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Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
Skol breweries ltdannualreports
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Skol breweries ltdannualreports

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

I extend my warm greetings to all of you and have the pleasure of presenting the Annual Report for the year 2007-08.
http://www.sabmiller.in/

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  • 1. SKOL Breweries Limited Tel +91(0)22 - 67103890-931, Mahal Industrial Estate, Fax +91(0)22 - 67103894Mahakali Caves Road,Andheri East, Mumbai - 400 093Maharashtra, India www.sabmiller.in SKOL Breweries Limited Annual Report 2008 Printed by Print House design: www.ysdesignstudio.com
  • 2. Managing Director Speaks prospects of the Industry and the Group. This time the conference was held in Our core brands are... India keeping in mind the growth Hayward’s 5000 potential of the Indian beer market and Launched in 1983, Hayward’s 5000 is the way the Indian economy has been synonymous with strong beer and is one performing. The holding of the of the largest selling beers in India. Conference in India shows the The hallmark of an original and authentic commitment and confidence that the strong beer, it perfectly combines strength SABMiller Group has in India, in the and quality to meet the high expectations management team here and in India’s of today’s demanding consumers. growth story. Hayward’s 5000 has recorded a growth I am happy to report that the year of 13%. The growth could have been 2007-2008 has been a good year for much higher but for our inability to the Company. The Company has made participate fully in Tamil Nadu. a profit of Rs 34.4 Crores. The net During the year under review the Brand turnover of the Company has increased has signed up Bollywood superstars from Rs. 897.59 crores to Rs. 1086.67 Mr. Sanjay Dutt and Mr. Sunil Shetty as crores resulting in a growth of 25%. brand ambassadors. The macho image We are happy to say that the net of the stars goes well with the strong turnover has crossed Rs.1000 crores. image of the Brand. This association will take the Brand to new heights. Royal Challenge Sales in Rs. Crores 1200 Launched in the year 1983, Royal Challenge Premium Lager is theDear Shareholders, 1086 second largest selling mild beer in India. The brand positioning is that this is theI extend my warm greetings to all of you 1000 beer for the discerning consumer who hasand have the pleasure of presenting the the confidence to make a choice based 897Annual Report for the year 2007-08. on superior taste and knowledge andThe Indian economy is generally on a 800 stand apart rather than be part of aroll and the GDP growth rate has been crowd.at 8.7% for the year ended March 2008. 611 It offers a difference with an edge.This is commendable as the last three 600 Besides its international class packaging,years growth rate has been around 9%. 501 premium image and path breakingThe only concern now is the slow rate advertising, what sets the brand apartof agricultural growth, a marginal slow 400 is a distinctly smooth and easydown in manufacturing sector flowing taste.and the biggest challenge being controlof inflation primarily led by galloping 200 Royal Challenge has grown by 12.8%.oil prices. In Andhra Pradesh, the largest beer market in the Country, the brand is theThe consumer confidence and raising market leader with a mild beer segment 0income levels help in accelerating 2005 2006 2007 2008 share of 52.8% and has grown by 20.9%.the momentum in the beer industry. YearsIncreasing urbanization and development Knockoutof a large middle class is bringing in new Launched in 1984, Knock Out has clearly The industry has grown at 14.3% and carved for itself a distinctive segment –consumers, with new attitudes and our growth is 15.8%, which is well abovebehaviors towards beer. “The Strongest Beer” and is the 3rd largest the Industry’s average. This growth has, selling strong beer brand in the country.With the Indian economy doing so well however, been limited by production It has continued to perform well and haseveryone is looking at India, SABMiller capacity which is being addressed. grown at 20.5% over the pervious year.is no exception. Every three years the Your Company is taking steps to The brand has strong presence inSABMiller group has a global leadership increase its manufacturing capacity not most southern and central states in India.conference in which the top 300 only to meet the present demand but The brand has Kannada action heroexecutives meet to discuss the future also the future demand. Mr. Darshan as its ambassador. SKOL Breweries Limited 1
  • 3. Foster’s more responsive and in tune with market putting up will have the latest technologyCompleted one year after coming into the conditions. for conserving water and we willSABMiller stable. The Brand had not been On the manufacturing front there has benchmark our water usage to globalperforming up to its potential before it was been an all round improvement in the standards. Even in our Saanjhi Unnatitaken over by us on account of production Company. Water usage per HL is down programme we are looking at ways toand distribution constraints. We are happy 14%, Power Consumption is down 6%. grow barley using less water.to state that the decline which the brand This is in addition to the saving of 14% In terms of our Corporate Socialwas facing has not only been stemmed in water and 13% in power last year. Responsibility, an agreement has beenbut the brand has grown over 45%. These actions continue to enhance our signed with the ILO for promotingThe Brand is now available all over India. competitiveness in the market. HIV/AIDS awareness. The Company’sFosters is a clear leader in the premium Saanjhi Unnati Programme forsegment both in volume and image terms. De-regulation of the market remains the biggest challenge for the Industry. There development of Barley cultivation inIt leads the development of what we call India has been progressing very well andthe worthmore segment in India. has been some progress but a lot needs to be done. Tamil Nadu opening its a large number of farmers particularly inFor the year ended March 08 we had market for imports from other states is Rajasthan have been benefited.an all India market share of 34.8%. good news, considering that it is the We believe that the Saanjhi UnnatiThe Company is in the forefront of new Second biggest beer market in India. programme will in the long run help us toproduct development and firmly believes But the import duty fees being charged be self sufficient in Barley and at thethat in order to grow the market it has to by Tamil Nadu are on the higher side. same time will have a positive impact oncontinuously innovate. As a part of this Your Company along with AIBA is in the the lives of the farmers, thereby being ainnovation the Company proposes to forefront of lobbying with the various win-win situation for both.launch Indus Pride in the Mild segment state governments for the rationalizationwhich will be Indias first 100% malt- As India is one of the fastest growing in policies across states in this Industry. markets, your Company will continue tobased Beer alongwith a 100% malt-basedbeverage. The beer has been specially Your Company believes in sustainable receive strong regional and globaldeveloped in accordance with research growth. Water is very important to backing from SABMiller, and access tofindings to suit the Indian tastes. sustaining of life and a critical raw its intellectual, technology, brands and material for our industry. Your Company human capital.Your Company has introduced its global believes in saving water and has adoptedbrand Peroni in Mumbai last year and the I wish to thank each one of you for your the 5R philosophy at its manufacturing support. We look forward to an excitingsame has also been launched in New locations. Namely, Replenish, Reduce,Delhi and Bangalore. Peroni Nastro year ahead of us. Recycle, Re-use and Redistribute. YourAzzurro is an intensely crisp, dry and Company has tied up with CII and otherrefreshing lager, with a clean character & stakeholders to identify opportunities toclarity. It is expertly brewed in Italy to the Cheers manage watersheds and harvesting oforiginal recipe since 1963 and has an rain water to augment the reserves that Jean - Marc Delpon de Vauxunmistakable touch of Italian style. we have. All the new plants we areThis premium beer uses the finest varietyof spring-planted barley and the highestquality maize, malts and hops. It has beenvery well received in the market.In Mumbai it already has 35% marketshare of the imported beer market.The Company is evaluating the market tosee which other international brands it canlaunch in India.During the last couple of years five majorinternational brewers have entered into theIndian Beer market. With Heineken likelyto partner UB the market dynamics isgoing to undergo a sea change. Withincreased competition the market is onlyexpected to grow.Your Company in order to take thebusiness to the next level of growth hasrestructured itself as an organization inorder to drive profitable growth.The new structure will make the Company
  • 4. SKOL Breweries LimitedSKOL currently manages nine breweries continuous improvement at all breweries. Central Distilleries & Breweriesacross India. These breweries share a The MEP “tree” symbol is displayed at (CDB),Uttar Pradeshcommon basic function; to brew beer to all breweries and reminds everyone what Brewery capacity was enhanced by thebe sold to our customers. Beer is a we are trying to achieve. commissioning of a new warehouse andbeverage produced by the fermentationof cereal sugars by yeast. The brewingprocess is very similar at all of our THE BREWERY PROCESSbreweries to ensure that are brands are Barley Maltproduced consistently across the country.Throughout the year our breweriesfocused on making sure our processeswere consistent across the country.In addition, much effort has been made MILLING MASHING LAUTERING BOILINGto increase our capability by enhancing WHIRLPOOLINGthe competence levels of our workers,installing new plant and equipment andensuring that all our breweries runsmoothly and according to their design.All this has been done to ensure that our FILTERING MATURING FERMENTING COOLINGcustomers have ready access to ourbrands, at the right price and in perfectcondition.During the year our breweries faced somecommon issues which were dealt with PACKAGING DISTRIBUTIONeffectively. These include variable qualityof raw materials (especially malt and glassbottles), easing environmental stress by Here are some highlights from upgradation of brewing and packagingreducing power and water usage rates our breweries: plants. In January 2008 Fosters Lager wasand improving the quality of our brewing brewed here for the first time. Rochees Breweries (RB), Rajasthanand packaging processes to provide our Management also focused on workplace The brewery motto, “Solid 10 in 10”,customers with the best beer possible. safety and crisis management. A training reflects the team’s commitment toIn addition to brewing beer and achieving the best tasting beer. Developing plan was implemented to improveconsistently meeting market demand, staff capability was a priority in 2007/8. workplace competence even further.management and staff at all our breweries RBL is the “Campus Brewery” focusing on A major clean up operation and a medicaldemonstrated commitment to serving hygiene and cleanliness. camp were held to help improve quality oftheir local communities, protecting the life in the local community. Significant investment has been madeenvironment and assuring the safety and enabling the successful commissioning Pals (PB), Maharashtragood health of everybody working in or of a new can packaging line, effluent and The major effort was to improve quality asvisiting our facilities. water treatment plants, filtration plant the “Campus Brewery” focusing on bestDuring the year SKOL introduced the and yeast drier. Thus the overall capacity practice in bright beer production.concept of “Campus Breweries”. of the brewery was significantly enhanced.This concept is an effective method of A competition was held for brewery staff In the community the team facilitated to design the brewery motto. The winnerdeveloping and communicating learnings plantation of 900 trees, organized blood was “SONERI SOMRAS SONERI SANDHI”.from one brewery to others. This enables donation camp, HIV awarenessother breweries in the group to learn from A training session was held to certify 27 workshops, health camps and polioeach other and develop faster. Campus advanced tasters into the SABMiller Global vaccinations drives.breweries have been set up at our larger (Beer) Tasting System. Delegates werebreweries to perform specific projects, Haryana Breweries (HB), Haryana from all over India.which are of benefit to all the other Construction of a new 1 million hl pa East Coast Breweries (ECB), Orissabreweries in the group. The driving force brewery on the current site commenced. The brewery stepped forward in terms offor this is a manufacturing excellence The existing brewery maintained very high quality and safety management.programme (MEP), which is the tool for quality standards. 2 SKOL Breweries Limited 3
  • 5. 4 Environment and safety awareness All employees were given basic fire-fighting SICA Breweries (SB), Puducherry sessions were held in the local community. and first aid training. Several workers with A major expansion took place to increase The ECB team also drove HIV awareness more than 25 years service each had their capacity above 300,000 hl pa. Extensive and set up a health camp for the people achievement recognized at a ceremony upgrades took place in Brewing, of Cuttack. in February. Packaging and Utilities supply areas. Employees were encouraged to enjoy Malabar Breweries (MB), Kerala Management focused on workplace themselves at work (“puja, picnics & Brewery capacity has been increased safety and environmental management prizes”). An employee competition was by upgrading cellars tanks and raw improvement. held to decide on the brewery safety materials storage facilities. In August the management statement. brewery was awarded the SABMiller India ECB was nominated by the labour “Best Brewery” award. commissioner to receive the award for the best factory with the “Employer – Employee Relationship” Charminar Breweries (CB), Andhra Pradesh Managed by SKOL since 2003, CBL is our largest brewery. Work also commenced to increase that capacity a further 50% (including a new 21,000 bottles per hour packaging line, draft beer unit, effluent/water treatment plants, solid fuel boiler). The brewery motto is “winning & working in teams”. There has been emphasis on team- building and skills enhancement. Major strides in 2007/8 include implementation of a new maintenance management system and a major reduction in power and water usage ratios (the best in SABMiller India). CBL was runner up in the SABMiller Africa and Asia “Best Brewery” competition. CBL is the “Campus Brewery” for both yeast management and bottle washing. The team has been very active in the community; health care programmes, disease awareness programmes (AIDS, TB, Polio), providing drinking water and street lighting in Shivampet village and helping to develop the local school. Mysore Breweries (MB), Karnataka A new 15,000 units per hour canning line was commissioned. MBL is the “Campus Brewery” for the improvement of bottle labelling and outer packaging appearance. There has been much focus on environment and safety management, both in the brewery and the local community. During the annual “Safety Awareness Week” employees were given training on managing safety in the home. Families were involved and industrial theatre was used as a communication tool.
