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SABMiller India LimitedAnnual Report 2015 - 16

SABMiller AR 2015-16 B&W FINAL.indd 1 7/19/2016 6:31:59 PM

ContentsBoard of Directors 1

General Information 2

Our Brands 3

Sustainable Development Report 9

Managing Director’s Statement 11

Notice 12

Directors’ Report 18

Financial Statement - Standalone 38

Financial Statement - Consolidated 86

Letter on Green Initiative 125

Attendance Slip and Proxy Form 126


Ms. Shwetambari Rao Chandrakant Independent Director & Member of Audit Committee

Ms. Anna Jane Swaithes Director

Mr. Arun Monappa Independent Director & Member of Audit Committee

Mr. Philip James Vincent Director (From 15th September 2015) & Chairman of Audit Committee(From 25th November 2015)

Board of Directors

Mr. Shalabh SethManaging Director

Mr. Ari Mervis Chairman

Mr. Stephen Victor Shapiro Director

SABMiller India LimitedAnnual Report 2015-16

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Bran

Ds

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Haywards 5000 is the flagship brand and pride of SABMiller India Ltd. The brand is a symbol of strong resolve, inspiring millions across the country to take the next step in their journey of resolve. Haywards 5000 perfectly combines strength with high quality credentials providing the right balance of strength and control.

In October 2015 Haywards 5000 successfully launched a new higher priced variant named Haywards 5000 BOLD. This new brand is longer brewed than regular Mainstream beers and as a result has a full-bodied and flavorful taste. The consumer feedback on the product so far is very encouraging and the focus now is on increasing distribution and availability of Haywards 5000 BOLD.

Haywards 5000 has been strengthening the resolve of millions of people through the Haywards 5000 Hausla Buland Academy and also more recently through the entrepreneurship platform – Hauslay ki

Our BrandsManaging directOr’s stateMent

directOrs’ repOrtsustainaBle develOpMent repOrt

nOtice annual Financial stateMents


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Udaan. In April 2016 we launched the new #NaaSeHaanTak Hausla Buland through-the-line campaign which received a very positive response from consumers and we registered more than 42,000 incoming calls at our Hausla Buland Academy.

Knock Out was launched in 1984 and is the core Mainstream brand of SABMiller India in the high volume markets of Karnataka, Maharashtra, Telangana and Andhra Pradesh. In 2015 the brand underwent a significant re-positioning exercise around “strength of character” was rolled out in all key markets during the last quarter of this fiscal year.

Along with the repositioning, the brand also underwent a packaging design refresh with the new packaging being in sync with the new brand positioning and at the same time including premium cues. The new positioning and packaging design were introduced in the core markets and we are receiving a positive response from both consumers and the trade.


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Miller High Life is a timeless American brew that dates back all the way to 1903. Born out of the dreams and hard work of German Fredrick Miller who founded the Miller Brewing Company in Milwaukee in 1885 it continues to be brewed till today following always the highest quality standards.This classic American premium lager has a consistently crisp, smooth taste, 4.7% ABV and a refreshing even feel. Miller High Life has won numerous awards at beer festivals and cups around the globe and its perfectly balanced brew embodies the American spirit of working hard and partying harder. The authentic taste of Miller High Life is for those who like to live life to the fullest, whether professionally or socially. With a Miller you can always live the balance and find the space between easy-going and ambitious.

In late 2014 we launched Miller ACE, a premium strong beer variant of our famous Miller brand. Since its launch Miller ACE has been growing fast and riding on the recognition and affinity created by Miller High Life earlier. This new brand has been wholeheartedly appreciated by all stakeholders, the trade and most importantly by consumers.





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Peroni Nastro Azzurro is a globally renowned international super-premium beer from Italy and is appreciated by the elite in the world’s top cosmopolitan cities. It is Italy’s number one premium beer, a crisp and refreshing lager with an unmistakable character and a touch of Italian style. Its unique taste is refreshing and dry with a clean character and a clarity that is achieved through the use of Italian ingredients and a process that ensures the production of a superior Italian taste. Peroni won the Gold medal at the prestigious Monde Selection Awards in Belgium twice for being the best beer in the world.

Peroni Nastro Azzurro


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sustainable DevelopmentMAke BeeR A NAtuRAL ChoICe FOR MODERATE AND RESPONSIBLE DRINKERS

WAteR

India has the highest number of road accidents and fatalities in the world. As per the recent global status report on road safety 2014, 137572 people die on India roads every year.

Recognising this, your company embarked on an innovative programme: Respect The Road (RTR) that focused on creating awareness on road safety in general and promoting responsible drinking behaviour by providing alternates to drinking and driving, in particular.

Initially launched in Haryana 2011, the programme was widely appreciated and supported by the Gurgaon Traffic Police. The programme this year was expanded to Bengaluru. This was possible due to the support received from the Bengaluru Traffic Police and local NGO- Positive Stroke.

The programme was promoted through various engagement activities both on-ground and digital. Some of the key events includes the following:

For the 27th Road Safety Week, SABMiller India was •invited by the Bengaluru traffic police to spread the messages of road safety and responsible drinking through a stall. The initiative saw a footfall of over 30,000 visitors in two days.

Drunk driving is a serious threat to road safety and we want

to reach out to people sensitizing them towards the dangers

of indulging in this act. We advise people to call drivers and

hire cabs and not indulge in drunk driving. We are happy to

support the programme in spreading the message and are

hopeful of an encouraging response from the city dwellers.

-Dr. M. A. Saleem, Addl. Commissioner of Police-Traffic, Bengaluru City

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Managing water risk is crucial for us. At SABMiller India, we are investing to understand the shared water risk and manage it ahead of its impact on the business and value chains because if not managed, this stress can eventually impact livelihoods and growth possibilities within communities, impacting their and our chances to grow and prosper. The India water initiative reflects the company’s holistic approach to resource management, ranging from minimizing our own fresh water use year-on-year to stewardship efforts in the

As part of the RTR Initiative, your company put up a •special stall and Road Safety pledge wall to promote road safety at the Bengaluru Midnight Marathon. More than 15,000 people participated in the race. To promote the message of responsible drinking during •festive season (Christmas and New year) RTR organised India’s first Pub Crawl with a cause, where leading media and bloggers were invited.As part of the event, cabs were provided to all and each participant took a pledge of never mixing drinking with driving.RTR also hosted a Street play at a special drive organised •at Cyber Hub with the support of DLF, UBER and Gurgaon Traffic Police to encourage people to use alternatives to drinking and driving.

Impact - The programme has shown a promising result since its launch:

During the last year, RTR programme messages reached •to around 25 Million and engage with 0.5 Million people. This was possible through proactive digital engagement, amplification through radio, leveraging print and digital media and conducting regular on-ground activities with the support of all our programme partners. Registered cases of drinking and driving have reduced •substantially from 10,218 in 2013 to 3,933 in 2015 in Gurgaon- *Source : Gurgaon Police Home Safe-The Call a chauffeur partner has seen a 50% •jump in their services over the last two years.RTR has been able to create a strong digital footprint, •emerging as India’s biggest Programme on road safety on Facebook with high engagement scores and more than 34,000 likes


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Initially launched in Haryana in 2011, the programme was widely appreciated and supported by the Gurgaon Traffic Police. The programme this year was expanded to Bengaluru. This was possible due to the support received from the Bengaluru Traffic Police and local NGO- Positive Stroke.

• As part of the RTR Initiative, your company put up a special stall and Road Safety pledge wall to promote road safety at the Bengaluru Midnight Marathon. More than 15,000 people participated in the race.

• To promote the message of responsible drinking during festive season (Christmas and New year) RTR organised India’s first Pub Crawl with a cause, where leading media and bloggers were invited. As part of the event, cabs were provided to all and each participant took a pledge of never mixing drinking with driving.

• RTR also hosted a Street play at a special drive organised at Cyber Hub with the support of DLF, UBER and Gurgaon Traffic Police to encourage people to use alternatives to drinking and driving.

