of Rs. 10 each in
Syndicate Bank Limited 700,470 700,470
9,124,574 9,124,574
Investment in government or trust securities
National Savings Certificates 2,159,332 2,061,677
Indira Vikas Patra 26,550 26,550
2,185,882 2,088,227
11,489,057 11,391,402
Aggregate market value of quoted investments 13,791,790 12,649,890
Aggregate provision for diminution in value of investments (530,000) (530,000)
2.12 Long-term loans and advances As at As at

31 March 2012 31 March 2011
Unsecured, considered good

Capital advances 157,105,895 159,166,904
Security deposits 32,458,389 33,705,936
Rental deposits 40,232,216 46,598,197
Deposit made under protest 203,660,993 195,164,631
Loans and advances to related parties (refer to note 2.35) - 4,332,527
Other loans and advances
- Prepaid expenses 8,407,549 11,867,249
- Derivative financial assets 270,662,446 179,760,918
- Others 61,890,143 42,212,392
774,417,631 672,808,754
Unsecured, considered doubtful
Other loans and advances 182,031,074 160,027,863
Less: Provision for doubtful advances (182,031,074) (160,027,863)
774,417,631 672,808,754
44

Rs.
2.13 Inventories As at As at
31 March 2012 31 March 2011
Raw materials 1,508,018,557 1,136,711,036

Goods in transit - raw materials 6,702,202 4,292,906
Work-in-progress 222,427,908 175,549,615
Finished goods 786,209,024 688,242,227
Goods in transit - finished goods 2,944,830 4,010,399
Stores and spares 216,042,194 178,445,503
2,742,344,715 2,187,251,686
Refer note 1.10 of significant accounting policies for disclosure of mode of
valuation of inventories
2.14 Trade receivables As at As at

31 March 2012 31 March 2011
Unsecured
Outstanding for a period exceeding six months
Considered good 100,123,157 97,284,527
Considered doubtful 363,750,746 368,986,442
Others
Considered good 4,552,687,557 3,357,282,087
Considered doubtful 37,285,013 -
5,053,846,473 3,823,553,056
Less: Provision for doubtful debts (401,035,706) (368,986,442)
4,652,810,767 3,454,566,614
2.15 Cash and bank balances As at As at

31 March 2012 31 March 2011
Cash and cash equivalents

Balances with banks:
- in current accounts 151,359,691 344,521,445
- in exchange earners foreign currency ('EEFC') account 3,791,882 21,452,755
Cash on hand 43,798 -
155,195,371 365,974,200
Other bank balances
Balances with banks:
- in margin money deposit accounts maturing within 12 months 23,729,443 14,525,423
23,729,443 14,525,423
178,924,814 380,499,623
45

Rs.
2.16 Short term loans and advances As at As at
31 March 2012 31 March 2011
Unsecured, considered good

Loans and advances to related parties (refer to note 2.35) 1,625,430 157,254
Advance tax and tax deducted at source, net of provision for tax 170,910,550 148,143,821
Fringe benefit tax, net of provision for tax 1,973,463 1,973,463
MAT credit recoverable 3,250,000 -
Others
- Loans and advances to employees 10,366,971 30,165,612
- Trade advances 28,005,906 33,634,414
- Advances for supply of goods and rendering of services 60,133,127 76,269,795
- Derivative financial assets 218,822,387 9,016,925
- Duty drawback receivable 8,695,263 8,150,175
- Prepaid expenses 193,565,519 145,070,171
- Balances with excise and other government authorities 339,928,414 234,195,036
- Interest accrued but not due 1,370,852 2,047,412
1,038,647,882 688,824,078
2.17 Revenue from operations For the year ended For the year ended
31 March 2012 31 March 2011
Sale of manufactured goods, gross 29,570,530,463 24,518,276,272

Sale of traded goods, gross 3,565,763 20,263,108
Income from contract bottling 23,598,443 96,157,876
Sale of spent malt and scrap 239,827,615 210,761,292
Duty draw back on export 8,928,196 11,189,664
Royalty income 24,229,386 21,961,467
29,870,679,866 24,878,609,679
2.18 Other income For the year ended For the year ended
31 March 2012 31 March 2011
Interest income 10,037,446 1,232,376

Dividend income 338,320 356,800
Net gain on foreign currency translation and transactions 21,082,293 64,407,000
Other non-operating income
- Sale of raw materials - 43,421,571
- Profit on sale of fixed assets, net - 331,347
- Net gain on sale of investments 560,000 290,000
- Miscellaneous income 14,054,471 4,176,918
46,072,530 114,216,012
46

Rs.
2.19 Changes in inventories of finished goods, For the year ended For the year ended
work-in-progress and traded goods 31 March 2012 31 March 2011
Opening stock
Work-in-progress 175,549,615 195,653,564
Finished goods 692,252,626 837,464,559
Stock in trade - 652,570
Add: Opening stock of Demerged Undertaking as at 1 April 2011
Work-in-progress 10,606,637 -
Finished goods 5,775,714 -
884,184,592 1,033,770,693
Less: Excise duty on opening stock 336,255,945 371,335,344

Less: Excise duty on opening stock of Demerged
Undertaking as at 1 April 2011 4,272,151 -
(A) 543,656,496 662,435,349
Closing stock
Work-in-progress 222,427,908 175,549,615
Finished goods 789,153,855 692,252,626
1,011,581,763 867,802,241
Less: Excise duty on closing stock 401,519,657 336,255,945