  • 6. SKOL Breweries LimitedBoard of Directors Registered OfficeMr. Ari Mervis - Chairman No.1, Mahal Industrial Estate,Mr. Jonathan Andrew Kirby Mahakali Road,Ms. Sue Clark Andheri (East),Mr. Richard (Pete) L Lloyd Mumbai – 400 093Ms. Maya Makanjee - up to 23.06.2008Mr. T.S.R. Subramanian - from 23.06.2008 Corporate OfficeMr. Jean-Marc Delpon de Vaux - Managing Director Jalahalli Camp Road, Yeshwanthpur,Statutory Auditors Bangalore-560 022BSR & Co.,Chartered Accountants Audit CommitteeMaruthi Info-Tech Centre, Mr. Jonathan Andrew Kirby - Chairman11-12/1, Inner Ring Road, Mr. Ari MervisKoramangala, Bangalore – 560 071 Ms. Maya Makanjee - up to 23.06.2008 Mr. Richard (Pete) L Lloyd - from 23.06.2008BankersStandard Chartered BankABN Amro BankThe Hongkong & Shanghai Banking CorporationSociete GeneraleICICI Bank LimitedRegistrar & Share Transfer Agent Share TransferSharepro Services (India) Pvt LtdSatam Estate, 3rd Floor,Above Bank of Baroda, HaryanaCardinal Gracious Road, CDB HBChakala, Andheri (E), Mumbai – 400 099 RB Uttar Pradesh Rajasthan Orissa PALS ECB Maharashtra Andhra Pradesh CB Karnataka MBHB: Haryana BreweriesCDB: Central Distilleries & Breweries MalabarRB: Rochees BreweriesPALS: PALS PondicherryECB: East Coast Breweries Kerala SICACB: Charminar BreweriesMB: Mysore BreweriesMalabar: Malabar BreweriesSICA: SICA Breweries 4 SKOL Breweries Limited 5
  • 7. NoticeNOTICE is hereby given that the 19th RESOLVED THAT Mr. T.S.R. RESOLVED THAT All other terms and conditions asAnnual General Meeting of the members Subramanian, who in terms of approved by the Centralof the Company will be held at M.C. Ghia Section 260 of the Companies Act, Government and members willHall, Bhogilal Hargovindas Building, 2nd 1956 holds office till the date of this remain same.floor, 18/20, K. Dubash Marg, Behind Annual General Meeting, and in RESOLVED FURTHER THAT in the RESOLVED FURTHER THATPrince of Wales Museum, Kala Ghoda, respect of whom a notice has been event of loss or absence orMumbai – 400 001 on Wednesday, the received from a Member under inadequacy of profits during any10th September, 2008 at 3.00 p.m. to Section 257 of the said Act, be and financial year, the abovetransact the following business: is hereby appointed a Director of the remuneration shall be treated as Company liable to retire by rotation.Ordinary Business: minimum remuneration payable to 06. To consider revision of remuneration Mr. Jean-Marc Delpon de Vaux.01. To receive, consider and adopt the of Mr. Jean-Marc Delpon de Vaux, Audited Balance Sheet as at 31st 07. To consider increase in Borrowing Managing Director of the Company. March, 2008 and the Profit & Loss Powers. Account for the year ended on that To consider and if thought fit, to To consider and if thought fit, to date and the Report of the Directors pass, with or without modification/s, pass, with or without modification/s, and Auditors thereon. the following Resolution as a Special the following Resolution as a Special Resolution:02. To appoint a Director in place of Resolution: Mr. Jonathan Andrew Kirby, who RESOLVED THAT pursuant to the RESOLVED THAT RESOLVED THAT pursuant to RESOLVED THAT retires by rotation at this meeting provisions of Sections 198, 269, Section 293(1)(d) of the Companies and being eligible, offers himself for 309 and 310 and other applicable Act, 1956 and other enabling re-appointment. provisions, if any, of the Companies provisions, if any, of the said Act, Act, 1956 (hereinafter called the03. RESOLVED THAT M/s. BSR & Co., RESOLVED THAT consent be and is hereby accorded “Act”) read with Schedule XIII to the Chartered Accountants, who retire to the Board of Directors of the said Act as amended up to date or at the conclusion of this Annual Company for borrowing any sum or any statutory modification or re- General Meeting be and are hereby sums of money from time to time enactment thereof and subject to appointed as Statutory Auditors of from one or more body corporate, the approval of shareholders and the Company till the next Annual banks or financial institutions or the Central Government, the General Meeting at a remuneration public by way of cash, credit remuneration payable to Mr. Jean- to be fixed by the Board of Directors advances, deposits or other loans Marc Delpon de Vaux is being and billed progressively. whether secured or unsecured by increased as set out below with mortgage, charge, hypothecation orSpecial Business: liberty to the Directors to alter and pledge of the Company’s assets and vary the terms and conditions of the04. To consider appointment of Mr. Ari properties whether movables and/or remuneration as the case may be as Mervis as Director of the Company. immovables or stock-in-trade suggested by the shareholders/ (including book debts, bills, raw To consider and if thought fit, to Central Government and agreed to materials, stores and spare parts pass with or without modification, between the Directors and Mr. Jean- and components in stock or in the following Resolution as an Marc Delpon de Vaux or as may be transit) work-in-progress and debts Ordinary Resolution: varied in the General Meeting. and advances notwithstanding that RESOLVED THAT Mr. Ari Mervis, RESOLVED THAT I. (a) Salary : Up to Rs. 25,00,000/- per the sum or sums so borrowed who in terms of Section 260 of the month together with the money’s, if any, Companies Act, 1956 holds office till already borrowed by the Company The annual increments will be the date of this Annual General (apart from the temporary loans decided by the Board of Directors Meeting, and in respect of whom a obtained from the Company’s depending upon the profitability of notice has been received from a the Company and other relevant Member under Section 257 of the factors. said Act, be and is hereby appointed a Director of the Company liable to retire by rotation.05. To consider appointment of Mr. T.S.R. Subramanian as Director of the Company. To consider and if thought fit, to pass with or without modification, the following Resolution as an Ordinary Resolution:
  • 8. bankers in the ordinary course of V. The Authorised Share Capital of the SABMiller Asia B.V. 50,000,000 business) may exceed in the Company is Rs. 3,000,000,000 Equity shares of the Company of the aggregate paid-up capital of the (Rupees Three hundred crores only) face value of Rs.10/- each at a Company and its free reserves divided into 300,000,000 Equity premium of Rs. 46/- per share. which have not been set part for any shares of Rs.10/- each. The RESOLVED FURTHER THAT such RESOLVED FURTHER THAT specific purpose but so that the Company has power, from time to new equity shares shall rank pari total amount up to which the time, to increase or reduce its passu with the existing equity shares moneys may be so borrowed shall capital and divide the shares in the of the Company, except that they not at any one time exceed capital for the time being into several shall not rank for dividend, if any, Rs.1500 crores. classes and to attach thereto declared or paid in respect of any respectively such preferential,08. To consider an increase in the financial year of the Company prior deferred, qualified or other special Authorized Share Capital of the to the financial year in which they are rights, privileges conditions or Company: allotted and shall rank for dividend restrictions as may be determined pari passu from the date of their To consider and if thought fit, to by or in accordance with the Articles allotment in respect of the financial pass, with or without modification/s, of Association of the Company and year in which they are allotted. the following Resolution as a Special to vary, modify or abrogate any Resolution. such right, privilege or condition or RESOLVED FURTHER THAT Mr. RESOLVED FURTHER THAT restrictions in such manner as may Jean-Marc Delpon de Vaux and Mr. RESOLVED THAT in accordance RESOLVED THAT for the time being be permitted by Kevin Heydenrych be and are hereby with the provisions of Section 94 the Articles of Association of the jointly and/or severally authorized to and other applicable provisions of Company or the legislative negotiate, execute and deliver any the Companies Act, 1956 (including provisions for the time being in force agreement, letter, deed or document any statutory modification(s) or re- in that behalf. or any amendments or modifications enactment thereof, for the time thereto in connection with the being in force) the existing 09. To consider a preferential issue of aforesaid preferential issue of shares Authorised Share Capital of the shares. in favour of SABMiller Asia B.V. and Company be and is hereby To consider and if thought fit, to to sign, execute, deliver and/or file all increased from Rs. 2,500,000,000 pass, with or without modification/s, relevant forms, filings, reports, (Rupees Two hundred fifty crores the following Resolution as a Special documents, etc., required by any only) divided into 250,000,000 Resolution. applicable regulations including with Equity shares of Rs.10/- (Rupees any regulatory authorities or an ten only) each to Rs. 3,000,000,000 RESOLVED THAT , pursuant to the RESOLVED THAT authorized dealer in terms of Indian (Rupees Three hundred crores only) provisions of Section 81(1A) and exchange control regulations. divided into 300,000,000 Equity other applicable provisions (if any) of shares of Rs.10/- (Rupees Ten only) the Companies Act, 1956, the BY ORDER OF THE BOARD each and the Memorandum of Unlisted Public Companies Pramod S M Association of the Company be (Preferential Allotment) Rules, 2003 Company Secretary altered accordingly. and the relevant provisions of the Memorandum and Articles of Date : 23rd June, 2008 RESOLVED FURTHER THAT the RESOLVED FURTHER THAT Association of the Company, the Place : Bangalore existing Clause V of the consent of the Company be and is Memorandum of Association be and hereby accorded to offer, issue and/ is hereby substituted by the or allot on preferential basis to following Clause V: 6 SKOL Breweries Limited 7
  • 9. NOTES: unclaimed and unpaid for a period of 5. Mr. T.S.R. Subramanian is a Diploma 7 years and transferred to the Fund in Mathematics from Imperial01. A member entitled to attend and and no payment shall be made in College, London and has done his vote at the meeting is entitled to respect of any such claim. Masters in Public Administration appoint a proxy to attend and vote from Harvard University. He is an on a poll in his/her stead. A proxy Explanatory Statement pursuant to Ex IAS officer who held various need not be a member of the Section 173(2) of the Companies senior positions in the Government Company. Proxies in order to be Act, 1956. including the post of Cabinet effective must be deposited at the Secretary to the Government Item Nos. 2, 4, 5, 6, 7, 8 and 9 registered office of the Company not of India. less than forty-eight hours before A brief resume of the Directors the meeting. A blank proxy form is offering themselves for re-election is Except for Mr. T.S.R. Subramanian, enclosed. given below: no other Director is interested in the aforesaid Resolution.02. The Register of Members and the 2. Mr. Jonathan Andrew Kirby is a Share Transfer Books of the B. Accounting (University of the 6. Mr. Jean-Marc Delpon de Vaux was Company will remain closed from Witwatersrand), CA (SA) and has 21 appointed as Managing Director of 1st September, 2008 to 10th years of rich experience. He is the the Company w.e.f. 1st August, 2006 September, 2008 [both days CFO of SABMiller Africa. at the Board Meeting held on 17th inclusive]. July, 2006. His appointment and Except for Mr. Jonathan Andrew remuneration payable has been03. For convenience of members an Kirby, no other Director is interested approved by the members and the attendance slip is also annexed. in the aforesaid Resolution. Central Government vide its letter Members are requested to affix their dated 18th June, 2007. The 4. Mr. Ari Mervis is a B.Com with major signature at the space provided Remuneration Committee, subject therefore and handover the same at in Economics, Marketing and Commercial Law. He is the Managing to the approval of the Members and the place of meeting. The proxy of a the Central Government has member should mark on the Director of SABMiller Asia. He has held a number of senior positions in approved the increase in attendance slip as Proxy. Members remuneration of Mr. Jean-Marc are also requested to bring their the SABMiller Group. Delpon de Vaux. Accordingly copies of the Annual Report to the Except for Mr. Ari Mervis, no other resolution for increase in venue of the meeting. Director is interested in the aforesaid remuneration of Mr. Jean-Marc Resolution. Delpon de Vaux as Managing04. All queries relating to non-receipt of share certificates after transfer/ Director is placed before you for transmission/ dematerialization/ your approval. The information as rematerialisation, mandates, change required under Schedule XIII Part II, of address, nomination, etc., may be Section II 1 (C) is given below: sent to the Registrar & Share Transfer Agents, M/s. Sharepro I. General Information: Services (India) Pvt. Ltd, Satam Estate, 3rd Floor, Above Bank of 1. Nature of Industry The Company is engaged in Baroda, Cardinal Gracious Road, manufacture and sale of Beer Chakala, Andheri (East), Mumbai 2. Date or expected date of The Company is an existing Company 400 099, Tel: (022) 67720334 / commencement of commercial 67720300, Fax: (022) 28375646, production Email sharepro@vsnl.com. 3. In case of new companies, N.A.05. Pursuant to Section 205C of the expected date of Companies Act, 1956 all unclaimed commencement of activities dividends up to the Financial Year as per project approved by 1999-2000 have been transferred financial institutions appearing to the Investor Education and in the prospectus. Protection Fund. Members of the erstwhile Mysore Breweries Limited, 4. Financial performance based on 31-3-09 31-3-10 31-3-11 Pals Distilleries Limited, Charminar given indicators Rs.Crores Breweries Limited and SICA Turnover 2732 3127 3700 Breweries Limited who have not yet claimed their dividend for the Profit before tax (41) 20 29 financial year 2000-2001 and thereafter, may claim from the 5. Export performance and net 31-3-06 31-3-07 31-3-08 Company before the same is foreign exchange collaborations Rs.Crores transferred to the Fund. It may be 0.06 Nil 7 noted that no claims shall lie against 6. Foreign investments or Nil the Company or the Fund in respect collaborators, if any of individual amounts which were
  • 10. NoticeII. Information about the appointee: IV. IV. Disclosures: As the Company is not a listed1. Background details company, disclosure on Corporate Mr. Jean-Marc Delpon de Vaux worked for Unilever for 25 years where he held Governance is not mandatory and numerous senior marketing and general management positions, including hence not given. Chairman and CEO of the Maghreb region. None of the Directors are interested in the said resolution except Mr. Jean-Marc Delpon de Vaux 2. Past remuneration 2006-07 2007-08 to the extent of remuneration Rs.1,49,74,236 2,24,34,669 proposed. 7. At the Annual General Meeting of 3. Recognition or awards NA the Company held on 29th November 2005, the Members 4. Job profile and his suitability With the vast and rich experience empowered the Board of Directors Mr. Jean-Marc Delpon de Vaux is a under Section 293(1)(d) of the suitable candidate to look after the entire Companies Act, 1956 to borrow Indian beer operations. Under his tenure monies for the business purposes as Managing Director the Turnover of the of the Company up to a limit of Company has increased by 28%. Rs.1000 Crores. Keeping in view the Company’s business requirements and its investment and 5. Remuneration proposed As set out in the resolution growth plans, it is considered desirable to increase the said 6. Comparative remuneration Mr. Jean-Marc Delpon de Vaux represents borrowing limits to Rs.1500 Crores profile with respect to industry SABMiller which is among the leading as outlined in the resolution. size of the Company, profile of breweries of the world and his the position and person (in compensation is determined in In terms of the provisions of Section case of expatriates the accordance with the prevalent system in 293 (1) (d) of the Companies Act, relevant details would be w.r.t. the SABMiller Group and in keeping with 1956, approval of the members is the country of his origin) persons of his qualification, experience. being accordingly sought through resolution under item no.7 for such 7. Pecuniary relationship directly No pecuniary relationship increase in limits. or indirectly with the Company, Directly or Indirectly with the Company or 8. The Company requires to be or relationship with the any managerial personnel capitalized to enable it to pay down managerial personnel, if any. some of its debts and for other corporate purposes. The Company proposes to issue and allot, onIII. Other information: preferential basis 50000000 equity shares of face value Rs. 10/- each to SABMiller Asia B.V. at a premium 1. Reasons of loss or The cost of Malt and fuel the main raw of Rs. 46/- per share. inadequate profits material has gone up during the year by This will require the Company to more than 100%. Higher Depreciation raise its Authorized Share Capital. and interest costs The Special Resolution set out at item no. 8 in the notice is intended 2. Steps taken or proposed to The Company has started building long to obtain such approval and the be taken for improvement term collaborative relationships with Board recommends the resolution farming communities through for your approval. programmes such as Saanjhi Unnati. To bring down the interest cost equity None of the Directors of the infusion is being considered. Company are deemed to be interested in the said resolution. The 3. Expected increase in Board recommends the adoption of productivity and profits in the resolution. measurable terms. 31-3-09 31-3-10 31-3-11 9. As stated above, the Company Rs.Crores proposes to issue and allot, on a preferential basis 50000000 equity Turnover 2732 3127 3700 shares of face value Rs. 10/- each Profit before tax (41) 20 29 to SABMiller Asia B.V. at a premium of Rs. 46/- per share (based on the valuation report) which requires 8 SKOL Breweries Limited 9