Impact - The programme has shown a promising result since its launch:• During the last year, RTR programme messages reached

to around 25 Million and engaged with 0.5 Million people. This was possible through proactive digital engagement, amplification through radio, leveraging print and digital media and conducting regular on-ground activities with the support of all our programme partners.

• Registered cases of drinking and driving have reduced substantially from 10,218 in 2013 to 3,933 in 2015 in Gurgaon- *Source : Gurgaon Police

• Home Safe-The Call a chauffeur partner has seen a 50% jump in their services over the last two years.

• RTR has been able to create a strong digital footprint, emerging as India’s biggest Programme on road safety on Facebook with high engagement scores and more than 34,000 likes

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watersheds. It showcases potential solutions and defines the roles stakeholders need to play in managing this shared risk.

Reducing our own usage of fresh water within our operations is the first step and we work very hard in this direction by introducing new processes and changing behaviour to reduce water consumption within our breweries, while achieving the same high quality of product. We set ourselves very stringent targets and make investments to adopt world class technologies, upgrade our recycling breweries and introduce behavioural changes in the way we use water. Equally defining are efforts beyond our operations, outside our fence lines.

Our efforts towards resource sustainability strive to evolve comprehensive frameworks for co-operative management of water through cost effective, collaborative, programmes that explore sustainable co-management of water resources and rural livelihoods and offer solutions that can be implemented by grassroots workers on the back of robust technical support and social engineering.

Maximizing in-house efficiencies, SABMiller India is setting and meeting stringent targets towards reducing its own fresh water consumption year-on-year. Compared to last year, this has helped us save approximately 10% water and since FY10; we have been able to reduce a total of 36% of our consumption till today.

Outsourced breweries

Our efforts till date at hired breweries have resulted in •around 45% reduction in their water consumption

Highlights of the external initiatives (2010-2015)Cost-effectively impacting over 18,000 farmers across a •target area of approx. 61,927 hectares surrounding our breweries in 123 villages across India. Total water saved due to improved agricultural practices vs. traditional on demonstration farms: 1,473,571 KL. (usage reduced by about 25.50% ) •Total water recharged through water structures •constructed in the target area: 6,22,528.KL. Economic benefits to the project farmers (vs. conventional •agriculture) Productivity increase: 18.93% •Income increase: 25.71%•

Results of India water journey are an outcome of operational controls, use of cutting edge technologies and leadership initiatives outside the fence.

SAANJhI uNNAtI MALT BARLEY DEvELOPMENT PROGRAMME

Saanjhi Unnati (Progress through Partnership) is a small farmer program that is conceived & operationalised to bring about cultivation of malt barley in India; establish barley supply chain directly from the farmers eliminating middlemen and market spread (of over 15%) thereby bringing about improvement in the lives and livelihoods of small and marginal farmers.

Saanjhi Unnati is operational since 2005-06. During 2015-16, 8,000 farmers were covered in five states buying 44,000 tons of barley. Team of 36 members was involved in disseminating improved package of practices and post-harvest technology and barley thus produced was purchased directly from farmers eliminating the middle men thus was instrumental in 45% higher yield over state average. Taking a leap forward SABMiller India developed and implemented assured buy back price for barley which was one of its kind in Indian grain market. The pricing model was linked with wheat as wheat is the competing crop. Barley from member farmer was purchased at assured buy back price ie., above 13% over market price.

On the Research and Development front, Malt barley breeding suitable for India are being bread in-house by a dedicated team of barley breeders and scientists. The company has started barley varietal development through introduction in 2008 and later in house breeding program initiated from 2013 onwards. Full Fledged lab established having micro malting system and all the necessary lab equipments for the calibrated analysis of barley and Malt. Barley varietal evaluation is being done at 3 locations covering different barley growing geographies. Off-season planting to advance selection & shorten generation cycles being undertaken.





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watersheds. It showcases potential solutions and defines the roles stakeholders need to play in managing this shared risk.

Reducing our own usage of fresh water within our operations is the first step and we work very hard in this direction by introducing new processes and changing behaviour to reduce water consumption within our breweries, while achieving the same high quality of product. We set ourselves very stringent targets and make investments to adopt world class technologies, upgrade our recycling in breweries and introduce behavioural changes in the way we use water. Equally important are efforts beyond our operations, outside our fence lines.

Our efforts towards resource sustainability strive to evolve comprehensive frameworks for co-operative management of water through cost effective, collaborative, programmes that explore sustainable co-management of water resources and rural livelihoods and offer solutions that can be implemented by grassroots workers on the back of robust technical support and social engineering.

Maximizing in-house efficiencies, SABMiller India is setting and meeting stringent targets towards reducing its own fresh water consumption year-on-year. Compared to last year, this has helped us save approximately 10% water and since 2009-10 we have been able to reduce a total of 36% of our consumption till today.

Outsourced breweries

• Our efforts till date at hired breweries have resulted in around 45% reduction in their water consumption

Highlights of the external initiatives (2010-2015)• Cost-effectively impacting over 18,000 farmers across a

target area of approx. 61,927 hectares surrounding our breweries in 123 villages across India. Total water saved due to improved agricultural practices vs. traditional on demonstration farms:

• Total water recharged through water structures constructed in the target area: 6,22,528.KL.

• Economic benefits to the project farmers (vs. conventional agriculture)

• Productivity increase: 18.93% • Income increase: 25.71%

Results of India water journey are an outcome of operational controls, use of cutting edge technologies and leadership initiatives outside the fence.

MALT BARLEY DEVELOPMENT PROGRAMME

Saanjhi Unnati (Progress through Partnership) is a small farmer program that is conceived & operationalised to bring about cultivation of malt barley in India, establish barley supply chain directly from the farmers eliminating middlemen and market spread (of over 15%) thereby bringing about improvement in the lives and livelihoods of small and marginal farmers.

Saanjhi Unnati is operational since 2005-06. During 2015-16, 8,000 farmers were covered in five states buying 44,000 tons of barley. Team of 36 members was involved in disseminating improved package of practices and post-harvest technology and was instrumental in 45% higher yield over state average. Taking a leap forward SABMiller India developed and implemented assured buy back price for barley which was one of its kind in Indian grain market. The pricing model was linked with wheat as wheat is the competing crop. Barley from member farmer was purchased at assured buy back price ie., above 13% over market price.

On the Research and Development front, Malt barley breeding suitable for India are being bred in-house by a dedicated team of barley breeders and scientists. The company has started barley varietal development through introduction in 2008 and later in house breeding program initiated from 2013 onwards. Full Fledged lab established having micro malting system and all the necessary lab equipments for the calibrated analysis of barley and Malt. Barley varietal evaluation is being done at 3 locations covering different barley growing geographies. Off-season planting to advance selection & shorten generation cycles being undertaken.

Managing Director’s statement

SPeCIAL BuSINeSS

Dear Shareholders,

BuSINeSS PeRfoRMANCe

FY 2015-16 was a positive year for the Beer industry with a return to volume growth despite regulatory issues in some states. I am pleased to inform you that your company was able to grow Sales Revenue by c.5% in FY 2015-16 in the face of an increasingly competitive market place re-affirming again the strength of our brands.

During the year we successfully launched Haywards 5000 BOLD, a premium strong beer extension of our leading mainstream brand Haywards 5000 in six states. The response from consumers has been encouraging and we would be rolling this to other states in 2016-17.

In December 2015, Knock Out was renovated with superior packaging and new communication in its core states of Karnataka, Maharashtra, Telangana and Andhra Pradesh. Post the re-launch the brand has shown encouraging momentum.

In March 2016, Foster’s was re-launched in states of Karnataka, Maharashtra and Haryana. The new pack comes in new trendy bottle design with a thermo-chromatic label, ring pull and a taste which resonated with consumers. We expect the brand to deliver strong growth in 2016-17.

Miller franchise, our offering in the Worth more segment, continues to grow at >90% for the past two years in a row and is the fastest growing premium Beer brand in the Indian beer industry.

Continuing the good progress we have made on cost containment in previous years, we also managed to restrict inflation on our cost of goods sold to well below inflation.