(B) 610,062,106 531,546,296
(Increase)/ decrease in work-in-progress and finished goods (A-B) (66,405,610) 130,889,053
2.20 Employee benefits expense For the year ended For the year ended
31 March 2012 31 March 2011
Salaries and wages 1,288,188,454 1,063,209,762

Contributions to
- provident and other funds 41,812,978 37,244,541
- gratuity 19,373,804 18,383,041
Compensated absences 11,183,457 (9,867,230)
Staff welfare expense 39,657,862 35,032,477
1,400,216,555 1,144,002,591
2.21 Finance cost For the year ended For the year ended
31 March 2012 31 March 2011
Interest expense 1,122,390,967 794,873,067

Other borrowing costs 30,508,820 23,695,592
1,152,899,787 818,568,659
47

Rs.
2.22 Other expenses For the year ended For the year ended
31 March 2012 31 March 2011
Sales scheme expenses 862,471,251 708,440,897

Commission on sales 288,741,263 189,064,600
Freight outward 1,022,245,509 919,465,723
Power and fuel 793,649,206 631,240,693
Advertisement and publicity 955,881,741 816,765,684
Management group service charge 297,667,534 251,702,115
Rates and taxes 173,246,118 119,994,864
Legal and professional 191,207,276 183,252,209
Clearing and forwarding 194,430,896 153,542,012
Travel and conveyance 151,036,214 128,502,451
Consumption of stores and spares 120,943,276 74,117,778
Rent 172,602,843 176,129,469
Repairs
- buildings 9,042,229 4,728,358
- plant and machinery 93,029,205 76,248,769
- others 117,270,503 130,708,421
Telephone and other communication 61,344,904 56,639,395
Training and development 55,804,660 46,610,789
Insurance 44,065,018 38,810,518
Loss on sale/ adjustment of fixed assets, net 22,757,024 -
Printing and stationery 13,034,681 12,030,545
Provision for doubtful debts 21,518,746 62,073,989
Provision for doubtful loans and advances 14,765,425 14,794,046
Bad and doubtful debt written off 748,062 -
Advances written off 4,766,301 159,412
Provision for claims, net 51,585,497 42,184,266
Miscellaneous 218,972,336 248,741,150
5,952,827,718 5,085,948,153
48

2.23 Scheme of arrangement with (iii) all suits, actions and proceedings (iii) the obligations in respect of
SABMiller Breweries Private by or against the Demerged amount of inter-company
Limited Undertaking pending and/ or balances between the
arising on or before the Effective Demerged Undertaking and the
During the year, vide a Scheme of Date continue and be enforced Company shall come to an end;
Arrangement ('the Scheme') under by or against the Company;
Section 391 to 394 of the Companies (iv) all costs, charges and expenses
Act, 1956 between the Company ('the (iv) with effect from the Appointed (other than stamp duty and
Resulting Company') and SABMiller Date and up to the Effective registration charges, if any, of or
Breweries Private Limited ('the Date the Demerged Company in respect of any deed,
Demerged Company'), the brewery carried on the business and document, instrument or orders
business ('the Demerged Undertaking') activities of the Demerged of the Court which shall be
of the Demerged Company vested with Undertaking in trust for the borne by the Resulting
the Company retrospectively from 1 Company; Company alone) in relation to or
April 2009 ('the Appointed Date'). The connection with negotiations
(v) with effect from the Appointed leading up to this Scheme and
Demerged Undertaking comprises of
Date, all profits, incomes, losses of carrying out and
the business of brewing, packaging,
and expenditure of Demerged implementing the terms and
distributing, marketing and sale of beer
Undertaking have been treated provisions of this Scheme shall
and includes all assets (whether
as profits, incomes, losses and be borne and paid by the
movable or immovable, tangible or
expenditure of the Company; Company; and
intangible, real or personal, corporeal or
and
incorporeal, present, future or
(v) the difference between the
contingent) and liabilities, which relate (vi) the Company shall issue and amount representing the surplus
thereto or are necessary therefore, allot 7,241,991 fully paid up of assets and liabilities of the
including items specifically, set out in equity shares of Rs. 10 each at Demerged Undertaking
detail in the Scheme. par on a proportionate basis to recorded in the Company's
the equity shareholders of the books of account and the
a) Salient features of the Scheme
Demerged Company by allotting aggregate value of equity share
Salient features of the Scheme as
5,590,817 and 1,651,174 equity capital issued by the Company
approved by the Honourable High
shares to SABMiller India shall be treated as
Court of Bombay ('the Court') on
Holdings, Mauritius and Amalgamation Reserve and shall
29 March 2012 and filed with the
Austindia Pty Limited, Australia not be utilised for the purpose of
Registrar of Companies ('ROC') on
respectively based on valuation declaring dividend by the
18 April 2012 ('the Effective Date')
as at 31 March 2011. Company in future.
are given below:
b) Accounting treatment in the
(i) the business of the Demerged
books of the Company, as per
Undertaking together with all
the approved Scheme
related assets, liabilities and
employees, including terms (i) all the assets and liabilities of the
specifically listed in the Scheme Demerged Undertaking shall be
would be vested with the recorded at their respective
Company with retrospective book values;
effect from the Appointed Date;
(ii) the nominal value of equity
(ii) all debts, liabilities, duties and shares issued and allotted to the
obligations of the Demerged shareholders of the Demerged
Undertaking as on the Company shall be credited to
Appointed Date shall be the Equity Share Capital
transferred to the Company; account;
49