  • 11. Notice shareholders’ approval under Shares of the Company to section 81 (1A) of the Companies SABMiller Asia B.V. for cash and to Act, 1956. utilize the money received hereunder for the purpose of paying down Information as required under some of its debts and for other Unlisted Public Companies corporate purposes. (Preferential Allotment) Rules, 2003 is given below. d. The class or classes of persons to whom the allotment is proposed to a. The price of price band at which be made: The allotment will be made allotment is proposed: The Equity to SABMiller Asia B.V. Shares of Rs.10/- each will be allotted at a premium of Rs.46/- per e. Intention of promoters/directors/key Share. management persons to subscribe to the offer: SABMiller Asia B.V. has b. The relevant date on the basis of signified its intention of subscribing which price has been arrived at: 31st to the issue. March, 2008 f. Shareholding pattern of promoters c. The objects of the issue through and others classes of shares before preferential offer: To issue Equity and after the offer: The shareholding Category Pre Issue Post Issue No of Shares % No of Shares % A Promoter’s holding Promoter omoter’ 229384473 99.22 279384473 99.38 Sub total 229384473 99.22 279384473 99.38 B Non-Promoters Holding Institutional Investors a Mutual Funds and UTI 2240 0.00 2240 0.00 b Banks, Insurance co, FI 4008 0.00 4008 0.00 c FII - - - - Sub total 6248 0.00 6248 0.00 Others a Private Corporate Bodies 73168 0.03 73168 0.02 b Indian public 1616291 0.70 1616291 0.57 c NRI 103565 0.04 103565 0.02 d Any other - - - - Sub total 1793024 0.78 1739533 0.62 Total 231183745 100.00 281130254 100.00 pattern of the Company before and None of the Directors of the after the issue is set out below Company are deemed to be interested in the said resolution. g. Proposed time within which the allotment shall be completed: within The Board recommends the one year from the date of the AGM adoption of the resolution h. Whether a change in control is BY ORDER OF THE BOARD intended or expected: There will be Pramod S M no change in control of the Company Secretary Company after the preferential issue. Date : 23rd June, 2008 Place : Bangalore
  • 12. 10SKOL Breweries Limited 11
  • 13. Directors’ Report Dear Members, Your Directors have pleasure in submitting their report and the Statement of accounts for the year ended 31st March 2008. RESULTS FINANCIAL RESULTS (Rupees in Crores) Financial Year Financial Year 2007-2008 2006-2007 Gross Revenue 1741.69 1348.54 Profit before taxation 40.85 45.33 Less: Provision for taxation 6.37 5.13 Profit after taxation 34.48 40.19 Surplus/(deficit) brought forward from previous year 129.69 169.89 Balance carried to Balance Sheet 95.21 129.69 OPERATIONS OPERATIONS Corporation Limited that they would look into this issue and provide resolution. The performance of your Company during the year 2007-08 has During the previous year your Company considerably improved. The turnover acquired the Foster’s brand and trade increased by 28% over the previous year mark in India for a consideration. An to Rs.1741 Crores from Rs.1348 application for an advance tax ruling has Crores. The net profit of the Company is been made by Foster’s Australia seeking lower on account of deferred taxes. clarification on the taxability of this The focus areas of your Company on the transaction in India. The advance ruling way forward are sustainability and long authorities have held that the transaction term growth. is taxable as the asset is situated in India. Your Company is sufficiently covered by A sum of Rs.281 Crores has been Indemnity for any liability that may arise invested in upgrading existing plant and to your Company on account of any tax machinery and in developing capacity. claim on this account. Your Company is putting up a state-of- the-art one million hecto-litre capacity Your Board enjoys the unqualified brown field project in the State of support of all its financiers whose Haryana, which will be operational by the confidence in the future of your Company end of this year. There has also been is evidenced by the fact that all continuous upgradation and borrowings have been executed without implementation of best practices at all the bankers taking any charges over any units to increase productivity and bring of your Company’s assets. As such the down the cost of production. New can borrowings are short term and renewed lines have been put in place in Mysore from year to year. Breweries and Rochees Breweries and this has enabled the Company to meet Your Board considers that bottles used the growing demand for cans. to deliver the Company’s products to the market are in substance returnable Your Company has been requesting for a containers and that this economic reality price increase from the Andhra Pradesh should be reflected in the way the Beverages Corporation Limited to partly Company accounts for its containers. For offset the increase in the cost of raw this reason bottles are accounted for on materials and other inputs. However, a returnable basis, in accordance with even after protracted requests and previous years and Indian accounting negotiations your Company has been practices. unable to obtain such an increase and DIVIDEND this led to a stand off which resulted in temporary suspension of operations at In order to conserve cash for expansion Charminar Breweries for 38 days during and modernisation the Directors do not the peak season. The plant has since recommend any dividend on the equity been re-opened on the assurance from capital. the Andhra Pradesh Beverages
  • 14. VALUES computation for determining the quantum of ex-gratia payment madeThe five core values of the Company are at the end of the year in accordanceas follows: with its Performance Management1. Our people are our enduring System. Moreover, the achievement advantage: of these goals consistently creates a growth path for executives in your This value has been at the core of organization. the Companies approach towards its employees. 3. We work and win in teams: The Indian growth story has all the This is not a corollary to the above ingredients to drive the SKOL value, but in fact a supporting value growth story. 28% of India lives in which highlights the importance of urban areas and this is equivalent to ‘handshake zones’ where the size of the US population. The employees need to combine to help rural population is taking on more others to achieve goals. and more urban characteristics The overlapping areas are clearly everyday. Today the youth drives identified to ensure there are no India and will continue to do so in conflicts between goals of team the foreseeable future. Even in 2015, members and overall objectives 50% of the Indian population will be of the Company. under 30 years. According to a 4. We understand and respect our survey on GDP Growth conducted consumers: customers and consumers by Global Insight, Lead Indicators of Inflection are visible in India. This Your Company adopts best presents a tremendous opportunity practices in dealing with consumers for SKOL, especially in light of the and customers. A dedicated fact that per capita beer Customer Complaint Cell has been consumption in India is only one litre set up and all communications are compared to the global average of monitored and relevant action is 22 litres. But this growth also means initiated. The Company has a huge tussle for the right human developed software to bring focus resources, both in terms of hiring into feedback from customers with a and retaining talent. This has view to betterment of product become a make or break factor for quality and service. This focus on many organizations. We at SKOL the customer is intended to be used are using various tools like Market as a major differentiator and a Surveys, Exit Interview Analysis, competitive advantage for the Focus Group Discussions to get Company. Moreover, your Company insights into the Indian Talent Market believes in conducting extensive and Data from prospective hires and market research both for monitoring have in place strategies to address existing products as well as for both hard and soft issues. introduction of new products in the market with a view to satisfying the2. Accountability is clear and needs of the customers and personal: personal consumers. There are clear defined Your Company has introduced new accountability and goals laid down products to meet the customers’ for all Directors and employees. The aspirational values by launching goals are clear, quantifiable and Haywards Black and Peroni. measurable. The performance of every employee is closely monitored 5. Our reputation is indivisible: and measured in accordance with Towards the end the Company not their goals and it is their only internally but also externally responsibility to accomplish them. focuses on large number of areas of On account of this value, there is a Corporate Social Responsibility desire in each and every employee for betterment of the work force as to achieve and exceed goals. well as communities that we Your Company has introduced interact with some of the examples various positive measures to drive are as follows: growth through clear accountability by introducing STI method of 12 SKOL Breweries Limited 13
  • 15. CORPORATE SOCIALCORPORATE improve quality, enhance productivity,RESPONSIBILITY increase acreage and channelize barleySKOL has been focusing on the following for our malting use, but also to workareas of Corporate Social Responsibility towards the welfare of the farmersfor the betterment of its work force as through social programs.well as the communities in which it The project adds value at all stages ofoperates. . the value chain with eventual benefits toYour Company recognises that HIV/AIDS trickle to the farmer. The farmers getis a major threat to the world of work certified quality seeds and otherwhere it affects the most productive agricultural inputs from the SU centerssegment of the labor force and imposes besides the free but valuable agronomicalhuge costs on enterprises through advice from our experts. They have andeclining productivity and loss of skills assured market, transparent dealings, fairand experience. pricing, incur no hidden costs and get spot payment which they do not receiveIn order to curb the menace of HIV/AIDS when they market their produce tothe need of the hour is to have a traditional channels.proactive approach. Your Companyacknowledges the seriousness of the The program has gained significantissue and the future impact this may have momentum, from a beginning at abouton the broader communities, if left 4000 acres during 2005-06; theunchecked. program is extended to about 13,000 acres during 2007-08 and a memberYour Company has signed a MOU with farmer base of 6020 across 4 districts inInternational Labour Organisation (ILO) Rajasthan. During the year under reviewfor its work place programme in India. the Company has procured 7000 tonnesThe aim of this partnership is to help of Barely through this programme.prevent the transmission of HIV amongworkers and to mitigate the impact of the ANALYSIS COMPANY SWOT ANALYSIS OF THE COMPANYepidemic on work place productivity. Strengths:Your Company has donated Medical Van Access to SABMiller group’sin Orissa to NGO Sadhana to provide technology and brandshealth care facilities to rural communitiesof Orissa. The van would work like a Well established brands in themobile doctor going around villages to marketconduct routine check ups and provide Well diversified brand portfolioon time primary health services. covering all segments of the marketYour Company also conducted various Nine plants spread across Indiaother activities such as blood donation covering all major beer marketscamps, health camps, polio drives etcacross its units. High quality productsSaanjhi Unnati On-going product innovation to attract new consumersThe beer industry is expected to continuegrowing rapidly as the Indian economy Ability to set up new plants atgrows. Malted food industry is also minimal cost and in record time.growing rapidly. Barley is the key Strong management teamingredient for both. Traditionally barleyhas been grown in India by small and Weakness:marginal farmers on rain-fed land. Inability to raise prices of theThe acreage, yield and production had product as mainly the price is fixedbeen shrinking over the years and the by governmentquality was poor. Each state has its own excise laws,Considering our future demand for high whereby movement of goods fromquality malting grade barley, we designed one state to another is timeand implemented an initiative in 2005 consuming and costlycalled “Saanjhi Unnati” (Progressthrough Partnership) in Rajasthan.The programme is aimed at not only to
  • 16. Directors’ Report No plant in Tamil Nadu, thereby Mr.Jean-Marc Delpon de Vaux was Particulars in the Report of Board of inability to participate in the second appointed as Managing Director Directors) Rules, 1988 to the extent biggest beer market in India w.e.f. 1st August 2006 and the Central applicable are set in the annexure hereto. Government has approved hisOpportunities: DIRECTORS’ RESPONSIBILITY appointment and remuneration payable STA STATEMENT U/S 217 (2AA) OF THE Per capita consumption of Beer is to the Managing Director vide its letter COMPANIES ACT, COMPANIES ACT, 1956 one litre, way below world average dated 18.6.2007. His remuneration is being proposed to increase from Your Directors state that: Growing per capita incomes raising Rs.18,00,000/- to Rs. 25,00,000/- people’s aspirations can impact beer per month, subject to Members and 1. The financial statements have been sales positively Central Government Approval. prepared in conformity with the generally accepted accounting India has the highest number of Ms. Maya Makanjee has resigned as a principles and applicable accounting young people who are the potential Director of the Company w.e.f. 23rd June standards in India. consumers for the Company 2008. The Board places on record the meritorious services rendered by Ms. 2. The Directors have selected such Easing of the regulatory environment Maya Makanjee during her tenure as accounting policies as are applicable can lead to tremendous market Director on the Board. and have applied them consistently growth and made reasonable and prudentThreats: AUDIT COMMITTEE judgment and estimates so as to give a true and fair view of the state Rising cost of raw materials Pursuant to the provisions of Section of affairs of the Company at the end 292A of the Companies Act, 1956 an Talent attraction and retention of the financial year and of the profit Audit Committee has been constituted. for the year. Increasingly competitive The present members of the Committee environment with all major global are, Mr. Jonathan Andrew Kirby, Mr. Ari 3. The Directors have taken proper and players entering the Indian market Mervis & Mr. Richard (Pete) L Lloyd. sufficient care for the maintenance of Mr. Jonathan Andrew Kirby Chairman of adequate accounting records in Heineken partnering UB gives it a the Audit Committee was present at the accordance with the provisions of national reach for an aggressive roll last Annual General Meeting. the Companies Act for safeguarding out of the Brand the assets of the Company and for AUDITORSDIRECTORS preventing and detecting fraud and M/s BSR & Co., Chartered Accountants, other irregularities.In accordance with the Articles of retiring Auditors, have signified theirAssociation, Mr. Jonathan Andrew Kirby, 4. The financial statements have been willingness to be reappointed asDirector of the Company retires by prepared on the basis of “Going Statutory Auditors of the Company. Theyrotation at this meeting and being Concern” considering the ability of have confirmed that their reappointmenteligible, offer himself for re-appointment. the Company to carry on its if made will be within the limits prescribed business in the foreseeable future.During the year Mr. Ari Mervis was under Section 224(1B) of the Companiesappointed as an additional Director of the Act, 1956. Your Directors recommend ACKNOWLEDGEMENTCompany, whose term of office expires their appointment at the ensuing Annual General Meeting. Your Directors wish to place on recordat this Annual General Meeting and is their appreciation to employees at alleligible for re-appointment. PUBLIC DEPOSIT levels for their co-operation. TheDuring the year Mr. T.S.R. Subramanian Directors would also like to acknowledge During the year, the Company has notwas appointed as an additional Director the continued support of the Company’s accepted any public deposits as definedof the Company, whose term of office Bankers, Distributors, Shareholders, in the Companies (Acceptance ofexpires at this Annual General Meeting Customers and Suppliers. Deposits) Rules, 1975.and is eligible for re-appointment. PARTICULARS OF EMPLOYEES ARTICULARSMr. Andre Charles Parker, Chairman ofthe Board retired from the services of The details of employees covered underSABMiller Group. The Board places on the provisions of Section 217 (2A) of therecord its appreciation for the valuable Companies Act, 1956 and the rules FOR AND ON BEHALF OF THE BOARDservices rendered by Mr. Andre Charles framed thereunder, as amended to dateParker during his tenure as Chairman of is attached herewith. Jonathan Andrew Kirbythe Board. It is on account of his vision CONSERVATION OF ENERGY AND CONSERV Directorand foresight that the Beer business of TECHNOLOGY ABSORPTIONSABMiller group was set up and Jean-Marc Delpon de Vauxexpanded in India. The statement pursuant to Section 217 Managing Director (1) (e) of the Companies Act, 1956 read Place: Bangalore with the Companies (Disclosure of Dated: June 23, 2008 14 SKOL Breweries Limited 15
  • 17. Directors’ Report COMPANIES PAR ARTICULARS DISCLOSURE AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF DIRECTORS) RULES, 1988. A. CONSERVATION OF ENERGY CONSERV The output performance for boiler fuel consumption and electricity of the Company is as under: Boiler energy consumption MJ/HL Electricity consumption in kWh/HL 18 250 16 200 14 12 150 10 8 100 6 4 50 2 0 0 F’05 F’06 F’07 F’08 F’05 F’06 F’07 F’08The measures taken by the Company at b) Technology absorption,its various units are as under- adaptation and innovation1. Extensive benchmarking including international and target setting. Efforts in brief made towards It has always been our endeavour to technology absorption, adaptation adopt the latest developments in Brewing2. Use of methane generated from and innovation. Technology in order to minimize our waste water treatment as boiler fuel. environmental impact. Trying various new3. Fuel switch from fossil fuel to types of brewing aids to improve our biomass in selected breweries to quality is an ongoing and continuous reduce the carbon footprint. process.4. Focussed initiatives on Water Benefits derived as a result of the The Company strives for continuous conservation and recycling in above efforts are product improvement in quality, cost and breweries. improvement, cost reduction, availability.5. Use of treated effluent for gardening product development, import of the factory campus by drain substitution. system. Use of UF & RO technology to recycle treated effluent water at In case of imported technology Keg cleaning and filling technology. Flash strategic sites. (imported during the last 5 years pasteurization technology. Special bottle reckoned from the beginning of the filling and labelling technology. Brewhouse6. Identification of refrigeration as a financial year) technologies. major energy user and preparation of a health check to minimize power consumption in the coming years. C. FOREIGN EXCHANGE EARNINGS AND OUTGO7. New capacity with new technology and economy of scale. During the year, the Company has earned Rs.7 Crores in foreign8. Rationalizing the Brewing operations exchange earnings. An amount of in line with packing production plan Rs.47.4 Crores was incurred in (especially during the low volume foreign exchange. and non season periods)B. TECHNOLOGY ABSORPTION FOR AND ON BEHALF OF THE BOARDa) Research & Development Jonathan Andrew Kirby Jean-Marc Delpon de Vaux Shared learning transferred from Director Managing Director global company community. Close co-operation with supply chain partners to improve quality and Place: Bangalore reduce waste. Dated: June 23, 2008