In 2015-16, we commissioned “Zero Liquid Discharge” projects in four of our breweries thereby reducing our water consumption by 10% on litre/litre basis over previous year reaffirming our commitment to our ‘Prosper’ vision.

AReA of CoNCeRN

The proposed exclusion of the alcoholic beverages industry from the GST regime would spell a significant adverse effect on this industry due to an inability to claim set off of taxes levied on input materials. Your company along with other industry players is actively engaged in representations to the central and state governments on the subject of inclusion of alcohol under GST.

futuRe outLook

We continue to believe that the future of the Indian beer industry is bright and will be driven by increasing disposable incomes and a steady growth in legal drinking age consumers. However, regulatory barriers affecting distribution, pricing and low outlet density will still be significant factors hampering growth.

Our strong portfolio of brands spanning all segments puts us in a good position to tackle the challenges facing us in an increasingly competitive market. We have a robust business plan that focuses our attention on key markets where we believe we can win.

As you may be aware AB Inbev has proposed to acquire SABMiller’s global operations and is currently seeking regulatory approvals across various countries markets in Africa, Europe, Asia-Pacific, China, US, Latin America etc.

In India, the Competition Commission of India has given its approval for merging the local businesses of the two companies in India. However the transaction in India will be dependent upon the completion of the bigger world-wide transaction which is subject to regulatory approvals. The transaction is expected to be completed in the second half of this year.

Cheers!Shalabh Seth


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Dear Shareholders,

The year 2015-16 was a positive year for the Beer industry with a return to volume growth despite regulatory issues in some states. I am pleased to inform you that your company was able to grow Sales Revenue by c.5% in 2015-16 in the face of an increasingly competitive market place re-affirming again the strength of our brands.

During the year we successfully launched Haywards 5000 BOLD, a premium strong beer extension of our leading mainstream brand Haywards 5000 in six states. The response from consumers has been encouraging and we would be rolling this to other states in 2016-17.


In March 2016, Foster’s was re-launched in the states of Karnataka, Maharashtra and Haryana. The new pack comes in a new trendy bottle design with a thermo-chromatic label, ring pull and a taste which has resonated with consumers. We expect the brand to deliver strong growth in 2016-17.

Miller franchise, our offering in the Worth more segment, continues to grow at >90% for the past two years in a row and is the fastest growing premium Beer brand in the Indian beer industry.

Continuing the good progress we have made on cost containment in previous years, we also managed to restrict inflation on our cost of goods to well below inflation.

In 2015-16, we commissioned “Zero Liquid Discharge” projects in four of our breweries thereby reducing our water consumption by 10% on litre/litre basis over previous year reaffirming our commitment to our ‘Prosper’ vision.

The proposed exclusion of the alcoholic beverages industry from the GST regime would spell a significant adverse effect on this industry due to an inability to claim set off of taxes levied on input materials. Your company along with other industry players is actively engaged in representations to the central and state governments on the subject of inclusion of alcohol under GST.

We continue to believe that the future of the Indian beer industry is bright and will be driven by increasing disposable incomes and a steady growth in legal drinking age consumers. However, regulatory barriers affecting distribution, pricing and low outlet density will still be significant factors hampering growth.

Our strong portfolio of brands spanning all segments puts us in a good position to tackle the challenges facing us in an increasingly competitive market. We have a robust business plan that focuses our attention on key markets where we believe we can win.

As you may be aware AB Inbev has proposed to acquire SABMiller’s global operations and is currently seeking regulatory approvals across various countries markets in Africa, Europe, Asia-Pacific, China, US, Latin America etc.

In India, the Competition Commission of India has given its approval for merging the local businesses of the two companies in India. However the transaction in India will be dependent upon the completion of the bigger world-wide transaction which is subject to regulatory approvals. The transaction is expected to be completed in the second half of this year.

Cheers!Shalabh Seth





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notice to MembersNOTICE is hereby given that the 27th Annual General Meeting of the members of the Company will be held at Janssen Delite Hall, Holy Spirit Hospital Campus, Mahakali Caves Road, Andheri (East), Mumbai 400 093 on Tuesday, the 23rd August, 2016 at 3.30 p.m. to transact the following business:

oRdINARy BuSINeSS

1. To receive, consider and adopt the stand alone and consolidated Audited Balance Sheet as at 31st March, 2016 and the Statement of Profit & Loss for the year ended on that date and the Report of the Directors and Auditors thereon.

2. To appoint a Director in place of Mr. Ari Mervis, who retires by rotation at this meeting and being eligible, offers himself for re-appointment.

3. Appointment of Auditors

To consider, and if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution:

ReSoLVed thAt M/s B S R & Co. LLP, Chartered Accountants (ICAI firm registration number 101248W), who were appointed as Statutory Auditors of the company to hold office upto conclusion of audit for the Financial Year 2016-17 i.e. upto conclusion of the Annual General Meeting for the Financial Year 2016-17, subject to ratification of members at each annual general meeting in terms of Section 139 of the Companies Act, 2013 read with Illustration 2 to Rule 6 of Companies (Audit and Auditors) Rules, 2014 and who have offered themselves to continue as Statutory Auditors for the Financial Year 2016-17 and have confirmed their eligibility to be appointed as Auditors in terms of provisions of Section 141 of the Act, and Rule 4 of the Audit and Auditors Rules, 2014, be and is hereby ratified to continue as Statutory Auditors of the Company for the Financial Year 2016-17 to hold office upto conclusion of the next annual general meeting at such remuneration as may be decided by the Board of Directors.

SPeCIAL BuSINeSS

4. To consider appointment of Mr. Philip James Vincent as Director of the Company.

To consider and if thought fit, to pass, with or without modification(s) the following resolution as an Ordinary Resolution:

ReSoLVed thAt Mr. Philip James Vincent, who has given his consent and a declaration in terms of Section 152(4) of the Companies Act, 2013 that he is not disqualified to act as Director under the said Act, was appointed as an Additional director of the Company by the Board on 15th September, 2015 in terms of sub-section (1) of Section 161 of the said Act, holds office till the date of this Annual General Meeting, and in respect of whom a notice has been received from a member under Section 160 of the said Act, be and is hereby appointed a Director of the Company liable to retire by rotation.

5. To consider appointment of Ms. Anna Jane Swaithes as Director of the Company.

To consider and if thought fit, to pass, with or without modification(s) the following resolution as an Ordinary Resolution:

ReSoLVed thAt Ms. Anna Jane Swaithes, Director appointed in a casual vacancy on account of resignation of Ms. Catherine May, who holds office upto this Annual General Meeting and in respect of whom a notice has been served on the company by a member in terms of Section 160 of the Companies Act, 2013 signifying his intention to propose her as a Director, be and is hereby appointed Director of the Company liable to retire by rotation.

6. Re-appointment of Independent Director

To consider and, if thought fit to pass with or without modification(s), the following resolution as a Special Resolution:


1. To receive, consider and adopt the standalone and consolidated Audited Balance Sheet as at 31st March, 2016 and the Statement of Profit & Loss for the year ended on that date and the Report of the Directors and Auditors thereon.


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ReSoLVed thAt pursuant to the provisions of sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 (Act) and the Rules framed thereunder, read with Schedule IV to the Act, as amended from time to time, reappointment of Mr. Arun Monappa who has submitted a declaration that he meets the criteria for independence as provided in section 149(6) of the Act, as an independent director by the Board of Directors at their meeting held on 7th March 2016 for second term from 1st April 2016 to 31st March 2018 be and is hereby approved and in respect of whom a notice has been received from a member under Section 160 of the said Act.

7. Re-appointment of Independent Director

To consider and, if thought fit to pass with or without modification(s), the following resolution as a Special Resolution:

ReSoLVed thAt pursuant to the provisions of sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 (Act) and the Rules framed thereunder, read with Schedule IV to the Act, as amended from time to time, reappointment of Ms. Shwetambari Rao Chandrakant who has submitted a declaration that she meets the criteria for independence as provided in section 149(6) of the Act, as an independent director by the Board of Directors at their meeting held on 7th March 2016 for second term from 1st April 2016 to 31st March 2018be and is hereby approved and in respect of whom a notice has been received from a member under Section 160 of the said Act.