Based on the accounting treatment prescribed above, 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 As per the book value of the Demerged

Company as at 31 March 2009
Assets acquired
Fixed assets including capital work-in-progress 292,283,844
Inventories 62,210,403
Trade receivables 149,869,295
Cash and bank balances 20,900,000
Loans and advances 255,778,743
Total (A) 781,042,285
Liabilities acquired
Current liabilities 247,989,569
Provisions 33,139,860
Total (B) 281,129,429
Net assets acquired (A - B) 499,912,856

Less: Nominal value of 7,241,991 equity shares of Rs. 10 each to
be issued to the shareholders of the Demerged Company 72,419,910
Net surplus transferred to Amalgamation adjustment reserve 427,492,946
c) Results of the Demerged Undertaking for the period 1 April 2009 to 31 March 2011
Particulars Amount (Rs.)
Income
Revenue (includes inter-company Rs. 16,182,276) 1,247,985,993
Other income (includes inter-company Rs. 28,436,962) 54,950,441
Total (A) 1,302,936,434
Expenditure
Cost of materials (includes inter-company Rs. 36,211,985) 835,758,627
Employee benefits expense 55,518,187
Other expenses (includes inter-company Rs. 150,954,720) 431,531,426
Depreciation 74,889,911
Finance cost 366,801
Total (B) 1,398,064,952
Loss before tax (A - B) (95,128,518)
Tax expense -
Loss after tax (95,128,518)
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 2.2 to the financial statements thus eliminating the effect of inter-company transactions aggregating to Rs. 142,547,467.
50
2.24. Contingent liabilities and other commitments

Rs.
31 March 2012 31 March 2011
(i) Contingent liabilities

Claims against the Company not acknowledged as debts in respect of:
a) Sales tax matters 75,031,390 94,261,168
b) Excise matters 92,146,972 94,448,957
c) Service tax matters 158,536,768 153,442,644
d) Custom matters 261,555 261,555
e) Other matters 23,145,575 59,784,812
(ii) Commitments
a) Estimated amount of contracts remaining to be executed on
capital account (net of advances) and not provided for 296,507,580 220,663,923
b) Other commitments
- Purchase of Hops 29,619,071 8,938,912
2.25. Income from contract bottling operations pertains to the revenue share the Company has earned on sales made by the tie-up
units ('contract bottlers'). These revenues are recorded on a net basis in order to comply with relevant statutory regulations,
where by tie-up units raise invoices on their customers, account for collections in their books of accounts, discharge statutory
dues and taxes and record 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.
2.26. Auditors' remuneration, net of service tax (included under legal and professional expenses)
Rs.
Particulars For the year ended For the year ended
31 March 2012 31 March 2011
As auditor
- Statutory audit 10,100,000 9,200,000
- Tax audit 1,400,000 1,000,000
Reimbursement of expenses 452,223 443,728
51

2.27. 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, 1956:
(a) Details of finished goods (including goods in transit) and turnover (gross)
Rs.
Beer For the year ended For the year ended
31 March 2012 31 March 2011
Opening stock 692,252,626 838,117,129
Add: Opening stock of demerged undertaking 5,775,714 -
Sales (gross of excise duty and discounts) 29,570,530,463 24,518,276,272
Closing stock 789,153,854 692,252,626
(b) Details of traded goods Rs.

Beer For the year ended For the year ended
31 March 2012 31 March 2011
Opening stock - 652,570
Purchases 2,371,323 9,474,466
Sales (gross of excise duty and discounts) 3,565,763 20,263,108
Closing stock - -
(c) Consumption of raw materials and packing materials Rs.

31 March 2012 31 March 2011
Malt 1,502,684,640 1,290,141,575
Bottles 3,750,538,524 3,209,076,886
Others * 3,350,890,511 2,937,704,268
8,604,113,675 7,436,922,729
* 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.
(d) Consumption of imported and indigenous raw materials and packing materials
31 March 2012 31 March 2011
Amount (Rs.) % Amount (Rs.) %
Imported 136,382,345 2 140,574,830 2
Indigenous 8,467,731,330 98 7,296,347,899 98
8,604,113,675 100 7,436,922,729 100
(e) Consumption of imported and indigenous stores and spares

31 March 2012 31 March 2011
Amount (Rs.) % Amount (Rs.) %
Imported 14,480,468 12 10,281,516 14
Indigenous 106,462,808 88 63,836,262 86
120,943,276 100 74,117,778 100
52

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

31 March 2012 31 March 2011
Loss for the year attributable to equity shareholders (1,194,131,325) (601,372,377)

Weighted average number of equity shares of Rs. 10 each
used for calculation of basic and diluted earnings per share * 238,425,736 231,183,745
Basic and diluted earnings per share (5.01) (2.60)
* Since the economic benefits under the Scheme have accrued from the appointed date, 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.
2.29. Value of imports on CIF basis Rs.