  • 18. 16SKOL Breweries Limited 17
  • 19. Auditors’ Report To the Members of SKOL Breweries Breweries (iv) in our opinion, the balance sheet, the Limited profit and loss account and the cash flow statement dealt with by this We have audited the attached balance report comply with the accounting sheet of SKOL Breweries Limited standards referred to in sub-section (“the Company”) as at 31 March 2008, (3C) of Section 211 of the the profit and loss account and the cash Companies Act, 1956; flow statement for the year ended on that date annexed thereto. These financial (v) on the basis of written statements are the responsibility of the representations received from the Company’s management. directors of the Company as on Our responsibility is to express an 31 March 2008, and taken on opinion on these financial statements record by the Board of Directors, based on our audit. we report that none of the directors is disqualified as on 31 March 2008 We conducted our audit in accordance from being appointed as a director with auditing standards generally in terms of clause (g) of sub-section accepted in India. Those standards (1) of Section 274 of the Companies require that we plan and perform the Act, 1956; and audit to obtain reasonable assurance about whether the financial statements (vi) in our opinion and to the best of our are free of material misstatement. An information and according to the audit includes examining, on a test basis, explanations given to us, the said evidence supporting the amounts and accounts give the information disclosures in the financial statements. required by the Companies Act, An audit also includes assessing the 1956, in the manner so required and accounting principles used and significant give a true and fair view in estimates made by management, as well conformity with the accounting as evaluating the overall financial principles generally accepted in statement presentation. We believe that India: our audit provides a reasonable basis for a. in the case of the balance sheet, our opinion. of the state of affairs of the As required by the Companies (Auditor’s Company as at 31 March 2008; Report) Order, 2003 (“the Order”), b. in the case of the profit and loss as amended, issued by the Central account, of the profit of the Government of India in terms of Company for the year ended on sub-section (4A) of Section 227 of the that date; and Companies Act, 1956, we enclose in the Annexure a statement on the c. in the case of the cash flow matters specified in paragraphs 4 and 5 statement, of the cash flows for of the Order. the year ended on that date. Further to our comments in the Annexure referred to above, we report that: for BSR & Co. (i) we have obtained all the information Chartered Accountants and explanations, which to the best of our knowledge and belief were Zubin Shekary necessary for the purpose of our Partner audit; Membership No. 48814 (ii) in our opinion, proper books of Bangalore account as required by law have 23 June 2008 been kept by the Company so far as appears from our examination of those books; (iii) the balance sheet, the profit and loss account and the cash flow statement dealt with by this report are in agreement with the books of account;
  • 20. Annexure to the Auditors’ report Annexure referred to in the Auditors’ unsecured, to companies, firms or other relevant provisions of the Report to the Members of SKOL other parties covered in the Companies Act, 1956 and the Breweries Limited (“the Company”) for register maintained under Section rules framed thereunder/ the the year ended 31 March 2008. We 301 of the Companies Act, 1956. directives issued by the Reserve report that: Accordingly, paragraph 4(iii)(a), Bank of India (as applicable) with 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the regard to deposits accepted fromi. (a) The Company has maintained Order is not applicable. the public. Accordingly, there proper records showing full have been no proceedings before particulars, including quantitative (e) The Company has taken a loan the Company Law Board or details and situation of fixed from a Company covered in the National Company Law Tribunal assets, except for returnable register maintained under Section (as applicable) or Reserve Bank of containers where the nature of the 301 of the Companies Act, 1956. India or any Court or any other trade does not permit itemised The maximum amount Tribunal in this matter and no recording of the location of outstanding during the year and order has been passed by any of returnable containers at any the year-end balance of such the aforesaid authorities. particular point of time. loans was Rs 483,141,746 and Rs 385,269,911 respectively. vii. In our opinion, the Company has (b) The Company has a regular an internal audit system programme of physical (f) In our opinion, the rate of interest commensurate with its size and verification of its fixed assets by for the above loan taken from nature of its business. which all fixed assets are verified companies, firms or other parties over a period of three years, listed in the register maintained viii. The Central Government has not except for returnable containers under section 301 of the prescribed the maintenance of where the nature of the trade Companies Act, 1956 are not, cost records under Section does not permit physical prima facie, prejudicial to the 209(1)(d) of the Companies Act, verification. In our opinion, this interest of the Company. Tenure 1956 for any of the products periodicity of physical verification and repayment terms have not manufactured and services is reasonable having regard to the been specified for such loans. rendered by the Company. size of the Company and the (g) According to the information and ix. (a) According to the information and nature of its assets. No material explanations given to us, the explanations given to us and on discrepancies were noticed on tenure and repayment terms have the basis of our examination of such verification. not been specified for the above the records of the Company, (c) Fixed assets disposed during the mentioned loan. Consequently, we amounts deducted/ accrued in year were not substantial, and are unable to comment on the books of account in respect therefore, do not affect the going paragraph 4(iii)(g) of the Order. of undisputed statutory dues concern assumption. including Provident Fund, iv. In our opinion and according to Employees’ State Insurance,ii. (a) The inventory, except for goods- the information and explanations Income-tax, Sales Tax, Wealth in-transit and stock lying with given to us, there is an adequate Tax, Service Tax, Customs Duty, third parties, has been physically internal control system Excise Duty, Cess, Investor verified by the management commensurate with the size of Education and Protection Fund during the year. In our opinion, the Company and the nature of its and other material statutory dues, the frequency of such verification business with regard to purchase have been regularly deposited is reasonable. For stocks lying of inventories and fixed assets during the year by the Company with third parties at the year-end, and with regard to the sale of with the appropriate authorities written confirmations have been goods and services. We have not though there has been a slight obtained. observed any major weakness in delay in a few cases. the internal control system during (b) The procedures for the physical verification of inventories followed the course of the audit. by the management are v. In our opinion and according to reasonable and adequate in the information and explanations relation to the size of the given to us, the particulars of Company and the nature of its contracts or arrangements business. referred to in Section 301 of the (c) The Company is maintaining Companies Act, 1956 have been entered in the register required to proper records of inventory. The discrepancies noticed on be maintained under that Section. verification between the physical vi. In our opinion, and according to stocks and the book records the information and explanations were not material. given to us, the Company hasiii. (a) The Company has not complied with the provisions of Section 58A, Section 58AA or granted any loans, secured or 18 SKOL Breweries Limited 19
  • 21. Further, since the Central Investor Education and (b) According to the information and Government has till date not Protection Fund and other explanations given to us, the following prescribed the amount of cess material statutory dues were in dues of Income-tax, Sales Tax and payable under Section 441A of arrears as at 31 March 2008 for a Excise Duty have not been deposited the Companies Act, 1956, we are period of more than six months from by the Company on account of not in a position to comment the date they became payable. In disputes. There are no dues of Wealth upon the regularity or otherwise respect of sales tax, the Company is Tax, Service Tax, Customs Duty and of the Company in depositing the in process of collecting Statutory Cess, which have not been deposited same. Forms. Management has represented with the appropriate authorities on that the same would be submitted to account of any dispute. According to the information and the authorities at the time of the explanations given to us, no assessment. Hence payment of undisputed amounts payable in differential sales tax has not been respect of Provident Fund, made on the Statutory Forms which Employees’ State Insurance, are pending to be collected for the Income-tax, Wealth Tax, Service Tax, periods for which assessments have Customs Duty, Excise Duty, not been completed.Period to which the amount relates Amount (Rs million) Forum where dispute is pendingExcise Duty under State Excise Acts2001 – 02 to 2004 – 05 10.88 Orissa High Court1974 – 75 to 1990 – 91 13.75 Financial Commissioner, Haryana2000 – 01 1.04 Commissioner of State Excise, Maharashtra1997 – 98 to 1999 – 00 0.33 Karnataka High Court1998 – 99 to 2004 – 05 6.68 Karnataka High Court1983 – 84 to 1988 – 89 0.55 Bombay High Court2005 – 06 2.15 Orissa High Court1996 – 97 to 1999 – 00 70.24 Customs Excise Service Tax Appellate Tribunal, Mumbai1989 3.22 Orissa High Court Tax TaxSales Tax under State Sales Tax Acts1994 – 95 to 2000-01 92.73 Appellate Tribunal, Orissa1989 – 90 to 1996 – 97 and 1998 – 99 to 2003 – 04 5.97 Appellate Tribunal, Haryana2002 – 03 to 2003 – 04 1.26 Assistant Commissioner of Commercial Taxes (Appeals), New Delhi1995 – 96 4.14 Appellate Tribunal, Maharashtra2001 – 02 13.62 Appellate Tribunal, Maharashtra1991 – 92 to 1992 – 1993 3.68 Andhra Pradesh High Court2003 – 04 0.19 Appellate Tribunal, Uttar Pradesh1992 – 93 1.51 Appellate Tribunal, Maharashtra1996 – 97 1.45 Appellate Tribunal, Maharashtra1981 – 82 to 1984 – 85 and 1997 – 98 to 1998 – 99 11.98 Assessing Authority, Pondicherry2000 – 01 to 2003-04 6.18 Chandigarh High Court2003 – 04 to 2005 – 06 7.47 Supreme Court2002 – 03 5.43 Appellate Tribunal, Uttar Pradesh2003 – 04 4.03 Commissioner of Appeals, Uttar Pradesh2004 – 05 68.73 Deputy Commissioner, Meerut2003 – 07 0.38 Deputy Commissioner, Meerut2006 – 07 0.05 Joint Commissioner, Meerut2004 – 05 0.14 Additional Commissioner Sales Tax, New Delhi2002 – 03 8.05 Deputy Commissioner, MumbaiIncome-tax under Income-tax Act, 1961AY 2003 – 04 32.73 Appellate Tribunal, MumbaiAY 1996 – 97 0.15 Appellate Tribunal, Mumbai
  • 22. Annexure to the Auditors’ reportx. The Company has accumulated opinion that funds raised on short- losses of Rs 952,184,208 at the term basis amounting to end of the financial year. The Rs. 2,652,096,907 have been used Company has not incurred cash for long-term investment in fixed losses in the financial year and in the assets and investments. immediately preceding financial year. xviii. The Company has not made anyxi. In our opinion and according to the preferential allotment of shares to information and explanations given companies/ firms/ parties covered in to us, the Company has not the register maintained under defaulted in repayment of dues to its Section 301 of the Companies Act, bankers. The Company did not have 1956. any outstanding dues to any xix. The Company did not have any financial institutions or outstanding debentures during the debentureholders during the year. year.xii. In our opinion the Company has xx. The Company has not raised any maintained adequate records in money by public issues during the cases where it has granted loans year. and advances on the basis of security by way of pledge of shares. xxi. According to the information and The Company has not granted any explanations given to us, no fraud on loans and advances on the basis of or by the Company has been security by way of pledge of noticed or reported during the debentures and other securities. course of the audit.xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit for BSR & Co. fund or a nidhi/ mutual benefit fund/ Chartered Accountants society. Zubin Shekaryxiv. According to the information and Partner explanations given to us, the Membership No. 48814 Company is not dealing or trading in shares, securities, debentures and Bangalore other investments. 23 June 2008xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.xvi. In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the 20 SKOL Breweries Limited 21
  • 23. Balance sheet as at 31 March 2008 (Rs.) As at As at Schedule 31 March 2008 31 March 2007 SOURCES OF FUNDS Shareholders’ funds Share capital 2 2,311,837,450 1,979,158,880 Reserves and surplus 3 6,406,852,856 4,610,316,326 8,718,690,306 6,589,475,206 Share application money pending allotment of shares - 1,863,000,000 Loan funds Unsecured loans 4 3,774,422,006 4,652,648,467 Deferred tax liability, net 18 (10) 63,744,036 - 12,556,856,348 13,105,123,673 APPLICATION OF FUNDS APPLICATION Fixed assets 5 Gross block 10,973,596,079 8,795,466,503 Less: Accumulated depreciation (2,074,943,657) (1,525,150,636) Less: Provision for impairment of fixed assets (156,563,671) (52,523,898) Net block 8,742,088,751 7,217,791,969 Capital work-in-progress 1,491,630,978 756,309,965 10,233,719,729 7,974,101,934 Investments 6 11,359,225 2,178,050 Current assets, loans and advances Inventories 7 1,183,482,865 774,519,494 Sundry debtors 8 2,536,219,383 1,484,582,230 Cash and bank balances 9 311,251,107 4,047,462,855 Loans and advances 10 1,242,942,582 1,114,045,283 5,273,895,937 7,420,609,862 Current liabilities and provisions Current liabilities 11 4,058,160,935 3,387,142,064 Provisions 12 361,193,684 426,751,996 4,419,354,619 3,813,894,060 Net current assets 854,541,318 3,606,715,802 Amalgamation adjustment reserve account 1,457,236,076 1,457,236,076 Debit balance in profit and loss account - 1,296,961,395 Less: Balance in general reserve account 3 - (1,232,069,584) - 64,891,811 12,556,856,348 13,105,123,673 S ignificant accounting policies 1 Notes to the accounts 18 The schedules referred to above form an integral part of the balance sheet As per our report attached for BSR & Co. for SKOL Breweries Limited Chartered Accountants Zubin Shekary Jean-Marc Delpon de Vaux Jonathan Andrew Kirby Partner Managing Director Director Membership No. 48814 Kevin Heydenrych Pramod S M Chief Finance Officer Company Secretary Bangalore Bangalore 23 June 2008 23 June 2008
  • 24. Profit and loss account for the year ended 31 March 2008 (Rs.) Schedule For the year ended For the year ended 31 March 2008 31 March 2007IncomeSale of manufactured goods, gross 17,120,144,115 13,384,952,487Sale of traded goods, gross 296,758,472 100,449,130 17,416,902,587 13,485,401,617Less: Excise duty (6,307,912,578) (4,840,701,234)Less: Discounts (743,348,972) (612,303,595)Sales, net 10,365,641,037 8,032,396,788Income from marketing operations 219,335,661 227,208,154Other income 13 281,767,214 179,188,724 10,866,743,912 8,438,793,666ExpenditureMaterial cost of sales 14 3,059,852,296 2,197,111,990Personnel costs 15 804,928,296 603,282,581Other expenses 16 5,469,854,808 4,348,072,365Depreciation 5 858,090,043 625,247,195Provision for impairment of fixed assets 18 (14) 117,306,243 (101,662,427)Interest 17 148,166,541 313,366,314 10,458,198,227 7,985,418,018Profit before tax 408,545,685 453,375,648Provision for tax - current tax - 37,573,724 - pertaining to earlier years (37,573,724) - - wealth tax 238,542 151,668 - fringe benefit tax 30,320,522 13,758,454 - deferred tax 18 (10) 70,783,158 -Profit after tax 344,777,187 401,891,802Debit balance in profit and loss account brought forward (1,296,961,395) (1,698,853,197)Debit balance in profit and loss account carried over (952,184,208) (1,296,961,395)to the balance sheetEarnings per share (par value: Rs. 10 each) 18 (3)- Basic earnings per share 1.52 2.14- Diluted earnings per share 1.49 2.13Significant accounting policies 1Notes to the accounts 18The schedules referred to above form an integral part of the profit and loss account.As per our report attachedfor BSR & Co. for SKOL Breweries LimitedChartered AccountantsZubin Shekary Jean-Marc Delpon de Vaux Jonathan Andrew KirbyPartner Managing Director DirectorMembership No. 48814 Kevin Heydenrych Pramod S M Chief Finance Officer Company SecretaryBangalore Bangalore23 June 2008 23 June 2008 22 SKOL Breweries Limited 23