BY ORDER OF THE BOARD Sridhar S

Company SecretaryPlace: BangaloreDate: 7th June 2016

NoteS

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on a poll in his/her stead. A proxy need not be a member of the company.

Proxies in order to be effective must be deposited at the registered office of the company not less than forty-eight hours before the meeting. A blank proxy form is enclosed.

2. For convenience of members an attendance slip is also annexed. Members are requested to affix their signature at the space provided therefor and hand over the same at the place of Meeting. The Proxy of a member should mark on the attendance slip as Proxy. Members are also requested to bring their copies of the Annual Report to the venue of the Meeting.

3. Under the Companies Act, 2013 and the rules thereunder, the company is permitted to serve on the Members documents including Annual Report and notices through, inter alia, the electronic mode. The company may send to the Members the Annual Report and other documents/communications either physically to their registered address or by e-mail at the e-mail addresses registered with the company/received through the respective Depository.

4. All queries relating to non-receipt of share certificates after transfer / transmission / dematerialization /rematerialization, mandates, change of address, nomination etc. may be sent to the Registrar & Share Transfer Agents, Sharex Dynamic (India) Pvt. Ltd. Unit No.1, Luthra Ind. Premises, Safed Pool, Andheri Kurla Road, Andheri (East), Mumbai - 400072 Tel: 28515606/ 5644/ 6338 Fax: 28512885, email: [email protected]

5. Voting through electronic means:

I. In compliance with provisions of Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014 as amended by the Companies (Management and Administration) Amendment Rules, 2015, the Company is pleased to provide members facility to exercise their right to vote on resolutions proposed to be considered at the Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting Services. The facility of casting the votes by the members using an electronic voting system from a place other than venue of the AGM (“remote e-voting”) will be

notice to Members continued...


RESOLVED THAT pursuant to the provisions of sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 (Act) and the Rules framed thereunder, read with Schedule IV to the Act, as amended from time to time, reappointment of Ms. Shwetambari Rao Chandrakant who has submitted a declaration that she meets the criteria for independence as provided in section 149(6) of the Act, as an independent director by the Board of Directors at their meeting held on 7th March 2016 for second term from 1st April 2016 to 31st March 2018 be and is hereby approved and in respect of whom a notice has been received from a member under Section 160 of the said Act.





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provided by National Securities Depository Limited (NSDL).

II. The facility for voting through polling paper shall be made available at the AGM and the members attending the meeting who have not cast their vote by remote e-voting shall be able to exercise their right at the meeting through polling paper.

III. The members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again.

IV. The remote e-voting period commences on 20th August, 2016 (9:00 am) and ends on 22nd August, 2016 (5:00 pm). During this period members’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date of 16th August, 2016, may cast their vote by remote e-voting. The remote e-voting module shall be disabled by NSDL for voting thereafter. Once the vote on a resolution is cast by the member, the member shall not be allowed to change it subsequently.

V. The process and manner for remote e-voting are as under:

A. In case a Member receives an email from NSDL [for members whose email IDs are registered with the Company/Depository Participants(s)]:

(i) Open email and open PDF file “remote e-voting.pdf” with your Client ID or Folio No. as password. The said PDF file contains your user ID and password/PIN for remote e-voting. Please note that the password is an initial password.

(ii) Launch internet browser by typing the following URL: https://www.evoting.nsdl.com

(iii) Click on Shareholder - Login

(iv) Put user ID and password as initial password/PIN noted in step (i) above. Click Login.

(v) Password change menu appears. Change the password/PIN with new password of your choice

with minimum 8 digits/characters or combination thereof. Note new password. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(vi) Home page of remote e-voting opens. Click on remote e-voting: Active Voting Cycles.

(vii) Select “EVEN” of SABMiller India Limited

(viii) Now you are ready for remote e-voting as Cast Vote page opens.

(ix) Cast your vote by selecting appropriate option and click on “Submit” and also “Confirm” when prompted.

(x) Upon confirmation, the message “Vote cast successfully” will be displayed.

(xi) Once you have voted on the resolution, you will not be allowed to modify your vote.

(xii) Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution /Authority letter etc. together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to [email protected] with a copy marked to [email protected]

B. In case a Member receives physical copy of the Notice of AGM [for members who see mail IDs are not registered with the Company/Depository Participants(s) or requesting physical copy]:

(i) Initial password is provided as below/at the bottom of the Attendance Slip for the AGM.

EVEN (Remote e-voting Event Number) USER ID PASSWORD/PIN

(ii) Please follow all steps from Sl. No. (ii) to Sl. No. (xii) above, to cast vote.



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VI. In case of any queries, you may refer the Frequently Asked Questions (FAQs) for Members and remote e-voting user manual for Members available at the download section of www.evoting.nsdl.com or call on toll free no.: 1800-222-990.

VII. If you are already registered with NSDL for remote e-voting then you can use your existing user ID and password/PIN for casting your vote.

VIII. You can also update your mobile number and e-mail id in the user profile details of the folio which may be used for sending future communication(s).

IX. The voting rights of members shall be in proportion to their shares of the paid up equity share capital of the Company as on the cut-off date of 16th August, 2016.

X. Any person, who acquires shares of the Company and become member of the Company after dispatch of the notice of AGM and holding shares as of the cut-off date i.e. 16th August, 2016, may obtain the login ID and password by sending a request at [email protected] or contacting the RTA at [email protected]

However, if you are already registered with NSDL for remote e-voting then you can use your existing user ID and password for casting your vote. If you forgot your password, you can reset your password by using “Forgot User Details/Password” option available on www.evoting.nsdl.com or contact NSDL at the following toll free no.: 1800-222-990.

XI. A member may participate in the AGM even after exercising his right to vote through remote e-voting but shall not be allowed to vote again at the AGM.

XII. A person, whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting at the AGM through polling paper.

XIII. M/s S.N. Ananthasubramanian & Co., Practising Company Secretaries have been appointed as the Scrutinizer for providing facility to the members of the Company to scrutinize the voting and remote e-voting process in a fair and transparent manner.

XIV. The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow voting with the assistance of scrutinizer, by use of “Polling Paper” for all those members who are present at the AGM but have not cast their votes by availing the remote e-voting facility.

XV. The Scrutinizer shall after the conclusion of voting at the AGM, will first count the votes cast at the meeting and thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the Company and shall make, not later than three days of the conclusion of the AGM, a consolidated scrutinizer’s report of the total votes cast in favour or against, if any, to the Chairman or a person authorized by him in writing, who shall countersign the same and declare the result of the voting forthwith.

XVI. The Results declared along with the report of the Scrutinizer shall be placed on the website of the Company www.sabmiller.in and on the website of NSDL immediately after the declaration of result by the Chairman or a person authorized by him in writing.

6. All documents referred to in the accompanying Notice and the Explanatory Statement shall be open for inspection at the Registered Office of the Company during normal business hours (9.00 am to 5.00 pm) on all working days except Saturdays, up to and including the date of the Annual General Meeting of the Company.

exPLANAtoRy StAteMeNt

(Pursuant to section 102 of the Companies Act, 2013)

As required by Section 102 of the Companies Act, 2013 (the Act), the following explanatory statement sets out all material facts relating to the business mentioned under Item Nos. 4 to7 of the accompanying Notice:


As required by Section 102 of the Companies Act, 2013 (the Act), the following explanatory statement sets out all material facts relating to the business mentioned under Item Nos. 4 to 7 of the accompanying Notice:





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ITEM NO. 4

Mr. Philip James Vincent has been appointed as an Additional director by the Board on 15th September, 2015 pursuant to Section 161(1) of the Companies Act, 2013 and his term as Additional director is upto the date of the ensuing Annual General Meeting. A member of the company has proposed appointment of Mr. Philip James Vincent as a director of the company and has served a Notice under Section 160 of the Companies Act, 2013. His appointment as director is subject to retirement by rotation under Section 152 and 160 of the Companies Act, 2013. A brief profile of Mr. Philip James Vincent is provided below:

Mr. Philip James Vincent is the Asia Pacific Finance Director of SABMiller plc based in Hong Kong. Prior to that he was Director, Group Finance & Control. Mr. Philip joined SABMiller from BBC Worldwide last year and quickly made a strong contribution to the group finance function.