31 March 2012 31 March 2011
Raw materials 69,907,234 78,446,536

Stores and spares 28,208,921 25,642,280
Capital goods 115,715,962 204,940,031
213,832,117 309,028,847
2.30. Expenditure in foreign currency (accrual basis) Rs.

31 March 2012 31 March 2011
Travel and conveyance 13,663,640 13,068,301

Management group service charge* 297,667,534 251,702,115
Salaries, wages and bonus 53,078,184 61,933,979
Interest expense ** 227,439,048 115,360,052
Professional and consultation fees 30,266,456 20,319,541
Others 23,248,687 67,117,565
645,363,549 529,501,553
* Includes withholding taxes of Rs. 29,766,755 (previous year: Rs 25,170,212)
** Includes withholding taxes of Rs. 16,711,146 (previous year: Rs. 7,803,184)
2.31. Earnings in foreign currency (accrual basis) Rs.

31 March 2012 31 March 2011
Export sales at FOB value 320,337,094 223,483,118
2.32. Gratuity
The Company has a gratuity plan for the employees of the Company. Every employee who has completed 5 years or more of
service is eligible for gratuity on separation, worked out at 15 days salary (last drawn salary) for each completed year of
service. The obligation under the scheme is partially funded by contributions being made towards qualifying insurance
policies obtained from the insurer.
53

Profit and loss account
Net employee benefits expense (recognised in employee benefits expense) Rs.
31 March 2012 31 March 2011
Current service cost 11,357,527 8,047,190

Interest cost on defined benefit obligation 8,286,322 6,389,264
Expected return on plan assets (2,183,837) (2,399,102)
Net actuarial loss/ (gain) recognised for the year 1,913,792 (6,654,500)
Past service cost - 13,000,189
Net benefits expense 19,373,804 18,383,041
Actual return on plan assets 2,034,888 2,963,123
Balance sheet
Details of provision for gratuity Rs.
31 March 2012 31 March 2011
Defined benefit obligations 114,415,667 96,375,972
Fair value of plan assets 32,598,237 29,994,116
Plan liabilities 81,817,430 66,381,856
Changes in the present value of the defined benefit obligation Rs.

31 March 2012 31 March 2011
Opening defined benefit obligation 96,375,972 77,776,137

Add: Opening defined benefit obligation of the Demerged Undertaking 2,492,033 -
Current service cost 11,357,527 8,047,190
Interest cost 8,286,322 6,389,264
Benefits paid (5,861,030) (2,746,329)
Past service cost - 13,000,189
Actuarial loss / (gain) on obligation 1,764,843 (6,090,479)
Closing defined benefit obligation 114,415,667 96,375,972
54
Changes in the fair value of plan assets Rs.

31 March 2012 31 March 2011
Opening fair value of plan assets 29,994,116 28,919,458
Expected return on plan assets 2,183,837 2,399,102
Actuarial (loss)/ gain on plan assets (148,949) 564,021
Contributions by employer 6,430,263 857,864
Benefits paid (5,861,030) (2,746,329)
Closing fair value of plan assets 32,598,237 29,994,116
Major categories of plan assets as a percentage of the fair value of total plan assets Rs.
31 March 2012 31 March 2011
Qualifying insurance policies from the insurer 100% 100%
Principal assumptions used in determining gratuity benefit obligations for the Company's plan
Rs.
31 March 2012 31 March 2011
Discount rate 8.35% 8.15%
Expected rate of return on plan assets 7.50% 7.50%

Salary increase 11% for Executives 10% for Executives
7% for Others 7% for Others
Employee turnover 19% for Executives 21% for Executives

2% for Workers 2% for Workers
Retirement age 58 Years 58 Years
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other
relevant factors such as supply and demand factors in the employment market.
The overall expected rate of return on plan assets is determined based on the market prices prevailing on that date, applicable to
the period over which the obligation is to be settled.
55
Amounts for the current and previous four years Rs.

Particulars As At As At As At As At As At
31 March 2012 31 March 2011 31 March 2010 31 March 2009 31 March 2008
Defined benefit 114,415,667 96,375,972 77,776,137 75,152,540 62,980,939

obligation
Plan assets 32,598,237 29,994,116 28,919,458 22,454,555 18,491,154
Deficit (81,817,430) (66,381,856) (48,856,679) (52,697,985) (44,489,785)

Experienced adjustments (593,065) (3,036,056) 4,845,181 (2,341,056) (293,399)
on plan liabilities
Experienced adjustments (148,949) 564,021 4,370,791 641,263 (250,707)
on plan assets
2.33. Segmental reporting income and expenditure in individual Segment assets include all operating
segments. Income and direct assets used by the segment and
Business segments expenses in relation to segments are consist principally of fixed assets,
categorised based on items that are inventories, trade receivables and loans
The Company's sole business segment
individually identifiable to that segment, and advances. Segment liabilities
is 'Manufacture and Sale of Beer'.
while the remainder of costs are include trade payables and other
Consequently, the requirement for
apportioned on an appropriate basis. operating liabilities and provisions.
separate business segment disclosures
Certain expenses are not specifically Certain assets and liabilities that are not
as required under AS 17 - 'Segment
allocable to the individual segments as specifically allocable to the individual
Reporting' is not applicable.
these expenses are common in nature. segments have been separately
Geographical segments The Company therefore believes that it disclosed as unallocated.
is not practicable to provide segment
The Company operates in two principal disclosure relating to such expenses
geographical areas of the world: India and accordingly such expenses are
and Rest of the world. separately disclosed as unallocated and
directly charged against total income.
The accounting principles used in the
preparation of the financial statements Certain segment assets and liabilities
are also consistently applied to record are directly attributable to the segment.
Rs.
Revenue (net of duties, taxes and discount) For the year ended For the year ended
31 March 2012 31 March 2011
India 16,045,930,999 14,295,739,784