  • 25. Schedules to the financial statements1. Significant accounting policies management to make estimates and Advances paid towards the assumptions that affect the reported acquisition or construction of fixed amounts of assets and liabilities and assets outstanding at the balanceBackground the disclosure of contingent liabilities sheet date and the cost of the fixedSKOL Breweries Limited (“the Company” on the date of the financial assets not ready for their intendedor “SKOL”) was incorporated as a public statements and the results of use before such date, are disclosedlimited company under the Companies operations during the reporting as capital work-in-progress.Act, 1956 on 18 November 1988. The period end. Actual results could The Company considers containersCompany is primarily engaged in the differ from those estimates. Any procured as fixed assets due to itsbusiness of brewing, packaging, revision to accounting estimates is substantive nature of arrangement,distribution, marketing and sale of beer. recognised prospectively in current that the Company sells beer and not and future periods.1.1 Basis of preparation the accompanying container and 1.4 Revenue recognition empty containers are essentially The financial statements have been returnable. prepared and presented under the Revenue is recognised to the extent historical cost convention on the that it is probable that the economic Accordingly, new containers accrual basis of accounting. The benefits will flow to the Company purchased are capitalised as fixed financial statements have been and the revenue can be measured assets and the obligation arising on prepared to comply in all material reliably. sale, for these returnable containers respects with the mandatory are disclosed separately in the (i) Sale of goods Accounting Standards (‘AS’) balance sheet as liability for prescribed by Companies Revenue from sale of goods is returnable containers. (Accounting Standards) Rules, 2006 recognised on transfer of all the 1.6 Depreciation and the relevant provisions of the significant risks and rewards of Companies Act, 1956, to the extent ownership to the buyer which Depreciation on fixed assets is applicable. These financial normally takes place on despatch. provided on the straight-line method statements are prepared and The amount recognised as sale is as per the rates and in the manner presented in Indian Rupees. net of sales tax and sales returns. prescribed in Schedule XIV to the Sales are presented both gross and Companies Act, 1956. The rates of1.2 Going concern net of excise duty. depreciation prescribed in Schedule These financial statements have XIV to the Companies Act, 1956 are (ii) Income from services been prepared on a going concern considered as minimum rates. basis, notwithstanding accumulated Income from marketing operations However, where the management’s losses, due to the following is recognised when the services are estimate of the useful life of a fixed considerations: rendered in accordance with the asset at the time of acquisition of arrangements with tie up units. the asset or of the remaining useful - Expected steady future growth life on a subsequent review is reflected in financial projections (iii) Interest shorter than that envisaged in the prepared by the management; aforesaid schedule, depreciation is Interest is recognised using the time - Expected continual technical and proportion basis taking into account provided at a higher rate based on financial support by the the amount outstanding and the the management’s estimate of useful SABMiller group. In the current interest rate applicable. life/ remaining useful life. year 33,267,857 equity shares Leasehold land is amortised over the 1.5 Fixed assets of Rs 10 each were allotted at a lease term. Leasehold premium of Rs 46 per share, Fixed assets are carried at cost of improvements are amortised over resulting in increase in share acquisition or construction less the lease term or its estimated capital by Rs 1,863,999,992. accumulated depreciation and useful life of five years, whichever is provision for impairment of assets. lower. These financial statements, The cost of fixed assets includes therefore, do not include any freight, duties, taxes and other adjustments relating to incidental expenses related to the recoverability and classification of acquisition or construction of the asset amounts or to amounts and respective assets. Borrowing costs classification of liabilities that may be directly attributable to acquisition or necessary if the Company was construction of those fixed assets unable to continue as a going which necessarily take a substantial concern. period of time to get ready for their1.3 Use of estimates intended use are capitalised to the extent they relate to the period till The preparation of financial such assets are ready to be put to statements in conformity with use. Intangible assets are recorded generally accepted accounting at their acquisition cost. principles in India requires
  • 26. Pursuant to this policy the following fixed assets are depreciated to their residualvalue over their estimated useful life: Class of assets Years Returnable containers (included in plant and machinery) 2 Wooden pallets (included under plant and machinery) 3 Computer equipments 4 Furniture, fittings and office equipments 6 Brands 20 Computer software 3 Pro-rated depreciation is provided asset, less its residual value (if any), on all assets purchased or sold over its remaining useful life. during the year. Assets, costing individually Rs 5,000 or less, other If at the balance sheet date there is than returnable containers, are an indication that if a previously depreciated in full in the year of assessed impairment loss no longer purchase. exists, the recoverable amount is reassessed and the asset is The useful lives of brands, which reflected at the recoverable amount primarily represent brand licenses subject to a maximum of purchased, have been determined depreciable historical cost. An based on management’s impairment loss is reversed only to assessment of market conditions in the extent that the carrying amount India, intent to use and ability to of asset does not exceed the net maintain these assets, previous book value that would have been history of these brands and determined; if no impairment loss internationally accepted practices. had been recognised.1.7 Impairment 1.8 Borrowing costs The Company periodically assesses Borrowing costs directly attributable whether there is any indication that to acquisition or construction of an asset or a group of assets those fixed assets, which necessarily comprising a cash generating unit take a substantial period of time to may be impaired. If any such get ready for their intended use, are indication exists, the Company capitalised. Other borrowing costs estimates the recoverable amount of are accounted as an expense. the asset. For an asset or group of assets that does not generate 1.9 Investments largely independent cash inflows, the Long-term investments are carried recoverable amount is determined at cost less any other-than- for the cash-generating unit to which temporary diminution in the value, as the asset belongs. If such determined by management on recoverable amount of the asset or commercial consideration the recoverable amount of the cash determined separately for each generating unit to which the asset individual investment. belongs is less than its carrying amount, the carrying amount is 1.10 Inventories reduced to its recoverable amount. Inventories are valued at lower of The reduction is treated as an cost and net realisable value. Cost impairment loss and is recognised in of inventories comprises purchase the profit and loss account. The price, costs of conversion and other recoverable amount is higher of the costs incurred in bringing the assets, net selling price and value in inventories to their present location use. and condition. After recognition of impairment loss, The methods of determination of depreciation is provided on the cost of various categories of revised carrying amount of the inventories are as follows: 24 SKOL Breweries Limited 25
  • 27. Raw materials, packing materials The exchange difference on the accordance with the transitional and stores and spares – First-in- forward exchange contract entered provision in AS 15 - Employee first-out (FIFO) method into to hedge the foreign currency benefits (Revised 2005), risk of the underlying outstanding at Rs 13,670,268 (net of deferred tax Work-in-progress and finished the balance sheet date, is calculated asset of Rs 7,039,122) has been goods – FIFO method. Production as the difference between the foreign adjusted to the general reserve. overheads are allocated on the basis currency amount of the contract This change did not result in a of normal capacity of production translated at the exchange rate at material impact on the profit for the facilities. the reporting date, or the settlement current year. Maintenance spares, which are in date where the transaction is settled 1.13 Leases regular use and are not an integral during the reporting period, and the part of any fixed asset, are treated corresponding foreign currency Leases where the lessor effectively as inventory and valued at cost. amount translated at the later of the retains substantially all the risks and date of inception of the forward rewards of ownership of the leased The comparison of cost and net exchange contract and the last asset, are classified as operating realisable value is made on an item- reporting date. Such exchange leases. Operating lease payments by-item basis. The net realisable differences are recognised in the are recognised as an expense in the value of work-in-progress is profit and loss account in the profit and loss account on a determined with reference to the reporting period in which the straight-line basis over the lease selling prices of related finished exchange rates change. term. goods in the ordinary course of business, less estimated cost of In accordance with the ICAI completion and estimated costs announcement – Accounting for necessary to make the sale. Raw derivatives, the Company provides materials, packing materials and for losses in respect of all other supplies held for use in outstanding derivative contracts at production of inventories are not the balance sheet date by marking written below cost except in cases them to market. where material prices have declined, 1.12 Retirement benefits and it is estimated that the cost of the finished products will exceed (i) Contributions to provident funds, their net realisable value. which is a defined contribution scheme, are charged to the profit1.11 Foreign exchange and loss account on an accrual Foreign exchange transactions are basis. recorded at the rates of exchange (ii) The Company has an arrangement prevailing on the dates of the with Life Insurance Corporation of respective transactions. Exchange India to administer its differences arising on foreign superannuation scheme, which is a exchange transactions settled defined contribution scheme. The during the year are recognised in the contributions to the said scheme are profit and loss account for the year. charged to the profit and loss Monetary assets and liabilities account on an accrual basis. denominated in foreign currencies as (iii) Liability for gratuity, which is a at the balance sheet date are defined benefit schemes is provided translated at the closing exchange for based on an actuarial valuation rate on that date; the resultant carried out by an independent exchange differences are recognised actuary as at the balance sheet date. in the profit and loss account. Actuarial gains/ losses are Forward contracts are entered into recognised immediately in the profit to hedge the foreign currency risk of and loss account and are not the underlying outstanding at the deferred. balance sheet date. The premium or (iv) Long term compensated absences discount on all such contracts are provided for based on actuarial arising at the inception of each valuation. contract is amortised as income or expense over the life of the contract. In the current year due to adoption Any profit or loss arising on the of the AS 15 - Employee benefits cancellation or renewal of forward (Revised 2005), the Company has contracts is recognised as income provided for long term or as expense for the period. compensated absences based on actuarial valuation. Further in
  • 28. Schedules to the financial statements1.14 Provisions and contingent The Company offsets, the current outstanding shares). In computing liabilities (on a year on year basis) and the dilutive earnings per share, only deferred tax assets and liabilities, potential equity shares that are The Company recognises a where it has a legally enforceable dilutive and that either reduces the provision when there is a present right and where it intends to settle earnings per share or increases loss obligation as a result of an obligating such assets and liabilities on a net per share are included. event that probably requires outflow basis. of resources and a reliable estimate 1.17 Employee stock compensation can be made of the amount of the Minimum Alternative Tax (“MAT”) cost obligation. A disclosure of a credit is recognised as an asset only The Company applies intrinsic value contingent liability is made when when and to the extent there is method of accounting for stock there is a possible obligation or a convincing evidence that the options granted by the ultimate present obligation that may, but Company will pay normal income tax holding company to the employees probably will not, require an outflow during the specified period. In the of the Company after 1 April 2005. of resources. When there is a year in which the MAT credit The intrinsic value of the employee possible obligation or a present becomes eligible to be recognised services received in exchange for the obligation that the likelihood of as an asset in accordance with the grant of such options is recognised outflow of resources is remote, no recommendations contained in the as an expense. The amount provision or disclosure is made. guidance note issued by ICAI, the recognised is spread over the said asset is created by way of a Provisions for onerous contracts, vesting period which is also the credit to the profit and loss account. i.e. contracts where the expected period over which some of the The Company reviews the same at unavoidable costs of meeting the scheme performance criteria relate. each balance sheet date and writes obligations under the contract At each balance sheet date, the down the carrying amount of MAT exceed the economic benefits estimates of the number of options credit entitlement to the extent there expected to be received under it, are that are expected to become is no longer convincing evidence to recognised when it is probable that excercisable are revised. It the effect that Company will pay an outflow of resources embodying recognises the impact of the revision normal income tax during the economic benefits will be required to of the original estimates, if any, in the specified period. settle a present obligation as a result profit and loss account over the of an obligating event, based on a The Company provides for and remaining vesting period. The effect reliable estimate of such obligation. discloses the Fringe Benefit Tax of uncertainty as to whether any (“FBT”) in accordance with the performance criteria of share1.15 Taxation provisions of Section 115 WC of the options will be met is dealt with by Income tax expense comprises Income-tax Act, 1961 and the estimating the probability of shares current tax (i.e. amount of tax for the guidance note on FBT issued by vesting and therefore the cost is year determined in accordance with ICAI. adjusted and readjusted for the the income tax law) and deferred tax probability of vesting in the vesting charge or credit (reflecting the tax 1.16 Earnings per share period. effects of timing differences between The basic earnings per share is accounting income and taxable computed by dividing the net profit income for the year). The deferred or loss attributable to equity tax charge or credit and the shareholders for the year by the corresponding deferred tax liabilities weighted average number of equity or assets are recognised using the shares outstanding during the year. tax rates that have been enacted or The number of equity shares used in substantively enacted by the balance computing diluted earnings per share sheet date. Deferred tax assets are comprises the weighted average recognised only to the extent there shares considered for deriving basic is reasonable certainty that the earnings per share, and also the assets can be realised in future; weighted average number of equity however, where there is unabsorbed shares, which would have been depreciation or carried forward issued on conversion of all business loss under taxation laws, potentially dilutive equity shares. deferred tax assets are recognised Potential dilutive equity shares are only if there is a virtual certainty of deemed converted as of the realisation of such assets. beginning of the year, unless they have been issued at a later date. Deferred tax assets are reviewed as The potentially dilutive equity shares at each balance sheet date and have been adjusted for the proceeds written down or written up to reflect receivable had the shares been the amount that is reasonably/ actually issued at a fair value (i.e. the virtually certain (as the case may be) average market value of the to be realised. 26 SKOL Breweries Limited 27
  • 29. Schedules to the financial statements (Rs.)2. Share capital As at As at 31 March 2008 31 March 2007Authorised250,000,000 (previous year: 200,000,000) equity shares of Rs. 10 each 2,500,000,000 2,000,000,000 2,500,000,000 2,000,000,000Issued, subscribed and paid up231,183,745 (previous year: 197,915,888) equity shares of Rs. 10 each fully paid-up 2,311,837,450 1,979,158,880 2,311,837,450 1,979,158,880Of the above :1) 142,041,561 (previous year: 142,041,561) equity shares of Rs. 10 each are held by SABMiller Breweries Private Limited(formerly Foster’s India Private Limited), the holding company. 87,341,038 (previous year: 54,073,181) equity shares of Rs. 10each are held by SABMiller Asia B.V. SABMiller Plc is the ultimate holding company.2) Pursuant to a scheme of arrangement 34,636,335 (previous year: 34,636,335) equity shares of Rs. 10 each were allotted, inearlier years, for consideration other than in cash. (Rs.)3. Reserves and surplus As at As at 31 March 2008 31 March 2007Capital reserve 2,000,000 2,000,000Securities premiumAt the beginning of the year 4,608,316,326 3,500,620,686Addition during the year 1,530,321,422 1,107,695,640 6,138,637,748 4,608,316,326General reserveAt the beginning of the year 1,232,069,584 1,232,069,584Less: Adjustment for employee benefit provision (net of tax of Rs. 7,039,122) (13,670,268) -(Refer to note 1.12)Less: Debit balance in profit and loss account (952,184,208) (1,232,069,584) 266,215,108 - 6,406,852,856 4,610,316,326 (Rs.)4. Unsecured loans As at As at 31 March 2008 31 March 2007Bank overdraft 263,732,853 -Short term loansFrom banks 2,650,010,288 3,115,000,000From others - 700,000,000Other loans and advancesFrom banks [Refer note (a) below] 442,092,599 624,887,850From others: - loan from holding company [Refer note (b) below] 385,269,911 179,444,262 - deferred sales tax loan 33,316,355 33,316,355 3,774,422,006 4,652,648,467Notes:a) Amount repayable within a period of 12 months Rs. 207,625,175 (previous year: Rs. 264,545,950).b) Tenure and terms for repayment have not been specified for loans obtained from holding Company.