None of the directors are either directly or indirectly concerned or interested in the said Resolution.

Information provided hereinabove sets out all such facts as are required to enable the members to understand the meaning, scope and implications of the item of business and to take a decision thereon.

Resolution is commended for the consent of the shareholders.

ITEM NO. 5

Ms. Anna Jane Swaithes has been appointed as a Director of the Company, pursuant to the provisions of Section 161(4) of the Companies Act, 2013 at the Board Meeting held on 3rd February, 2015 to fill the casual vacancy caused on the resignation of Ms. Catherine May, Director and she holds the office upto the date upto which Ms. Catherine May, former Director would have held the office i.e., upto this Annual General Meeting. A member of the company has proposed appointment of Ms. Anna Swaithes as a director of the company and has served a Notice under Section 160 of the Companies Act, 2013. Her appointment as director is subject to retirement by rotation under Section 152 and 160 of the Companies Act, 2013. A brief profile of Ms. Anna Jane Swaithes is provided below:

Ms. Anna Jane Swaithes is Head of Livelihoods, Land and Food Security at SABMiller plc. Anna joined SABMiller in 2012, and Anna works closely with colleagues in local business units, procurement, technical and sales functions to develop and implement strategies to support sustainable agriculture, enterprise development and livelihoods. She leads engagement on these topics with external stakeholders such as UN bodies and NGO partners. Immediately prior to joining SABMiller plc, Anna was Head of Development, Cocoa Partnership at Kraft Foods. She led the multi-stakeholder Cadbury Cocoa Partnership from its establishment in 2008 until 2012.She studied Law and German, and subsequently worked for 8 years as a strategy consultant to the food and beverage sector.

None of the Directors or Key Managerial Personnel (KMP) or relatives of directors or KMP are either directly or indirectly concerned or interested in the said Resolution.

Information provided herein above sets out all such facts as are required to enable the members to understand the meaning, scope and implications of the item of business and to take a decision thereon.


ITEM NO. 6

Mr. Arun Monappa has been appointed as an Independent Director of the Company at the Board meeting held on 3rd February, 2015 for a period of One Year effective from1st April 2015 upto 31st March 2016, who is not liable to retire by rotation.

Mr. Arun Monappa has given a declaration to the Board that he meets the criteria of independence as provided under section 149(6) of the Act. In the opinion of the Board, the person fulfils the conditions specified in the Act and the Rules framed thereunder for re-appointment as an Independent Director and he is independent of the management.

In compliance with the provisions of section 149 read with Schedule IV of the Act, the appointment of the above person as Independent Directors is now being placed before the Members for approval. A brief profile of the Independent Director to be appointed is given below:






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ITEM NO. 4

Mr. Philip James Vincent has been appointed as an Additional director by the Board on 15th September, 2015 pursuant to Section 161(1) of the Companies Act, 2013 and his term as Additional director is upto the date of the ensuing Annual General Meeting. A member of the company has proposed appointment of Mr. Philip James Vincent as a director of the company and has served a Notice under Section 160 of the Companies Act, 2013. His appointment as director is subject to retirement by rotation under Section 152 and 160 of the Companies Act, 2013. A brief profile of Mr. Philip James Vincent is provided below:

Mr. Philip James Vincent is the Asia Pacific Finance Director of SABMiller plc based in Hong Kong. Prior to that he was Director, Group Finance & Control. Mr. Philip joined SABMiller from BBC Worldwide last year and quickly made a strong contribution to the group finance function.

None of the directors are either directly or indirectly concerned or interested in the said Resolution.



ITEM NO. 5

Ms. Anna Jane Swaithes has been appointed as a Director of the Company, pursuant to the provisions of Section 161(4) of the Companies Act, 2013 at the Board Meeting held on 3rd February, 2015 to fill the casual vacancy caused on the resignation of Ms. Catherine May, Director and she holds the office upto the date upto which Ms. Catherine May, former Director would have held the office i.e., upto this Annual General Meeting. A member of the company has proposed appointment of Ms. Anna Swaithes as a director of the company and has served a Notice under Section 160 of the Companies Act, 2013. Her appointment as director is subject to retirement by rotation under Section 152 and 160 of the Companies Act, 2013. A brief profile of Ms. Anna Jane Swaithes is provided below:

Ms. Anna Jane Swaithes is Head of Livelihoods, Land and Food Security at SABMiller plc. Anna joined SABMiller in 2012, and Anna works closely with colleagues in local business units, procurement, technical and sales functions to develop and implement strategies to support sustainable agriculture, enterprise development and livelihoods. She leads engagement on these topics with external stakeholders such as UN bodies and NGO partners. Immediately prior to joining SABMiller plc, Anna was Head of Development, Cocoa Partnership at Kraft Foods. She led the multi-stakeholder Cadbury Cocoa Partnership from its establishment in 2008 until 2012.She studied Law and German, and subsequently worked for 8 years as a strategy consultant to the food and beverage sector.

None of the Directors or Key Managerial Personnel (KMP) or relatives of directors or KMP are either directly or indirectly concerned or interested in the said Resolution.

Information provided herein above sets out all such facts as are required to enable the members to understand the meaning, scope and implications of the item of business and to take a decision thereon.


ITEM NO. 6

Mr. Arun Monappa has been appointed as an Independent Director of the Company at the Board meeting held on 3rd February, 2015 for a period of One Year effective from1st April 2015 upto 31st March 2016, who is not liable to retire by rotation.




ITEM NO. 6

Mr. Arun Monappa was appointed as an Independent Director of the Company at the Board meeting held on 3rd February, 2015 for a period of One Year effective from1st April 2015 upto 31st March 2016, who is not liable to retire by rotation. The Board reappointed Mr. Arun Monappa for a further period from 1st April 2016 to 31st March 2018 at its meeting held on 7th March 2016.


In compliance with the provisions of section 149 read with Schedule IV of the Act, the reappointment of the above person as Independent Directors is now being placed before the Members for approval. A brief profile of the Independent Director to be appointed is given below:

Ms. Anna Jane Swaithes is Head of Livelihoods, Land and Food Security at SABMiller plc. Anna joined SABMiller in 2012, and Anna works closely with colleagues in local business units, procurement, technical and sales functions to develop and implement strategies to support sustainable agriculture, enterprise development and livelihoods. She leads engagement on these topics with external stakeholders such as UN bodies and NGO partners. Immediately prior to joining SABMiller plc, Anna was Head of Development, Cocoa Partnership at Kraft Foods. She led the multi-stakeholder Cadbury Cocoa Partnership from its establishment in 2008 until 2012. She studied Law and German, and subsequently worked for 8 years as a strategy consultant to the food and beverage sector.


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Mr. Arun Monappa is a Non-Executive Independent Director of Tata Coffee Limited since March 31, 2006. He has international experience having worked in corporates in Sweden, USA and in India besides being a Planter. He served as a Professor of Personnel Management & Industrial Relations at IIM, Ahmedabad. He holds a Masters degree in Political Science & Public Administration, M.Sc. in Industrial Relations and is a J.N.Tata Scholar at L.S.E.

The Board has re-appointed Mr. Arun Monappa as an Independent Director based on the evaluation by the Board and also the qualification, experience and standing as provided herein above.

None of the Directors or Key Managerial Personnel (KMP) or relatives of Directors or KMP are either directly or indirectly concerned or interested in the said Resolution.



ITEM NO. 7

Ms. Shwetambari Rao Chandrakanth has been appointed as an Independent Director of the Company at the Board meeting held on 3rd February, 2015 for a period of One Year effective from1st April 2015 up to 31st March 2016, who is not liable to retire by rotation.