Rest of the world 320,337,094 223,483,118
16,366,268,093 14,519,222,902
56
Rs.
Segment asset As at As at
31 March 2012 31 March 2011
India 20,688,178,863 18,605,653,377

Rest of the world - 3,518,298
20,688,178,863 18,609,171,675
Rs.
Capital expenditure (on cash basis) As at As at
31 March 2012 31 March 2011
India 674,698,949 794,849,667

Rest of the world - -
674,698,949 794,849,667
2.34. 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.
Rs.
31 March 2012 31 March 2011
Provision for indirect-tax cases

Opening balance 285,165,018 256,915,091
Add: Addition during the year 34,638,592 39,622,823
Less: Unused amounts reversed during the year (10,813,392) (11,372,896)
Closing balance 308,990,218 285,165,018
Provision for water charges
Opening balance 86,007,222 72,072,883
Add: Opening balance of the Demerged Undertaking 39,643,367 -
Add: Addition during the year 27,760,297 13,934,339
Less: Utilised during the year (99,158,624) -
Closing balance 54,252,262 86,007,222
363,242,480 371,172,240
57
Provision for indirect-tax cases
Details of provisions made during the year:
A. 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 authorities
had raised a demand including interest and penalty. The Company has filed an appeal and the matter is pending before the
Tribunal. However from January 2011 onwards, the Company has started paying VAT under protest with a corresponding
provision for the same on a monthly basis. During the year the Company has provided for Rs. 7,370,846 (previous year:
Rs.6,667,550).
B. Entry Tax:
(i) The Government of Haryana has abolished the local area development tax ('LADT') and has introduced entry tax on inter-state
purchases. However, the Government of Haryana is yet to frame rules for payment of entry tax due to which entry tax is not
being paid. As the rules may have retrospective effect, the Company assesses the probability of an adverse outcome of the
case and has accordingly made a provision. During the current year the Company has made an additional provision for
Rs. 24,041,395 (previous year: Rs. 26,008,144) towards entry tax on barley procured from other states.
(ii) Entry tax is a disputed matter in the state of Uttar Pradesh. 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. From December 2011 onwards, the Company has been paying entry tax under
protest and is making a corresponding provision for the same. The Company has made additional provision of Rs. 1,588,651
during the year.
C. 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 EVC are required to be submitted to the department within 90 days from the date of sale.
Based on an assessment of possibility of collection of the EVC, the Company has provided Rs. 1,637,700 against the said
liability.
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. 10,813,392 during the current year.
Provision for water charges

The Maharashtra Industrial Development Corporation ('MIDC') had, vide order number EE/E&M/785/2005 dated 25 May 2005,
made a demand for increase in water charges with retrospective effect from 1 November 2011. 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. 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. Accordingly the Company has made the payment of the principal amount
outstanding. However with respect to interest, the Association has given a representation on behalf of the Company for waiver of
interest demanded by MIDC.
58
2.35. Related parties
(i) Names of related parties and description of relationship with the Company:
Enterprises where control exists

Ultimate holding company SABMiller plc
Holding company SABMiller Breweries Private Limited
Significant influence SABMiller Asia & Africa BV
Other related parties with whom transactions have taken place during the year
Fellow subsidiaries S.p.A. Birra Peroni
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 Paolo Lanzarotti, Managing Director
(ii) Related party transactions Rs.

For the year ended For the year ended
31 March 2012 31 March 2011
SABMiller Breweries Private Limited (Also refer to note 2.23 to the

financial statements)
Income from contract bottling - 83,337,284
Purchase of stock in trade - 6,991,654
Purchase of raw materials - 12,390,267
Sale of raw materials - 43,421,571
Reimbursement of expenses incurred on behalf of the Company - 902,250
Reimbursement of expenses incurred on behalf of other companies - 17,110,679
Loan repaid, net - 164,696,538
Unsecured loan cancelled pursuant to Scheme of Arrangement 2,338,439 -
59

(ii) Related party transactions continued
Rs.
31 March 2012 31 March 2011
SABMiller Asia & Africa (Pty) Limited

Reimbursement of expenses incurred on behalf of the Company 600,846 6,237,854
Reimbursement of expenses incurred on behalf of other companies 999,735 3,618,701
Purchase of raw materials - 426,323
Purchase of stores and spares 525,890 -
SABMiller plc
Reimbursement of expenses incurred on behalf of the Company - 26,318
Reimbursement of expenses incurred on behalf of other companies 1,896,333 -
Management group service charge 297,667,534 251,702,115
Reimbursement of expenses incurred on behalf of the Company 289,037 -
S.p.A. Birra Peroni
Purchase of stock in trade 2,371,323 2,482,812
Interest expense 4,733,040 2,875,871
Unsecured loan taken, net 4,259,736 1,890,284
Salaries, wages and bonus 53,078,184 61,933,979
SABMiller Vietnam
Reimbursement of expenses incurred on behalf of other companies - 649,236
Purchase of raw materials 3,848,262 -
SABMiller (Asia) Limited
Reimbursement of expenses incurred on behalf of other companies 1,253,488 164,866
Reimbursement of expenses incurred on behalf of other companies 306,430 -
Reimbursement of expenses incurred on behalf of the Company 710,450 -
Commission paid on purchase of raw materials 11,375,252 -
Paolo Lanzarotti
Remuneration 38,031,468 27,288,632
Advance given - 2,861,236
60