  • 30. 5. Fixed assets Provision Gross Block Accumulated Depreciation Net block for impairment Description As at As at As at As at as at 31 As at As at 1 April 2007 Additions Deletions 31 March 2008 1 April 2007 Charge Deletions March 2008 31 March 2008 31 March 2008 31 March 2007 (refer note 2 below) Tangible assets Freehold land 147,517,616 46,185,015 10,805,695 182,896,936 - - - - 16,600,000 166,296,936 130,917,616 Leasehold land 15,831,621 - - 15,831,621 3,536,169 1,015,095 - 4,551,264 - 11,280,357 12,295,452 Leasehold improvements - 9,698,369 - 9,698,369 - 488,904 - 488,904 - 9,209,465 - Buildings 783,707,471 443,976,590 36,896,827 1,190,787,234 115,374,408 55,231,991 23,630,357 146,976,042 8,466,565 1,035,344,627 646,600,028 Plant and machinery - Returnable containers (Refer note 1 below) 1,063,171,463 884,245,631 436,707,701 1,510,709,393 234,012,381 273,183,404 190,154,360 317,041,425 - 1,193,667,968 829,159,082 - Others 3,160,530,313 1,394,037,647 146,774,326 4,407,793,634 862,546,465 313,851,063 91,947,826 1,084,449,702 129,592,485 3,193,751,447 2,283,792,985 Computer equipment 62,379,167 18,691,706 2,079,814 78,991,059 45,425,841 16,288,010 1,974,094 59,739,757 841,707 18,409,595 16,953,326 Furniture, fittings and office equipment 54,196,861 8,153,255 - 62,350,116 26,513,938 8,127,195 - 34,641,133 804,358 26,904,625 27,682,923 Motor vehicles 34,253,617 - 1,952,750 32,300,867 8,899,376 3,006,371 590,385 11,315,362 258,556 20,726,949 25,354,241 Intangible assets Brands 3,410,920,245 - - 3,410,920,245 206,091,438 170,546,012 - 376,637,450 - 3,034,282,795 3,204,828,807 Computer software 62,958,129 8,358,476 - 71,316,605 22,750,620 16,351,998 - 39,102,618 - 32,213,987 40,207,509 Total Total 8,795,466,503 2,813,346,689 635,217,113 10,973,596,079 1,525,150,636 858,090,043 308,297,022 2,074,943,657 156,563,671 8,742,088,751 7,217,791,969 Previous year 6,143,511,506 3,020,533,559 368,578,562 8,795,466,503 1,056,802,634 625,247,195 156,899,193 1,525,150,636 52,523,898 7,217,791,969 Note 1: Deletions to gross block include Rs 246,432,320 (previous year: Rs 189,386,897) representing normative cost, which has been adjusted with container liability. Loss on deletion in excess of normative cost has been included in cost of returnable containers in the profit and loss account. Note 2: Provision for impairment (Also refer note 14 of Schedule 18): (Rs.) Provision for impairment Description As at 1 April 2007 Charge Charge / (reversal) Deletion As at 31 March 2008 Freehold land 16,600,000 - - 16,600,000 Buildings 21,733,035 - 13,266,470 8,466,565 Plant and machinery - others 14,190,863 115,401,622 - 129,592,485 Computer equipment - 841,707 - 841,707 Furniture, fittings and office equipment - 804,358 - 804,358 Motor vehicles - 258,556 - 258,556 Total otal 52,523,898 117,306,243 13,266,470 156,563,671 Previous year 154,186,325 (101,662,427) - 52,523,898SKOL Breweries Limited2928
  • 31. (Rs.)6. Investments As at As at 31 March 2008 31 March 2007Long term investments1. Non trade - unquoted(i) Government and trust securities National Savings Certificates 2,019,500 2,151,500 Indira Vikas Patra 26,550 26,550 2,046,050 2,178,050(ii) Fully paid equity shares1 (previous year: Nil) fully paid equity shares of Rs. 10 each of MBL (AP) Breweries Limited 1 -12,000 (previous year: Nil) fully paid equity shares of Rs. 10 each of Shushruta Medical Aid 12,000 -and Research Hospitals Limited5,000 (previous year: Nil) fully paid equity shares of Rs. 10 each of Maini Granites Limited 5,000 -300 (previous year: Nil) fully paid equity shares of Rs. 10 each in AP Heavy Machinery & 300 -Engineering Limited10,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Ramanashree 10,000 -Comforts Limited10,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Anusha 10,000 -International Limited1,700 (previous year: Nil) fully paid equity shares of Rs. 100 each in Maa Communication 1,700 -Bozel Limited7,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Sachdev 7,000 -International Limited12,500 (previous year: Nil) fully paid equity shares of Rs. 10 each in Scarlet Flowers 12,500 -and Agritech Limited100 (previous year: Nil) fully paid equity shares of Rs. 10 each in Indana Spices 100 -and Food India Limited80,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Vulcan Leasing 80,000 -and Investments Limited5,005 (previous year: 5,005) fully paid equity shares of Rs. 100 each in 500,500 500,500Janata Sahakari Bank Limited295 (previous year: 295) fully paid equity shares of Rs. 100 each in Haryana State 29,500 29,500Cooperative Bank Limited 668,601 530,0002. Non trade - quotedFully paid equity shares15,000 (previous year: Nil) fully paid equity shares of Rs. 1 each in ITC Limited 2,619,750 -400 (previous year: Nil) fully paid equity shares of Rs. 10 each in Ultratech Cement Limited 400,060 -80 (previous year: Nil) fully paid equity shares of Rs. 10 each in Tata Motors Limited 56,944 -15,000 (previous year: Nil) fully paid equity shares of Rs. 2 each in Gujarat Ambuja 2,115,000 -Cement Limited500 (previous year: Nil) fully paid equity shares of Rs. 2 each in Larsen & Toubro Limited 2,598,850 -700 (previous year: Nil) fully paid equity shares of Rs. 2 each in Satyam Computers Limited 633,500 -50,000 (previous year: Nil) fully paid equity shares of Rs. 10 each in Super Star 50,000 -Distilleries Limited8,600 (previous year: 8,600) fully paid equity shares of Rs. 10 each in 700,470 -Syndicate Bank Limited 9,174,574 -Total long term investment term 11,889,225 2,708,050Less: Provision for, other than temporary, diminution in the value of investments (530,000) (530,000) 11,359,225 2,178,050The aggregate book value and market value of quoted investments and book value of unquoted investments are as follows:Quoted investment Aggregate book value 9,174,574 - Aggregate market value 7,775,281 -Aggregate book value of unquoted investments 2,184,651 2,178,050
  • 32. Schedules to the financial statements (Rs.)7. Inventories As at As at 31 March 2008 31 March 2007Raw materials and packing materials 424,926,983 337,185,005Stores and spares 61,739,226 52,980,580Work-in-progress 124,986,877 99,559,379Finished goods 560,769,112 272,181,012Goods in transit - finished goods 3,372,180 9,755,154Traded goods 7,688,487 2,858,364 1,183,482,865 774,519,494 (Rs.)8. Sundry debtors As at As at 31 March 2008 31 March 2007UnsecuredDebts outstanding for a period exceeding six months - considered good 30,028,871 24,356,971 - considered doubtful 210,674,357 251,018,532 240,703,228 275,375,503Other debts - considered good 2,506,190,512 1,460,225,259 - considered doubtful 88,980,586 31,803,092 2,835,874,326 1,767,403,854Less: Provision for doubtful debts (299,654,943) (282,821,624) 2,536,219,383 1,484,582,230 (Rs.)9. Cash and bank balances As at As at 31 March 2008 31 March 2007Cash on hand 666,437 716,440Cheques in hand 41,338,772 12,177,795Balances with scheduled banks - in current accounts 256,264,031 3,369,335,296 - in deposit accounts (Refer note below) 11,864,657 663,375,409 - in unclaimed dividend accounts 1,117,210 1,857,915 311,251,107 4,047,462,855Note:Balance in deposit account include Rs. Nil (previous year: Rs. 651,824,262) held in an escrow account pursuant to a sharepurchase agreement and Rs. 11,864,657 (previous year: Rs. 11,551,147) in margin money account. 30 SKOL Breweries Limited 31
  • 33. Schedules to the financial statements (Rs.)10. Loans and advances As at As at 31 March 2008 31 March 2007UnsecuredConsidered goodAdvances recoverable in cash or in kind or for value to be received 537,839,857 629,683,132Inter-corporate deposits [Refer note (b) below] - 117,947,601Other deposits 172,613,021 98,352,285Advance fringe benefit tax (net of provision) 1,264,449 3,163,673Advance tax and tax deducted at source (net of provision for income-tax) 135,499,862 80,469,118Balances with excise authorities 393,797,080 182,569,025Interest accrued but not due 1,928,313 1,860,449 1,242,942,582 1,114,045,283Considered doubtfulAdvances recoverable in cash or in kind or for value to be received 170,218,956 78,697,798Less: Provision for doubtful advances (170,218,956) (78,697,798) 1,242,942,582 1,114,045,283Notes:(a) Dues from companies under the same management outstanding as at the balance sheet date:MBL Investments Limited - 110,785,131SABMiller India Limited - 7,162,470Maximum amount outstanding during the year:MBL Investments Limited 128,785,130 1,285,871,421SABMiller India Limited 9,560,863 7,162,470(b) Terms for repayment, utilisation and tenure are not specified for inter-corporate deposits. (Rs.)11. Current liabilities As at As at 31 March 2008 31 March 2007Acceptances 19,956,173 75,794,196Sundry creditors - micro and small enterpises 34,630,832 22,730,751 - others 710,036,322 841,449,692Payable to group companies 1,008,195,088 592,392,333Deposits from customers and del credre 81,907,134 69,767,947Book overdraft - 299,863Interest accrued but not due 11,167,966 23,225,241Liability for returnable containers 601,678,875 452,728,876Accrual for schemes 302,293,444 293,875,492Excise duty payable 290,387,687 140,906,636Other current liabilities 996,760,204 872,083,122Investor education and protection fund shall be credited by the following amounts when due: - Unclaimed dividend 1,117,210 1,857,915 - Unclaimed matured public deposit 30,000 30,000 4,058,160,935 3,387,142,064 (Rs.)12. Provisions As at As at 31 March 2008 31 March 2007Provision for other retirement benefits 48,395,186 36,231,793Provision for gratuity 44,489,785 33,649,994Provision for income-tax (net of advance tax and tax deducted at source) 96,752,121 96,752,121Provision for claims (Refer to note 8 to Schedule 18) 171,556,592 260,118,088 361,193,684 426,751,996
  • 34. (Rs.)13. Other income For the year ended For the year ended 31 March 2008 31 March 2007Sale of spent malt and scrap 107,032,547 68,652,855Interest - inter-corporate deposit [tax deducted at source Rs. 836,719 3,692,493 76,980,042 (previous year: Rs. 17,274,321)] - fixed deposit [tax deducted at source Rs. 10,294,726 48,743,316 7,082,208 (previous year: Rs. 1,412,752)]Profit on sale of fixed assets, net 111,962,935 -Foreign exchange gain, net - 482,590Miscellaneous income 10,335,923 25,991,029 281,767,214 179,188,724 (Rs.)14. Material cost of sales For the year ended For the year ended 31 March 2008 31 March 2007Cost of traded goods sold 129,050,240 54,968,572Raw materials and packing materials consumed 2,902,518,808 2,049,716,722Malt processing charges 172,798,620 163,061,821Opening stockWork-in-progress 99,559,379 73,454,460Finished goods 281,936,166 216,594,652 381,495,545 290,049,112Less: Excise duty on opening stock 140,906,636 120,095,328 (A) 240,588,909 169,953,784Closing stockWork-in-progress 124,986,877 99,559,379Finished goods 564,141,292 281,936,166 689,128,169 381,495,545Less: Excise duty on closing stock 304,023,888 140,906,636 (B) 385,104,281 240,588,909(Increase) in work-in-progress and finished goods (A-B) (144,515,372) (70,635,125) 3,059,852,296 2,197,111,990 (Rs.)15. Personnel costs For the year ended For the year ended 31 March 2008 31 March 2007Salaries, wages and bonus 729,129,579 530,219,354Contributions to provident and other funds 27,672,075 24,512,076Gratuity expense 10,839,791 (368,972)Other retirement benefits 1,625,400 13,532,254Workmen and staff welfare 35,661,451 35,387,869 804,928,296 603,282,581 32 SKOL Breweries Limited 33
  • 35. (Rs.)16. Other expenses For the year ended For the year ended 31 March 2008 31 March 2007Cost of returnable containers 1,652,361,344 1,321,272,433Sales scheme expenses 399,092,351 295,341,245Freight outward 641,104,558 478,639,388Power and fuel 594,402,878 511,425,819Advertisement and publicity 579,909,782 494,186,897License fees 409,179,310 317,551,028Rates and taxes 220,206,608 179,916,536Legal and professional fees 132,552,686 88,661,721Clearing and forwarding 187,930,192 167,139,691Travel 97,313,383 82,708,264Consumption of stores and spares 102,150,451 78,409,579Rent 75,261,801 31,655,513Repairs and maintenance - buildings 12,283,695 4,787,995 - plant and machinery 24,739,869 20,486,550 - others 25,023,663 6,328,192Telephone and other communication 31,940,020 25,257,507Training and development 21,112,274 23,304,872Insurance 24,455,559 18,781,313Provision for doubtful debts 16,833,319 14,063,536Bad debts written off 14,296,898 13,321,823Printing and stationery 11,613,540 10,115,826Provision for doubtful loans and advances 91,521,158 7,553,477Doubtful advances written off 8,322,007 -Provision for claims, net (88,561,496) 7,465,500Bank charges 5,348,994 5,847,358Loss on sale of fixed assets/ assets discarded, net - 3,652,936Foreign exchange loss, net 49,754,609 -Miscellaneous expenses 129,705,355 140,197,366 5,469,854,808 4,348,072,365 (Rs.)17. Interest For the year ended For the year ended 31 March 2008 31 March 2007On long term loans 37,764,439 62,310,463On short term loans 111,094,489 218,907,190Others 17,297,303 32,148,661 166,156,231 313,366,314Less: Interest capitalised (17,989,690) - 148,166,541 313,366,314
  • 36. Schedules to the financial statements18 . Notes to the accounts1. Contingent liabilities and other commitments (Rs.) As at As at 31 March 2008 31 March 2007 Claims against the Company not acknowledged as debts in respect of: a) Sales tax matters 99,301,341 19,266,669 b) Excise matters 91,641,840 12,008,822 c) Other matters 32,379,016 32,379,016Other commitments d) Bank guarantees 16,414,057 11,423,917 e) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for 1,243,881,396 526,933,1872. Auditors’ remuneration, net of service tax (included under legal and professional fees) (Rs.) For the year ended For the year ended 31 March 2008 31 March 2007 Audit fees 8,300,000 8,300,000 Taxation matters 1,000,000 1,000,000 Other matters 1,750,000 - Reimbursement of expenses 466,327 467,2713. Earnings per share (Figures in Rs. except number of shares) For the year ended For the year ended 31 March 2008 31 March 2007 Profit for the year attributable to equity shareholders 344,777,187 401,891,802 Weighted average number of equity shares of Rs. 10 227,184,330 188,085,831 each used for calculation of basic earnings per share Adjustments for dilutive effect of share application money 3,999,415 380,211 Weighted average number of equity shares of Rs. 10 231,183,745 188,466,042 each used for calculation of diluted earnings per share Basic earnings per share 1.52 2.14 Diluted earnings per share 1.49 2.13 34 SKOL Breweries Limited 35
  • 37. Schedules to the financial statements18. Notes to the accounts4. Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 (quantitative information has been compiled from records and technical data in respect of each class of goods manufactured/ purchased by the Company): (a) Details of finished goods and turnover For the year ended For the year ended 31 March 2008 31 March 2007 Beer Quantity Amount Quantity Amount (in cases) (Rs.) (in cases) (Rs.)Opening stock 1,330,528 281,936,166 936,242 216,594,652Sales (gross of excise duty and discounts)* 47,428,745 17,120,144,115 39,022,719 13,384,952,487Closing stock 2,182,355 564,141,292 1,330,528 281,936,166* Includes 62,321 (previous year: 102,035) cases charged to consumption on account of breakages, damages and wastage. (b) Details of traded goods For the year ended For the year ended 31 March 2008 31 March 2007 Beer Quantity Amount Quantity Amount (in cases) (Rs.) (in cases) (Rs.)Opening stock 11,154 2,858,364 - -Purchases 837,335 133,880,363 412,834 57,826,936Sales (gross of excise duty and discounts)** 831,010 296,758,472 401,680 100,449,130Closing stock 17,479 7,688,487 11,154 2,858,364** Includes 65 (previous year: 46) cases towards breakages, damages and wastage. (c) Details of capacity and production (in cases) For the year ended For the year ended 31 March 2008 31 March 2007Licensed capacity 50,126,379 50,544,973Installed capacity* 50,007,210 47,358,393Actual production 48,280,572 39,417,005* Installed capacity is as certified by management and relied upon by the auditors being a technical matter. (d) Consumption of raw materials and packing materials For the year ended For the year ended 31 March 2008 31 March 2007 Units Quantity Amount (Rs.) Quantity Amount (Rs.)Malt (Note 1) MT 55,597 1,349,766,485 44,869 883,393,935Cartons Nos 43,940,130 263,950,089 35,189,509 214,282,721Cans Nos 53,451,141 348,979,529 35,294,669 235,326,858Others (Note 2) 1,112,621,324 879,775,029Total 3,075,317,427 2,212,778,543Note 1: Includes processing charges.Note 2: It is not practicable to furnish quantitative information in view of the large number of items which differ in size and nature, each being less than 10% in value of the total consumption.