Ms. Shwetambari Rao Chandrakanth has given a declaration to the Board that she meets the criteria of independence as provided under section 149(6) of the Act. In the opinion of the Board, the person fulfils the conditions specified in the Act and the Rules framed thereunder for re-appointment as an Independent Director and she is independent of the management.


Ms. Shwetambari Rao Chandrakant is a Law graduate from ILS Law College, Pune and has 11 years of rich experience in K Law, a leading Law firm in Bangalore. She is a specialist in Corporate and Commercial Laws and advisor on high value transactions involving structuring and setting up of business operations in India.

The Board has appointed Ms. Shwetambari Rao Chandrakant as an Independent Director based on the evaluation by the Board, qualification, experience and standing as provided hereinabove.

None of the Directors or Key Managerial Personnel (KMP) or relatives of Directors or KMP are either directly or indirectly concerned or interested in the said Resolution.



BY ORDER OF THE BOARD Sridhar S

Company Secretary

Place: BangaloreDate: 7th June 2016


Ms. Shwetambari Rao Chandrakanth has been appointed as an Independent Director of the Company at the Board meeting held on 3rd February, 2015 for a period of One Year effective from1st April 2015 up to 31st March 2016, who is not liable to retire by rotation. The Board reappointed Ms. Shwetambari Rao Chandrakanth for a further period from 1st April 2016 to 31st March 2018 at its meeting held on 7th March 2016.

Ms. Shwetambari Rao Chandrakanth has given a declaration to the Board that she meets the criteria of independence as provided under section 149(6) of the Act. In the opinion of the Board, the person fulfils the conditions specified in the Act and the Rules framed thereunder for re-appointment as an Independent Director and she is independent of the management.





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Directors’ report

(Rupees in Crores)

Particulars financial year 2015-16

financial year 2014-15

Revenue from operations 2087.71 1939.70

Profit/(Loss) before taxation (47.36) (127.36)

Less: Provision for taxation - -

Profit/(Loss) after taxation (47.36) (127.36)

oPeRAtIoNS

The year 2015-16 was a positive year for the Beer industry with a return to volume growth despite regulatory issues. Your company was able to grow Sales Revenue by circa 5% in the face of an increasingly competitive market place re-affirming again the strength of our brands.

During the year your Company successfully launched Haywards 5000 BOLD, a premium strong beer extension of our leading mainstream brand Haywards 5000 in six states. The response from consumers has been encouraging and would be rolling this to other states in 2016-17.


In March 2016, Foster’s was re-launched in states of Karnataka, Maharashtra and Haryana. The new pack comes in new trendy bottle design with a thermo-chromatic label, ring pull and a taste which resonated with consumers. Your Company expects the brand to deliver strong growth in 2016-17.

Miller franchise in the worth more segment continues to grow at more than 90% for the past two years in a row and is the fastest growing premium Beer brand in the Indian beer industry.

Dear Members,

Your Directors have pleasure in presenting their 27th Report and the Statement of accounts for the year ended 31st March 2016.

StAte of AffAIRS

Continuing the good progress, your Company has made on cost containment in previous years and also managed to restrict inflation on the cost of goods sold to well below inflation.

During the year 2015-16 your Company has commissioned “Zero Liquid Discharge” projects in four of breweries thereby reducing water consumption by 10% for every litre of water used for every litre of beer manufactured basis over previous year reaffirming the commitment to ‘Prosper’ vision.

Your Board enjoys the unqualified support of all its financiers whose confidence in the future of your company is evidenced by the fact that all borrowings have been made without the bankers taking any charges over your company’s assets and are used for both short term and long term purposes.

eVeNtS SuBSequeNt to the dAte of fINANCIAL StAteMeNtS

There are no material changes and commitments affecting financial position of the company between 31st March 2016 and the date of Board’s Report.

dIVIdeNd

As the Company has incurred loss during the year, the Directors do not recommend any dividend on the equity capital of the Company.

ouR BRANdS

HAYWARDS 5000

During the year under review our Haywards 5000 Hausla Buland Academy extended its reach with a new entrepreneurship platform titled called “Hauslay ki Udaan”. This new contest was looking for India’s best entrepreneurship ideas across 10 cities and was also broadcasted on television as India’s first start-up reality TV show. The winner of the contest was selected amongst the 10 finalists and received a seed funding for his winning business idea. In 2015 the Hauslay Buland Academy reached out to over 40,000 respondents across the country and provided many of them with online courses of skills development and entrepreneurship training.


The year 2015-16 was a positive year for the Beer industry to volume growth despite regulatory issues. Your company was able to grow Sales Revenue by circa 5% in the face of an increasingly competitive market place re-affirming again the strength of our brands.

Continuing the good progress, your Company has made on cost containment in previous years this year as well your company has managed to restrict inflation on the cost of goods to well below inflation.

During the year 2015-16 your Company has commissioned “Zero Liquid Discharge” projects in four of breweries thereby reducing water consumption by 10% for every litre of water used for every litre of beer manufactured basis over previous year reaffirming the commitment to ‘Prosper’ vision.

Your Board enjoys the unqualified support of all its financiers whose confidence in the future of your company is evidenced by the fact that all borrowings have been made without the bankers taking any charges over your company’s assets and are used for both short term and long term purposes.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There are no material changes and commitments affecting financial position of the company between 31st March 2016 and the date of Board’s Report.

As the Company has incurred loss during the year, the Directors do not recommend any dividend on the equity capital of the Company.

HAYWARDS 5000

During the year under review our Haywards 5000 Hausla Buland Academy extended its reach with a new entrepreneurship platform titled “Hauslay ki Udaan”. This new contest was looking for India’s best entrepreneurship ideas across 10 cities and was also broadcasted on television as India’s first start-up reality TV show. The winner of the contest was selected amongst the 10 finalists and received a seed funding for his winning business idea. In 2015 the Hausla Buland Academy reached out to over 40,000 respondents across the country and provided many of them with online courses of skills development and entrepreneurship training.


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This year was also a significant milestone for Haywards 5000 with the successful launch of a new and higher priced variant Haywards 5000 BOLD into selected states. This new beer is brewed longer under the supervision of our expert brew masters and as a result has a full-bodied and flavourful taste. Haywards 5000 BOLD has received extremely positive feedback from both consumers and trade and early results are very encouraging.

ROYAL CHALLENGE

Royal Challenge continued to build its “smoothness” brand proposition and entrenched it through outlet level promotions and other initiatives that helped consumers experience the product proposition of the smoothest beer first hand. The brand gained segment share in the mainstream mild beer segment during the last year. Royal Challenge is also undergoing a packaging refresh that is looking at contemporising the label design and the same will be rolled out in its core markets of Telangana and Andhra Pradesh during the summer-peak of 2016.

KNOCK OUT

We did extensive work during 2015 to better understand Mainstream consumers’ changing expectations and aspirations. Basis the insights that we found, we developed a new contemporary packaging design and brand positioning for Knock Out. The new packaging design was launched in market in Karnataka and Maharashtra in late 2015 along with the new positioning of “strength of character”.

This introduction was backed with a comprehensive through the line campaign in both states during the last quarter of the year and our brand campaign uses regional celebrities as brand ambassadors. During the summer-peak of 2016 the same new packaging and brand campaign was also rolled out into both Telangana and Andhra Pradesh and the brand now has a unified packaging and brand campaign.

FOSTER’S

Foster’s continues to plays a critical role for our business and had been positioned earlier on the “extra-cold refreshment”

territory. In order to further improve the brand’s consideration and equity, this year we developed a new world class packaging and bottle design with the help of an international design agency.

We introduced this new and innovative packaging in the month of March 2016 in the states of Karnataka, Maharashtra and Haryana and the market launch was supported by an extensive through the line marketing campaign. Feedback from consumers has been overwhelmingly positive and we are expecting significant growth for the brand in the future.

MILLER

Miller High Life was launched in India in 2011 as a mild American lager which perfectly balances smoothness and bitterness. This premium brand is an easy-drinking lager that champions the cause of a perfect “Work-Life” balance. Our brand narrative and all our brand communication is built around the pay off line “It’s Miller time”.