(iii) Amount outstanding as at the balance sheet date:
Rs.
As at As at
31 March 2012 31 March 2011
SABMiller Breweries Private Limited

Short-term borrowings - 2,338,439
SABMiller plc
Short term loans and advances 1,180,394 18,648
SABMiller Asia & Africa (Pty) Limited
Other current liabilities - 8,770,916
Long-term Borrowings 54,081,207 49,821,472
Other current liabilities 63,515,574 220,398,289
SABMiller Europe AG
Short term loans and advances 18,095 18,095
SABMiller Vietnam
Short term loans and advances 120,511 120,511
Short term loans and advances 306,430 -
Other current liabilities 710,450 -
Other current liabilities 2,237,282 -
Other current liabilities 127,441,671 61,933,979
Paolo Lanzarotti
Long-term loans and advances - 4,332,527
(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. 2,891,998,590 (previous year: Rs. 4,065,250,300).
(v) SABMiller plc operates a variety of equity-settled share-based compensation plans for few select employees of the Company,
costs of which are not re-charged to the Company.
61

2.36. Deferred tax assets/ (liabilities)
Rs.
31 March 2012 31 March 2011
Deferred tax assets

Investments 171,959 176,053
Trade receivables 122,767,082 115,044,144
Loans and advances 52,635,872 46,580,190
Provision for retirement benefits 41,895,052 35,237,070
Provision for claims 81,429,312 87,639,083
Unabsorbed depreciation 1,174,499,144 1,130,608,418
1,473,398,421 1,415,284,958
Deferred tax liabilities
Fixed assets 1,473,398,421 1,415,284,958
1,473,398,421 1,415,284,958
Deferred tax asset/ (liabilities), net - -
In view of the accumulated losses and in accordance with AS 22 - "Accounting for taxes on income", deferred tax assets on
unabsorbed depreciation and other temporary timing differences have been recognised only to the extent of those timing
differences, the reversal of which will result in sufficient taxable income.
2.37. Derivative instruments and un-hedged foreign currency exposure

Derivative instruments
Particulars Purpose As at As at
31 March 2012 31 March 2011
Forward contract Towards repayment of trade payables GBP 546,455 Euro 997,288
USD 5,636,046 USD 429,950
Forward contract Towards repayment of interest on foreign currency loans JPY 247,518,612 JPY 231,069,320
USD 2,342,007
Currency Towards repayment of foreign currency loans JPY 3,218,455,000 JPY 3,218,455,000
swap contract USD 17,500,000
62

Un-hedged foreign currency exposures
Rs.
Underlying As at 31 March 2012 As at 31 March 2011
asset/liability Foreign currency Amount (Rs.) Foreign currency Amount (Rs.)
amount amount
Balances with banks USD 73,851 3,791,882 USD 480,192 21,450,176

JPY 4,685 2,579
Trade receivables - - USD 78,762 3,518,298
Trade payables USD 91,059 (4,675,411) USD 17,054 (761,798)
EURO 238,373 (16,260,453) ZAR 7,948 (53,808)
CHF 49,090 (2,817,933) GBP 7,332 (527,415)
EURO 25,310 (1,600,589)
Payable to related parties ZAR 14,440 (710,450) ZAR 1,294,738 (8,770,916)
USD 2,525,647 (129,678,953) USD 6,320,400 (282,332,268)
(150,351,318) (269,075,741)
2.38. 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. Total rental expense under non-cancellable operating leases amounted to
Rs.77,118,180 (previous year: Rs. 79,218,180) for the year ended 31 March 2012. Future minimum lease payments under non-
cancellable operating leases are as follows:
Rs.
Period As at As at
31 March 2012 31 March 2011
Not later than 1 year 70,120,413 77,118,180

Later than 1 year and not later than 5 years 55,251,750 125,372,163
Later than 5 years - -
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. Total rental expense under cancellable operating leases amounted to Rs. 95,484,663
(previous year: Rs. 96,911,289) for the year ended 31 March 2012.
2.39. Based on the confirmations received from the suppliers who provide goods and services to the Company regarding their
status under the Micro, Small and Medium Enterprises Development Act, 2006, the Company has prepared the following disclosure
as required under the said Act. The Company however has not received any claim for interest from any supplier under the said Act.
63
Rs.
31 March 2012 31 March 2011
(i) The principal amount remaining unpaid to any supplier as at the end of
each accounting year; 28,722,418 12,960,563
(ii) The amount of interest paid by the Company along with the amounts of the
payment made to the supplier beyond the appointed day during the year; - -
(iii) The amount of interest due and payable for the period 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; 181,532 147,148
(iv) The amount of interest accrued and remaining unpaid at the end of
the year; and 2,465,047 1,941,326
(v) The amount of further interest remaining due and payable even in the
succeeding years, until such date when the interest dues as above are
actually paid to the small enterprise. 2,283,515 1,794,178
2.40. Amalgamation adjustment reserve account