  • 38. 18. Notes to the accounts (e) Consumption of imported and indigenous raw materials and packing materials For the year ended For the year ended 31 March 2008 31 March 2007 Amount Percentage Amount Percentage (Rs.) (Rs.) Imported 477,663,725 16 264,642,115 12 Indigenous 2,597,653,702 84 1,948,136,428 88 Total 3,075,317,427 100 2,212,778,543 100 (f) Consumption of imported and indigenous stores and spares For the year ended For the year ended 31 March 2008 31 March 2007 Amount Percentage Amount Percentage (Rs.) (Rs.) Imported 1,749,696 2 2,002,513 3 Indigenous 100,400,755 98 76,407,066 97 Total 102,150,451 100 78,409,579 1005. Value of imports on CIF basis imports (Rs.) For the year ended For the year ended 31 March 2008 31 March 2007 Raw materials and packing materials 447,980,124 220,932,703 Spare parts 1,367,463 1,463,646 Capital goods 128,484,910 18,639,095 577,832,497 241,035,4446. Gratuity plan The Company has a defined gratuity plan. Every employee who has completed 5 years or more of service, is eligible for gratuity on separation, worked out at 15 days salary (last drawn salary) for each completed year of service. The obligation under the scheme is partially funded by contributions being made to an insurance company. Profit and loss account Net employee benefit expense (recognised in personnel expenses) (Rs.) Particulars For the year ended For the year ended 31 March 2008 31 March 2007 Current service cost 6,028,085 5,981,296 Interest cost on benefit obligation 4,503,848 3,497,924 Expected return on plan assets (1,569,374) (1,530,691) Net actuarial loss/ (gain) recognised for the year 1,877,232 (8,317,501) Net benefit expense 10,839,791 (368,972) Actual return on plan assets 1,318,667 1,680,632 Balance Sheet Details of provisions for gratuity (Rs.) Particulars As at As at 31 March 2008 31 March 2007 Defined benefit obligations 62,980,939 51,632,939 Fair value of plan assets 18,491,154 17,982,945 Plan liabilities 44,489,785 33,649,994 36 SKOL Breweries Limited 37
  • 39. 18. Notes to the accountsChanges in the present value of the defined benefit obligation (Rs.)Particulars For the year ended For the year ended 31 March 2008 31 March 2007Opening defined benefit obligation 51,632,939 55,673,233Current service cost 6,028,085 5,981,296Interest cost 4,503,848 3,497,924Benefits paid (810,458) (5,351,954)Actuarial loss/ (gain) on obligation 1,626,525 (8,167,560)Closing defined benefit obligation 62,980,939 51,632,939Changes in the fair value of plan assets (Rs.)Particulars For the year ended For the year ended 31 March 2008 31 March 2007Opening fair value of plan assets 17,982,945 18,726,037Expected return on plan assets 1,569,374 1,530,691Actuarial gain/(loss) on plan assets (250,707) 149,941Contributions by employer - 2,928,230Benefits paid (810,458) (5,351,954)Closing fair value of plan assets 18,491,154 17,982,945The Company expects to contribute Rs. 10,000,000 in the qualifying insurance policy during 2008-09.Major categories of plan assets as a percentage of the fair value of total plan assetsParticulars As at As at 31 March 2008 31 March 2007Investments with the insurer 100% 100%Principal assumptions used in determining gratuity benefit obligations for the Company’s planParticulars As at As at 31 March 2008 31 March 2007Discount rate 7.60% 8.10%Expected rate of return on plan assets 7.50% 7.50%Salary increase 10% for Executives 10% for Executives 7% for Workers 7% for WorkersEmployee turnover 10% for Executives 10% for Executives 2% for Workers 2% for WorkersRetirement age 55 - 60 Years 55 – 60 YearsThe estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and otherrelevant factors such as supply and demand factors in the employment market.The overall expected rate of return on plan assets is determined based on the market prices prevailing on that date, applicable tothe period over which the obligation is to be settled.Amounts for the current and previous two periods (Rs.)Particulars As at As at As at 31 March 2008 31 March 2007 31 March 2006Defined benefit obligation 62,980,939 51,632,939 55,673,233Plan assets 18,491,154 17,982,945 18,726,037Surplus/(deficit) 44,489,785 33,649,994 36,947,196Experienced adjustments on plan liabilities (293,399) (904,245) -Experienced adjustments on plan assets (250,707) 149,941 (105,070)
  • 40. Schedules to the financial statements18. Notes to the accounts7. Segment reportingThe Company’s sole business segment is ‘Beer’ and the only geographical segment is ‘India’. Consequently, the requirement for aseparate disclosure as required under AS 17 – ‘Segment Reporting’ is not applicable.8. Provision for claimsThe provision for claims is utilised to settle previously anticipated and determined adverse outcomes of legal cases against theCompany. The provision is based on independent advice obtained by the Company from external legal counsel. The time frame ofutilization of the provision is determined by the course of the legal proceedings. (Rs.) 31 March 2008 31 March 2007Opening balance 260,118,088 262,046,509Add: Addition during the year - 7,465,500Less: Amounts used during the year - (9,393,921)Less: Unused amounts reversed during the year (88,561,496) -Closing balance 171,556,592 260,118,088Details of provisions reversed during the year are:(i) Franchisee fees The Orissa State Excise Department had raised a demand for franchisee fee pertaining to the brands owned by Shaw Wallace Breweries Limited (“SWBL”), and manufactured in East Coast Breweries and Distilleries Limited (“ECBDL”, now a unit of the Company). The Company had provided Rs. 54,845,466 against the said demand. During the current year, the honourable Supreme Court of India has ruled the case in favour of the Company. Consequently, the said provision, has been reversed.(ii) Labour related cases The Haryana State Government had imposed a prohibition on manufacture and sale of beer in the state of Haryana in 1996. Accordingly, Haryana Breweries Limited (“HBL”, now a unit of the Company) temporarily discontinued its operations and terminated services of employees. Subsequently, HBL re-commenced operations in 2001, after relaxation of rules by the State Government and hired services of new employees. The erstwhile employees of HBL were aggrieved of this decision and hence filed cases against the Company for reinstatement/ compensation. The Company had provided Rs. 33,716,030 against the said labour demands. During the current year, majority of the cases were settled in favour of the Company and the probability of adverse outcome in the rest of the cases has been assessed as remote. Hence, provision has been reversed. 38 SKOL Breweries Limited 39
  • 41. Schedules to the financial statements18. Notes to the accounts 9. Related parties (i) Names of related parties and description of relationship with the Company: Enterprises where control exists 1. Ultimate holding SABMiller plc company 2. Holding company SABMiller Asia & Africa BV (effective 30 March 2007). SABMiller Breweries Private Limited (formerly Foster’s India Private Limited) (effective 30 March 2007) SABMiller Asia B.V. (up to 30 March 2007) SABMiller India Limited (up to 30 March 2007) MBL Investments Limited (up to 30 March 2007) Names of other related parties with whom transactions have taken place during the year 1. Fellow MBL Property Developers Limited subsidiaries SABMiller Finance B.V. S.p.A. Birra Peroni SABMiller Breweries Private Limited (formerly Foster’s India Private Limited) (up to 30 March 2007) SABMiller Asia & Africa BV (up to 30 March 2007) MBL Investments Limited (from 30 March 2007 to 30 September 2007) SABMiller India Limited (effective 30 March 2007) SABMiller Asia B.V. (effective 30 March 2007) SABMiller Africa & Asia (Pty) Limited 2. Key managerial Richard Mark Rushton, Managing Director (up to 31 July 2006) personnel Jean-Marc Delpon de Vaux, Managing Director (effective 1 August 2006)(ii) Related party transactions (Rs.)Nature of transactions Holding / ultimate Fellow Key Total holding company subsidiaries managerial personnelIncome from marketing operations 83,191,895 - - 83,191,895 (-) (48,222,324) (-) (48,222,324)Interest income - 3,692,493 - 3,692,493 (73,823,431) (87,762) - (73,911,193)Purchase of traded goods and raw materials 41,910,792 110,443,152 - 152,353,944 (-) (5,339,795) (-) (5,339,795)License fees - 409,179,310 - 409,179,310 (-) (317,551,028) (-) (317,551,028)Interest expense 2,758,904 - - 2,758,904 (-) (16,767) (-) (16,767)Remuneration - - 22,434,668 22,434,668 (-) - (20,706,454) (20,706,454)Reimbursement of expenses incurred 76,072,145 217,094 - 76,289,240on behalf of the Company (1,111,255) (16,302,884) (-) (17,414,139)Reimbursement of expenses incurred 15,350,134 1,895,208 - 17,245,342on behalf of other companies (11,900,755) (9,056,742) (-) (20,957,497)Inter-corporate deposit given, net - - - - (7,094,402) (-) (-) (7,094,402)Inter-corporate deposit refunded, net - 117,947,601 - 117,947,601 (1,218,523,943) (-) (-) (1,218,523,943)
  • 42. 18. Notes to the accounts (Rs.)Nature of transactions Holding / ultimate Fellow Key Total holding company subsidiaries managerial personnelLoan repaid, net - - - - (503,185) (1,000,000) (-) (1,503,185)Loan taken, net 205,825,649 - - 205,825,649 (-) (220,000,000) (-) (220,000,000)Share application money received - - - - (-) (1,863,000,000) (-) (1,863,000,000)Proceeds from issue of shares - - - - (1,348,499,040) (-) (-) (1,348,499,040)Purchase of investments - 9,313,175 - 9,313,175 (-) (-) (-) (-)Sale of fixed assets 1,352,663 - - 1,352,663 (-) (-) (-) (-)Purchase of fixed assets - 738,310 - 738,310 (-) (-) (-) (-)(iii) Amount outstanding as at the balance sheet date: (Rs.)Nature of transactions Holding / ultimate Fellow Key Total holding company subsidiaries managerial personnelUnsecured loans 385,269,911 - - 385,269,911 (179,444,262) (-) (-) (179,444,262)Payable to group companies 12,953,750 995,241,338 - 1,008,195,088 (9,882,626) (582,509,707) (-) (592,392,333)Inter corporate deposit - - - - (-) (117,947,601) (-) (117,947,601)Advances recoverable in cash or in 1,001,003 8,521,725 - 9,522,728kind or for value to be received (-) (-) (-) (-)Figures in brackets represent previous year figures.(iv) Tenure and terms for repayment have not been specified for unsecured loan obtained from the holding Company. 40 SKOL Breweries Limited 41
  • 43. 18. Notes to the accounts10. Deferred tax assets/ (liabilities) (Rs.) As at As at 31 March 2008 31 March 2007Deferred tax assetsInvestments 180,147 178,398Debtors 94,153,813 87,573,603Loans and advances 51,127,403 19,824,999Provision for retirement benefits 31,571,602 23,522,210Provision for claims 52,349,240 63,189,810Others 7,681,544 37,050,862Unabsorbed depreciation 728,559,450 551,621,273Total 965,623,199 782,961,155Deferred tax liabilitiesFixed assets 1,029,367,235 782,961,155Total 1,029,367,235 782,961,155Deferred tax liabilities, net (63,744,036) -In view of the accumulated losses and in accordance with AS 22 – “Accounting for taxes on income”, deferred tax assets onunabsorbed depreciation and other temporary timing differences have been recognised only to the extent of those timingdifferences, the reversal of which will result in sufficient taxable income.The above deferred tax liability includes Rs. 7,039,122 of deferred tax credit recognised directly in general reserve, whichpertains to provision towards employee benefits recognised directly in general reserve, using the transitional provision of AS 15(Revised).11. Expenditure in foreign currency (accrual basis) (Rs.) For the year ended For the year ended 31 March 2008 31 March 2007Travel 8,672,944 6,441,321License fees 409,179,310 317,551,028Interest 29,531,653 45,744,418Professional and consultation fees 23,244,952 14,793,793Brand - 1,621,200,000Others 8,791,717 12,054,585 479,420,576 2,017,785,145
  • 44. Schedules to the financial statements18. Notes to the accounts12. Derivative instruments and un-hedged foreign currency exposureDerivative instrumentsParticulars Purpose As at 31 March 2008Forward contract Hedge against repayment of foreign currency loan JPY 113,010,836Currency swap contract Hedge against repayment of foreign currency loan JPY 260,000,000Currency swap contract Hedge against repayment of foreign currency loan USD 7,000,000Hedge transactions are those which are defined as such at the inception of the transaction. No periodic evaluation of re-designationof hedges is required to be carried out. Notwithstanding the above, all hedge transactions are translated at year end rates and theresulting gain or loss is recognised in the profit and loss account.Particulars of un-hedged foreign currency exposure as at the balance sheet dateUnderlying asset / liability As at March 2008 As at 31 March 2007 Foreign Amount Foreign Amount currency amount in Rs currency amount in RsBank balance USD 237,368 9,504,220 – – JPY 111,163,791 44,474,410 – –Sundry creditors USD 645,120 25,830,605 USD 36,016 1,553,729 EURO 950,423 54,009,069 – –Interest accrued but not due USD 266,437 10,668,131 – –Payable to group companies USD 5,409 216,587 USD 13,340 575,474 ZAR 2,635,493 12,953,750 ZAR 1,602,984 9,533,56913. Managerial remunerationThe details of remuneration paid to the managing director are as follows: (Rs.) For the year ended For the year ended 31 March 2008 31 March 2007Salary and allowance 13,231,671 11,277,721Perquisites 9,202,997 9,428,733 22,434,668 20,706,454Note: As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, theamount pertaining to managing director is not ascertainable and, therefore not included above.14. Provision for impairment of fixed assets The impairment loss amounting to Rs. 117,306,243 in the current year represents the write down of certain fixed assets to their recoverable amount. These fixed assets (excluding assets already impaired in the prior year) have been rendered as redundant / idle as a result of significant capacity expansion at certain breweries and have been identified as such based on the physical verification conducted by the management during the year. In the previous year, due to significant growth in the beer market and constraints in capacities, management revisited its decision to discontinue one of its brewery, which was impaired in earlier years. Accordingly, management had reassessed the recoverable value of the brewery which resulted in reversal of impairment loss amounting to Rs. 101,662,427 being the lower of recoverable value and the carrying amount of fixed assets determined (net of depreciation) had there been no impairment. 42 SKOL Breweries Limited 43