In late 2014 we had launched the “strong version” Miller ACE and this new brand has been growing very fast since its launch. The new brew has been appreciated by Premium beer consumers in the best clubs and bars across India.

This success has been made possible by an extensive and consistent marketing campaign and through the association with the electronic dance music festival Supersonic in 2015 which gave the brand access to the right consumers in the right occasions.

PERONI NASTRO AzzURRO

Peroni Nastro Azzurro is an Italian style beer which appeals to the style conscious consumers. The brand continued to focus in the major metros only in order to build its core positioning of Italian style, brought alive with world class activations in top on-premise key accounts only. The brand was associated with some of the well-known and high-end fashion properties and labels in the country. Subtle branding and effortless style combined with a crisp taste has made Peroni Nastro Azzurro the beer of choice for cosmopolitan and stylish drinkers that demand the best in everything they choose.

Director’s report continued...


Royal Challenge continued to build its “smoothness” brand

proposition and entrenched it through outlet level initiatives

that helped consumers experience the product proposition

of the smoothest beer first hand. The brand gained segment

share in the mainstream mild beer segment during the last

year. Royal Challenge is also undergoing a packaging refresh

that is looking at contemporising the label design and the

same was rolled out in its core markets of Telangana and

Andhra Pradesh during the summer-peak of 2016.





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huMAN ReSouRCe

At SABMiller India, we believe that our people have helped us carve out a niche in this fast-paced business environment and it’s because of our people that we are one of the leading and most admired brewers in the world. We continuously invest in attracting, developing and retaining top talent. Our philosophy of high performance and high engagement is built around encouraging entrepreneurship amongst our people and rewarding leadership behaviours. As an organization we thrive on and are driven by our values and we are deeply committed to upholding the same going forward. During the fiscal year 2015-16, SABMiller India focused on developing the organizational capability through Leadership development initiatives, enhancing gender diversity and nurturing internal talent through structured interventions. Our Talent philosophy builds on the foundation of on-boarding our talent, retaining our key contributors and ensuring continuous dialogue on performance.

At the beginning of this fiscal year our corporate headquarter moved into a new leased premise at Manyata Tech Park which is one of the most prominent business parks in Bangalore. Both our office and the business park boasts of all modern amenities befitting a future ready business space.

Good people management gives SABMiller a distinct advantage over our competitors by ensuring that we have the right people, in the right jobs, with the right competencies and behaviours to deliver our business strategy. We renewed our people philosophy through– Our People Way (OPW), Our People Way articulates good people management practices, which are essential in a globally integrated business like ours. This year also witnessed roll-out of Corporate Architecture and leadership behaviour across the business.

Leadership Capability development was a key theme this year and we enabled the same through multiple initiatives.

• LeadershipFundamentalswasrolledoutfor163Managersin 12 batches covering 922 training man-days followed by Leading Managers which was rolled out for 69 senior leaders in 4 batches covering 207 training man-days.

• Developmentcenterapproachwasadoptedforpracticingmanagers. Plant Heads and Supply Chain managers had the opportunity to go through the same. Inputs received,

are being used for People decisions and Individual Development Plan.

• Overall87%ofouremployeeshadatleastoneIndividualDevelopment Plan need addressed during the year.

On the other hand in 2015, we launched the Season II of ‘Brew a Career’ – an innovative case study approach to our campus hiring programme to attract the right talent from leading B-Schools. This initiative helped us to reach out to large section of young talent besides giving us right mileage in social media.

At SABMiller India, we believe that creating and maintaining a diverse workforce is a business imperative. To pave way for change we initiated Gender Sensitivity Skills programs in key locations. Over 180 personnel benefitted through these workshops. The first wave of the trainings was launched at our breweries in Bangalore, followed by sessions in Pondicherry, Sonepat and Aurangabad. This year we also made Capital investment at key units to enable a more conducive workplace. Against our ambition of 15%, during the year we have inducted 16.2% women talent among lateral hires.

Your company continues to maintain its impressive record on industrial relations without any interruption to work. Indeed, this year, your company has amicably signed 1 long term settlement at Aurangabad.

BoARd MeetINgS

The Board of Directors met 4 times during the financial year i.e., on 19th May 2015, 11th August 2015, 25th November 2015,7th March 2016.

dIReCtoRS

In accordance with the Clause (c) sub-Clause (6) of Section 152 of the Companies Act, 2013 at every Annual General Meeting of the Company, one third of the total numbers of Directors are liable to retirement by rotation.

Accordingly Mr. Ari Mervis, Director of the company, who is the longest in the office of Director retires by rotation at this Annual General Meeting and being eligible, offers himself for reappointment.


Good people management gives SABMiller a distinct advantage over our competitors by ensuring that we have the right people, in the right jobs, with the right competencies and behaviours to deliver our business strategy. We renewed our people philosophy through– Our People Way (OPW). Our People Way articulates good people management practices, which are essential in a globally integrated business like ours. This year also witnessed roll-out of Corporate Architecture and leadership behaviour across the business.

The Board of Directors met 4 times during the financial year i.e., on 19th May 2015, 11th August 2015, 25th November 2015 and 7th March 2016.


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Mr. Philip James Vincent has been appointed as Additional director of the company w.e.f. 15th September, 2015.

Ms. Anna Jane Swaithes has been appointed as Director in the casual vacancy created on account of resignation of Ms. Catherine May and she holds office upto the date of this Annual General Meeting.

key MANAgeRIAL PeRSoNNeL

Mr. Shalabh Seth, Managing Director, Mr. Tejvir Singh, Chief Financial Officer and Mr. Sridhar S, Company Secretary are the Key Managerial Personnel of the Company and there is no change in Key Managerial Personnel since last financial year.

INdePeNdeNt dIReCtoRS

Mr. Arun Monappa and Ms. Shwetambari Rao Chandrakant were re-appointed as Independent Directors by the Board at their meeting held on 7th March, 2016 for a period of two years from 1st April 2016 to 31st March 2018 subject to approval of shareholders in ensuing Annual General Meeting to be held on August 23, 2016

The Company has received declaration from Independent Directors of the Company under Section 149(7) of the Companies Act, 2013,that they meet the criteria of independence laid down in Section 149(6).

dIReCtoRS’ APPoINtMeNt ANd ReMuNeRAtIoN PoLICy

The Company has adopted a policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178. The said policy is available at the company's website: www.sabmiller.in.

CoMPoSItIoN of AudIt CoMMIttee

During the year, the Audit Committee was re-constituted. The present members of the Committee are Mr. Philip Vincent, Chairman, Mr. Arun Monappa, Independent Director and Ms. Shwetambari Rao Chandrakant, Independent Director.

the NoMINAtIoN ANd ReMuNeRAtIoN CoMMIttee

The Nomination and Remuneration Committee was re-constituted during the year. The present members of the Committee are Mr. Ari Mervis -Chairman, Mr. Arun Monappa, Independent Director and Ms. Shwetambari Rao Chandrakant, Independent Director.

StAkehoLdeRS ReLAtIoNShIP CoMMIttee

The Stakeholders Relationship Committee was re-constituted during the year. The present members of the Committee are Mr. Ari Mervis, Mr. Tejvir Singh, Mr. Suyog Karajgi and Mr. Sridhar S.

VIgIL MeChANISM

The company has an adequate and functional vigil mechanism and ensures that the interests of a person who uses such mechanism are not prejudicially affected on account of such use. The said policy is available at the company's website: www.sabmiller.in

RePoRt AS PeR SexuAL hARASSMeNt of WoMeN At WoRkPLACe (PReVeNtIoN, PRohIBItIoN ANd RedReSSAL) ACt, 2013

The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace as per the Act and has also constituted Internal Complaints Committees to inquire into complaints of sexual harassment and recommend appropriate action. The Internal Complaints Committee constituted under the said Act has received two complaints during the year. The Committee has investigated both the complaints and a report has been submitted to the management in respect of the complaints for further action. The management is in the process of taking disciplinary action as required.

dIReCtoRS’ ReSPoNSIBILIty StAteMeNt

In pursuance of Section 134(5) of the Companies Act, 2013, the Directors hereby confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with


The Company has received declaration from Independent Directors of the Company under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149(6).