With effect from 21 May 2003, the erstwhile direct and step down subsidiaries ('Transferor Companies') of the Company were
amalgamated into the Company. The Company had accounted for amalgamation adjustment reserve as per the Scheme approved
by the Honourable High Courts. Opening balance of Amalgamation adjustment reserve account represents excess of the carrying
value of investments, over the share capital of the Transferor Companies.
2.41. The Company has established a comprehensive system of maintenance of information and documents as required by the
transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Management is of the opinion that its international
transactions are at arm's length so that the aforesaid legislation will not have any impact on the financial statements, particularly on
the amount of tax expense and that of provision for taxation.
2.42. Reversal of impairment loss

During the year ended 31 March 2008, based on physical verification, 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.
However during the year, the Company put to use certain items of fixed assets, which were impaired in earlier years. Accordingly,
the management has reassessed the recoverable value of these assets and reversed an impairment loss amounting to
Rs.17,103,108 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.
2.43. Employee stock compensation cost

Guidance Note on "Accounting for Employee Share Based Payments" issued by the ICAI ('the Guidance Note') establishes financial
and reporting principles for employees share based payments plans. The Guidance Note applies to employee share based
payment plans, the grant date in respect of which falls on or after 1 April 2005. SABMiller plc ('the Group') operates a variety of
equity-settled share-based compensation plans for the employees of the Company.
(i) During the year ended 31 March 2012, the Group had the following share-based payment arrangements for the employees of
the Company.
64
Executive Share Option Scheme [Approved and (No 2) Scheme]
31 March 2012 31 March 2011
Date of grant 1 June 2011 1 June 2010

Number of shares granted 173,150 155,000
Method of settlement Equity Equity
Contractual life 10 years 10 years
Vesting period 3 years 3 years
Vesting conditions Achievement of a Achievement of a
target growth in target growth in
earnings per share earnings per share
International Performance Share Award Sub-Scheme
31 March 2012 31 March 2011

Number of shares granted - -
SABMiller plc Share Award Plan 2008
31 March 2012 31 March 2011

Number of shares granted 9,000 9,000
65

(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 31 March 2011

Number Weighted Number Weighted
of options average of options average
exercise exercise
price (Rs.) price (Rs.)
Outstanding at the beginning of the year 374,750 1,107 364,700 961

Granted during the year 173,150 1,672 155,000 1,313
Transferred in/ (out) during the year* 10,468 1,117 (49,300) (924)
Lapsed during the year 55,500 1,286 14,000 1,024
Exercised during the year 96,650 1,017 81,650 972
Outstanding at the end of the year 406,218 1,314 374,750 1,107
Exercisable at the end of the year 24,168 1,031 16,850 921
* The options transferred represents options relating to employees transferred from companies within the SABMiller Group
during earlier years.
The weighted average share price at the date of exercise for stock options exercised during the year was Rs. 1,893 (previous year:
Rs. 1,471). The options outstanding as at 31 March 2012 had a weighted average remaining contractual life of 8.1 years (previous
year: 8.2 years).
The details of the activity of shares issued after 1 April 2005 under International Performance Share Award Sub-Scheme are as
follows:
Particulars 31 March 2012 31 March 2011

Number Weighted Number Weighted
of options average of options average
exercise exercise
price (Rs.) price (Rs.)
Outstanding at the beginning of the year 8,000 - 14,000 -

Granted during the year - - - -
Transferred in during the year - - - -
Lapsed during the year 1,000 - - -
Exercised during the year 7,000 - 6,000 -
Outstanding at the end of the year - - 8,000 -
Exercisable at the end of the year - - - -
The weighted average share price at the date of exercise for stock options exercised during the year was Rs. Nil (previous year: Rs.
Nil). The options outstanding as at 31 March 2012 had a weighted average remaining contractual life of Nil years (previous year: 7.1
years).
The weighted average fair value of stock options granted during the year is Rs. 531 (previous year: Rs. 439). 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

31 March 2012 31 March 2011
Share price at the grant date Rs. 1,667 Rs. 1,311
Exercise price at the grant date Rs. 1,672/ Rs. Nil Rs. 1,313/ Rs. Nil
Expected volatility 26.70% 28.10%
Contractual life (vesting and exercise period) in years 10 years 10 years
Expected dividends 2.35% 2.48%
Average risk-free interest rate 2.27% 3.58%
The expected volatility was determined based on historical daily share price volatility of SABMiller plc share price.
(iii) Since the Company uses the intrinsic value method, the impact on the reported net loss and earnings per share is computed by
applying the fair value based method. The Guidance Note requires the proforma disclosures of the impact of the fair value
method of accounting of employee stock compensation in the financial statements. Applying the fair value based method defined
in the said Guidance Note, the impact on the reported net loss and earnings per share would be as follows:
Rs.
31 March 2012 31 March 2011
Net loss as reported (1,194,131,325) (601,372,377)
Add: Employee stock compensation under intrinsic value method - -
Less: Employee stock compensation under fair value method (48,384,193) (44,563,640)
Proforma net income (1,242,515,518) (645,936,017)
Earnings per share as reported
- Basic (5.01) (2.60)
- Diluted (5.01) (2.60)
Proforma earnings per share
- Basic (5.21) (2.79)
- Diluted (5.21) (2.79)
2.44. Till the year ended 31 March 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for
preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI
notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year
figures to conform to this year's classification. The adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and
disclosures made in the financial statements, particularly presentation of balance sheet.