  • 45. Schedules to the financial statements18. Notes to the accounts15. Management has initiated the process of identifying enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2008 has been made in the financials statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the said Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act. (Rs.) 31 March 2008 31 March 2007 (i) The principal amount remaining unpaid to any supplier 34,095,709 22,387,599 as at the end of each accounting year; (ii) The amount of interest paid by the Company along Nil Nil 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 Nil Nil delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act; (iv) The amount of interest accrued and remaining 535,123 343,152 unpaid at the end of the year (v) The amount of further interest remaining due and payable 535,123 343,152 even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise.16. Operating leases The Company is obligated under non-cancellable operating leases for office premises which are renewable at the option of both the lessor and lessee. Total rental expense under non-cancellable operating leases entered on or after 1 April 2001 amounted to Rs. 8,260,160 (previous year: Rs. Nil) for the year ended 31 March 2008. Future minimum lease payments under non-cancellable operating leases are as follows: (Rs.) Period As at 31 March 2008 As at 31 March 2007 Not later than 1 year 16,336,414 - Later than 1 year and not later than 5 years 32,588,625 - Later than 5 years - - The Company is also obligated under cancellable lease for residential, vehicles and office premises, which are renewable at the option of both the lessor and lessee. Total rental expense under cancellable operating lease entered amounted to Rs. 67,001,641 (previous year: Rs. 31,655,513) for the year ended 31 March 2008.17. 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 2008, the Group had the following share-based payment arrangements for the employees of the Company.
  • 46. 18. Notes to the accounts Type of arrangement arrangement Executive Share Option Scheme [Approved and (No.2) Scheme] As at March 2008 As at March 2007 Date of grant 18 May 2007 19 May 2006 Number of shares granted 92,200 95,377 Method of settlement Equity Equity Contractual life 10 years 10 years Vesting period 3 years 3 years Vesting conditions Achievement of a target Achievement of a target growth in earnings per share growth in earnings per share Type of arrangement arrangement International Performance Share Award Sub-Scheme As at March 2008 As at March 2007 Date of grant 18 May 2007 - Number of shares granted 7,000 - Method of settlement Equity - Contractual life 10 years - Vesting period 3 years - Vesting conditions Achievement of a target - growth in earnings per share(ii) The details of the activity under Executive Share Option Scheme [Approved and (No.2) Scheme] are as follows: 31 March 2008 31 March 2007 Number of Weighted average Number of Weighted average Options exercise price (Rs) Options exercise price (Rs) Outstanding at the beginning of the year 125,677 801 73,000 643 Granted during the year 92,200 942 95,377 911 Lapsed during the year 3,950 794 - - Transferred during the year * 38,750 779 - - Outstanding at the end of the year 217,877 865 168,377 800 Exercisable at the end of the year - - - -* The options transferred represents options relating to employees transferred to other companies within the SABMiller Group during the year.The weighted average share price at the date of exercise for stock options exercised during the year was Rs. 961 (previous year:Rs. 881). The options outstanding as at 31 March 2008 had a weighted average remaining contractual life of 8.3 years (previousyear: 8.7 years). 44 SKOL Breweries Limited 45
  • 47. 18. Notes to the accountsThe details of the activity under International Performance Share Award Sub-Scheme are as follows: 31 March 2008 31 March 2007 Number Weighted Number Weighted of Options average of Options average exercise price exercise priceOutstanding at the beginning of the year - - - -Granted during the year 7,000 - - -Outstanding at the end of the year 7,000 - - -Exercisable at the end of the year - - - -The weighted average share price at the date of exercise for stock options exercised during the year was Rs. 961. The optionsoutstanding as at 31 March 2008 had a weighted average remaining contractual life of 9.3 years.(iii) The weighted average fair value of stock options granted during the year is Rs. 283 (previous year: Rs. 234). The estimate of fair value on the date of the grant was made using the Black-Scholes model with the following assumptions: For the year ended For the year ended 31 March 2008 31 March 2007Share price at the grant date Rs. 961 Rs. 881Exercise price at the grant date Rs. 942 Rs. 910Expected volatility 22.5% 22.5%Contractual life (vesting and exercise period) in years 10 years 10 yearsExpected dividends 2.11% 2.11%Average risk-free interest rate 4.48% 4.49%The expected volatility was determined based on historical volatility by assessing the historic share price data in the UnitedKingdom and South Africa since May 1999 and May 2001 respectively.(iv) Since the Company used the intrinsic value method the impact on the reported net profit and earnings per share by applying the fair value based method. The Guidance Note requires the Proforma disclosures of the impact of the fair value method of accounting of employee stock compensation accounting in the financial statements. Applying the fair value based method defined in the said Guidance Note, the impact on the reported net profit and earnings per share would be as follows: (Rs.) For the year ended For the year ended 31 March 2008 31 March 2007Net income as reported 344,777,187 401,891,802Add: Employee stock compensation under intrinsic value method - -Less: Employee stock compensation under fair value method 18,391,746 10,912,108Proforma net income 326,385,441 390,979,694Earnings per share as reported - Basic 1.52 2.14 - Diluted 1.49 2.13Proforma earnings per share - Basic 1.44 2.08 - Diluted 1.41 2.0718. The comparative figures have been regrouped/ reclassified, wherever necessary, to conform with the current year’spresentation.for SKOL Breweries LimitedJean-Marc Delpon de Vaux Jonathan Andrew KirbyManaging Director DirectorKevin Heydenrych Pramod S MChief Finance Officer Company SecretaryBangalore23 June 2008
  • 48. 46SKOL Breweries Limited 47
  • 49. Cash flow statement for the year ended 31 March 2008 (Rs.) For the year ended For the year ended 31 March 2008 31 March 2007Cash flows from operating activitiesProfit / (Loss) before tax 408,545,685 453,375,648Adjustments: Provision for impairment of fixed assets 117,306,243 (101,662,427) Depreciation 858,090,043 625,247,195 Interest expense 148,166,541 313,366,314 Interest income (52,435,809) (84,062,250) Loss/ (profit) on sale of fixed assets/ assets discarded (111,953,510) 17,028,530 Unrealised foreign exchange difference (36,484,812) -Operating cash flows before working capital changes 1,331,234,381 1,223,293,010 Increase in sundry debtors (1,051,637,153) (5,096,929) Increase in loans and advances (193,645,516) (321,708,500) Increase in inventories (408,963,371) (235,213,089) Increase in current liabilities and provisions 1,032,704,887 1,186,712,169Cash generated from operations 709,693,228 1,847,986,661 Taxes paid (46,116,860) (70,489,732)Net cash provided by operating activities a 663,576,368 1,777,496,929Cash flows from investing activities Purchase of fixed assets (3,724,094,832) (3,655,242,114) Proceeds from sale of fixed assets 179,174,811 5,263,942 Inter-corporate deposits, net 117,947,601 1,151,723,818 Interest received 52,367,945 83,612,459 Purchase of investments (9,181,175) -Net cash used in investing activities b (3,383,785,650) 3,383,785,650) (2,414,641,895)Cash flows from financing activities Proceeds from issue of shares - 1,348,499,040 Share application money received - 1,863,000,000 Proceeds from borrowings 20,529,309,506 15,127,038,959 Repayment of borrowings (21,386,584,822) (13,599,646,487) Interest paid (160,223,816) (311,185,951) Unclaimed dividend paid (740,705) (341,582)Net cash (used in)/ provided by financing activities c (1,018,239,837) 4,427,363,979Effect of exchange rate changes on cash and cash equivalents d 2,237,371 -Net increase in cash and cash equivalents a+b+c+d (3,736,211,748) 3,790,219,013Cash and cash equivalents at the beginning of the year 4,047,462,855 257,243,842Cash and cash equivalents at the end of the year 311,251,107 4,047,462,855Net increase in cash and cash equivalents* (3,736,211,748) 3,790,219,013*Balance in deposit account include Rs. Nil (previous year: Rs. 651,824,262) held in an escrow account pursuant to a sharepurchase agreement and Rs. 11,864,657 (previous year: Rs. 11,551,147) in margin money account.As per our report attachedfor BSR & Co. for SKOL Breweries LimitedChartered AccountantsZubin Shekary Jean-Marc Delpon de Vaux Jonathan Andrew KirbyPartner Managing Director DirectorMembership No. 48814 Kevin Heydenrych Pramod S M Chief Finance Officer Company SecretaryBangalore Bangalore23 June 2008 23 June 2008
  • 50. Additional information pursuant to Part IV of Schedule VI of the Companies Act, 1956. COMPANY’SBALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI Registration Details Registration No : 49687 State Code :11 Balance Sheet Date: 31-Mar-08II Capital Raised during the year (Amount In Rs Thousands) Public Issue Rights Issue Nil Nil Bonus Issue Private Placement Nil 186,300III Position of Mobilisation and Deployment of Funds (Amount In Rs Thousands) Total Liabilities Total Assets 8,257,520 8,257,520 Sources of Funds Paid - up Capital Reserves and Surplus 2,311,837 6,406,852 Secured Loans Unsecured Loans 0 3,774,422 Application of Funds Net Fixed Assets Investments 8,742,088 11,359 Net Current Assets Misc Expenditure 854,541 Nil Accumulated Losses NilIV Performance of the Company (Amount In Rs Thousands) Turnover Total Expenditure 10,584,976 10,458,198 Profit/(Loss) Before Tax Profit/ Loss After Tax 408,545 344,777 Earnings Per Share in Rs Dividend Rate % 1.52 0V Generic Names of Three Principal Products/ Services of the Company (as per monetary terms) Item code No [ITC Code] 220300 Product Description Beerfor SKOL Breweries LimitedJean-Marc Delpon de Vaux Jonathan Andrew KirbyManaging Director DirectorKevin Heydenrych Pramod S MChief Finance Officer Company SecretaryBangalore23 June 2008 48 SKOL Breweries Limited 49
  • 51. ○○○○○○○○○○ SKOL BREWERIES LIMITED○○ Regd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093○○○○○○○○○○ PROXY FORM○○ I/We○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ of○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ being a Member(s) of the above named Company hereby appoint○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ of○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ (or failing whom)○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ of○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ as my/our proxy to attend and vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at○○ M.C. Ghia Hall, Bhogilal Hargovindas Building, 2nd Floor, 18/20, K. Dubash Marg, behind Prince of Wales Museum, Kala Ghoda,○ Mumbai – 400 001 on Wednesday, the 10th September, 2008 at 3.00 p.m. and at any adjournment thereof.○○○ Signed this day of○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ Signed by the said○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○○ N.B.: This Proxy form must reach the Registered Office of the Company not less than 48○ hours before the time of holding the meeting.○○○ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Please cut along this line- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -○○ SKOL BREWERIES LIMITED○○ Regd. Office: No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093○○ ATTENDANCE SLIP○○○ Please complete this Attendance Slip and hand it over at the entrance of the Meeting Hall.○○ SKOL Breweries Limited○ No.1, Mahal Industrial Estate, Mahakali Road, Andheri (East), Mumbai-400 093○○○ I hereby record my presence at the Annual General Meeting of the Company to be held at M.C. Ghia Hall, Bhogilal○○ Hargovindas Building, 2nd Floor, 18/20, K. Dubash Marg, behind Prince of Wales Museum, Kala Ghoda, Mumbai – 400 001 on○ Wednesday, the 10th September, 2008 at 3.00 p.m.○○○ Member’s Name (in Block Capitals):○○○ Share Ledger Folio No. :○○○ DP ID No.○○ Client ID No.○○○ Member’s/Proxy’s Signature:○○○○○○○○○○○○○○○○○○○ 50○ SKOL Breweries Limited○ 51○
  • 52. SKOL Breweries Limited Tel +91(0)22 - 67103890-931, Mahal Industrial Estate, Fax +91(0)22 - 67103894Mahakali Caves Road,Andheri East, Mumbai - 400 093Maharashtra, India www.sabmiller.in SKOL Breweries Limited Annual Report 2008 Printed by Print House design: www.ysdesignstudio.com

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