Paul D'Silva Sridhar S
Bangalore Bangalore
67
Cash flow statement Rs.

31 March 2012 31 March 2011
Cash flows from operating activities
Loss before tax (1,192,585,323) (603,639,271)
Adjustments:
Depreciation 872,589,246 950,690,263
Dividend income (338,320) (356,800)
Interest and financing charges 1,141,585,138 801,858,363
Interest income (10,037,446) (1,232,376)
Loss/ (Profit) on sale/ adjustment of fixed assets 22,757,024 (331,347)
Net gain on sale of investments (560,000) (290,000)
Reversal of impairment loss (17,103,108) -
Unrealised foreign exchange difference (43,666,243) (36,851,191)
Operating cash flows before working capital changes 772,640,968 1,109,847,641
Increase in trade receivables (1,115,370,797) (183,933,832)
Increase in loans and advances (105,577,348) (286,321,991)
Increase in inventories (490,539,908) (199,830,105)
Increase in current liabilities and provisions 550,037,691 492,105,231
Cash (used in)/ generated from operations (388,809,394) 931,866,944
Taxes paid, net of refund (20,193,232) (17,073,525)
Net cash (used in)/ provided by operating activities a (409,002,626) 914,793,419
Cash flows from investing activities
Purchase of fixed assets (674,698,949) (794,849,667)
Proceeds from sale of fixed assets 3,573,219 1,496,715
Dividend income 338,320 356,800
Interest received 10,937,922 1,432,579
Sale of investments 462,345 2,258,323
Net cash used in investing activities b (659,387,143) (789,305,250)
Cash flows from financing activities

Proceeds from borrowings 30,203,939,735 19,867,755,607
Repayment of borrowings (28,483,558,645) (19,244,769,676)
Interest and financing charges paid (1,114,066,670) (778,378,368)
Net cash provided by/ (used in) financing activities c 606,314,420 (155,392,437)
Effect of exchange rate changes on cash and cash equivalents d (214,162) 103,049
Net decrease in cash and cash equivalents a+b+c+d (462,289,511) (29,801,219)
Cash and cash equivalents at the beginning of the year 380,499,623 410,300,842
Cash and cash equivalents transferred on scheme of arrangement 260,714,702 -
Cash and cash equivalents at the end of the year * 178,924,814 380,499,623
Net decrease in cash and cash equivalents (462,289,511) (29,801,219)
* Includes Rs. 23,729,443 (previous year: Rs.14,525,423) in margin money deposit account.


Bangalore Bangalore
68
Unit No. 1021, 2nd Floor
Solitaire Corporate Park 10, Chakala, Andheri Kurla Road
Survey No. 131 - A, Andheri (East), Mumbai - 400093
www.sabmiller.in

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SKOL Breweries Limited

SKOL Breweries Limited

SABMiller is the second

This programme is extended to The company also benefited as it

REGISTERED OFFICE STATUTORY AUDITORS

REGISTRAR AND SHARE TRANSFER AGENT

Mr. Ari Mervis Mr. Harald Harvey Ms. Sue Clark

Mr. T S R Subramanian Mr. Paolo Lanzarotti Mr. Mathew Dunn

Company & Group

Company and Group Profile

Company and Group Profile

Vision and Mission

Our Vision Our Mission

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

Now you can enjoy

Royal Challenge Strong

Long brew with

The brand saw an anthem befitting the

Knock Out - the ever refreshing strong

The thermo chromatic label, first of its kind in

The Art of Chilling has more options now. Foster's

yeah ! its strong and mild

Managing Director's Statement

Managing Director's Statement continued

Managing Director's Statement continued

4. To appoint Auditors for the period To consider and if thought fit, to

Notice to Members continued

Item No. 5 Resolution is commended for the

4. The Ministry of Corporate Affairs Resolution is commended for the

Financial Results brands and variants have shown

Gross Revenue 2,987.07

Operations Breweries Private Limited. There is a

Directors' Report continued

Material changes subsequent

Dividend Sustainable Development and Corporate

Campaign on Responsible Drinking

"Respect the Road" campaign was launched in Gurgaon

Phase two of the mass communication campaign on

Directors' Report continued

The ground water management

AIDS Awareness Programme under

Directors' Report continued

Directors' Report continued

Auditors' Report continued

Auditors' Report continued

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

Duty on sediment beer 1,284,936 2002 -03 Orissa High Court

Overtime wages of 327,231 2005-06 Orissa High Court

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

Karnataka Excise Act, Overtime wages of 3,005,062 1998-99 to 2004-05 Commissioner of

Auditors' Report continued

Delhi Sales Tax Act, Sales Tax 576,486 2002-03 Assistant

Sales Tax 217,200,913 2007-08 Additional

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

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

Sales Tax 1,433,060 2008-09 Additional

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

Sales Tax 8,050,922 2002-03 Joint Commissioner