22

proper explanation relating to material departures.

2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period.

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors had prepared the annual accounts on a going concern basis and

5. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

extRACt of ANNuAL RetuRN

Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in MGT 9 is annexed to this Report.

AudItoRS

M/s. B S R & Co. LLP, Chartered Accountants have been appointed as Statutory Auditors of the Company to hold office

upto the financial year 2016-17. The Audit Committee and the Board have recommended the appointment of B S R & Co. LLP as Statutory Auditors of the company for the financial year 2016-17 subject to ratification by the Shareholders at the ensuing Annual General Meeting.

The report of M/s B S R & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company on the financial statements of the Company for the year ended 31 March, 2016 is annexed to the financial statements in terms of provisions of Section 134(2) of the Companies Act, 2013. The observations of the Auditors in their report are self-explanatory and/or explained suitably in the Notes forming part of the Financial Statements. The report of the Statutory Auditors does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.

SeCRetARIAL AudIt

Pursuant to the provisions of Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report of M/s Kedarnath & Associates, Practising Company Secretary is annexed to this report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.

CouRt/tRIBuNAL oRdeRS

There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.




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CoNSeRVAtIoN of eNeRgy, teChNoLogy ABSoRPtIoN, foReIgN exChANge eARNINgS & outgo

A. Conservation of Energy

(i) the steps taken or impact on conservation of energy;

1. Energy efficiency in breweries is achieved through a process of continuous improvement. The company continues to identify opportunities through benchmarking globally against breweries of the SABMiller group.

2. Robust reporting & review mechanisms for detailed analysis of Energy usages in Breweries and ranking them according to the individual performances on common scale. Knowledge Sharing across the Breweries with more focus and implement cross brewery best-in-class practices very quickly.

3. Extensive benchmarking against global standards across SABMiller group industry standards.

4. Highly focused Audits through global Energy Auditing tools to identify opportunities for improvements and implementation.

5. Focused Actions on reducing CO2 emissions from our operations through utilization of renewable Energy sources like Bio-mass Boilers, Solar Heating systems, Vapor absorption Refrigeration plants and Bio gas usage in Boiler as ancillary fuel. Actions on Electricity usage reduction, focusing the reduction in CO2 emission as well as overall Energy reduction.

(ii) the steps taken by the company for utilising alternate sources of energy;

To reduce dependent on conventional power, our Breweries are also using biomass for energy generation at 9 breweries and 2 breweries use fossil fuel.

(iii) the capital investment on energy conservation equipments;

Rs.23,35,000

(B) Technology absorption

(i) the efforts made towards technology absorption;

The company has not acquired any technology from third parties for its production process. The company uses its own technologies, process and methods.

Regular reviews of investments for energy improvement initiatives. For example Condensate recovery Improvement & Flash Steam recovery in Steam Systems, Vapor Heat recovery systems in Brewing, De Super heaters in Refrigeration plants to recover waste heat and used for Hot water Generation, Variable Speed Drives on refrigeration & Air Compressors and Bio gas usage in Boiler are done on a continuous basis. Such investments are made at appropriate times after a thorough review of benefits, costs, existing practices and people capabilities.






24




(ii) the benefits derived like product improvement, cost reduction, product development or import substitution;

It has given more robust operation controls for our equipments. Cost savings derived from the projects to the tune of Rs.4.5 lakhs during the year.

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-(a) the details of technology

imported;(b) the year of import;(c) whether the technology been fully

absorbed;(d) if not fully absorbed, areas where

absorption has not taken place, and the reasons thereof; and

The company has not made any purchases of technology or made payments towards transfer of technology during the year under review.

(iv) the expenditure incurred on Research and Development.

The Company has not incurred any expenditure on Research and Development


(C) Foreign exchange earnings and Outgo

During the year, the company has earned Rs.90.16 Crores in foreign exchange. An amount of Rs.68.70 Crores was incurred in foreign exchange.



It has given more robust operation controls for our equipments and savings in cost.

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-(a) the details of technology imported;(b) the year of import;(c) whether the technology been fully










24





It has given more robust operation controls for our equipments. Cost savings derived from the projects to the tune of Rs.4.5 lakhs during the year.

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-(a) the details of technology

imported;(b) the year of import;(c) whether the technology been fully







(C) Foreign exchange earnings and Outgo

During the year, the company has earned Rs.90.16 Crores in foreign exchange. An amount of Rs.68.70 Crores was incurred in foreign exchange.



25


detAILS ReLAtINg to dePoSItS

During the year, the Company has not accepted any public deposits as defined in the Companies (Acceptance of Deposits) Rules, 2014.

CoRPoRAte SoCIAL ReSPoNSIBILIty PoLICy

The Corporate Social Responsibility Committee comprises of Mr. Stephen Shapiro, Ms. Shwetambari Rao and Ms. Anna Swaithes.

The Company has not made any profits during the last several years including last three financial years and as such spending of 2% of profits of the Company does not arise. However, as a good corporate citizen, the company is carrying out CSR activities suo moto in some of the areas. For more details, please refer to the Sustainable Development Report.

RISk MANAgeMeNt PoLICy

The Company has a Risk Management system in place. The Risk Management system encompasses all aspects of Risk Management on how risks should be identified, prioritized and reported to facilitate the management of those risks. The Company has adopted a Risk Management Policy as a part of its Risk Management System. All the Functions, Breweries and Offices and employees at all levels are tasked with the requirement of identifying and reporting risks. The employees are guided by the process and practice as enumerated in the Enterprise Risk Management and Reporting Manual adopted by the Company. The Manual incorporates industry-wide and

SABMiller Group level best practices in Risk Management. Top strategic and operational risks are reviewed and action plans to mitigate such risks are monitored by the top management and the Audit Committee.

PARtICuLARS of LoANS, guARANteeS oR INVeStMeNtS

Pursuant to the provisions of Section 186 of the Companies Act, 2013, the Company has given loan of Rs.57,38,84,381/- to its subsidiary SPR Distilleries Private Limited.

ReLAted PARty tRANSACtIoNS

Disclosure of particulars of Contracts/Arrangements entered into by the Company with Related Parties referred to in Sub-Section (1) of Section 188 of the Companies Act, 2013 are annexed to this Report in Form AOC-2.

foRMAL ANNuAL eVALuAtIoN of BoARd PeRfoRMANCe

The Board evaluated its performance and that of the Committees and of individual directors by seeking their inputs on various aspects of functioning of the Board, the Committees and the individual directors.

Various attributes were taken into consideration in the evaluation including Board composition and quality, Board strategy and risk management, Board and Management Relations, Directors obligation on participation at the Board meetings, knowledge and skill, personal attributes and implementation of corporate governance practices.

The inputs shared by the Directors were considered and discussed at the meeting of the Board, meeting of directors other than independent directors and Nomination and Remuneration Committee. Further, the Independent Directors held a separate meeting in which they reviewed the performance of Board, Chairman of the Board and of Non-Executive Directors.

ACkNoWLedgeMeNt

Your Directors wish to place on record their appreciation for contribution made by the employees at all levels. The Directors would also like to acknowledge the continued support extended by Bankers, Distributors, Shareholders, Customers and Suppliers.

FOR AND ON BEHALF OF THE BOARD

Ari Mervis Shalabh Seth Director Managing Director




25


















ACkNoWLedgeMeNt







25


















ACkNoWLedgeMeNt






Pursuant to the provisions of Section 186 of the Companies Act, 2013, the Company has given loan of Rs.57,38,84,381/- to its subsidiary SPR Distilleries Private Limited and Rs.44,83,314/- to SABMiller Breweries Pvt. Ltd.





26

I. REGISTRATION AND OTHER DETAILS:

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10% or more of the total turnover of the company shall be stated)

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

1 CIN U65990MH1988PLC049687

2 Registration Date 18th November 1988

3 Name of the Company SABMiller India Limited

4 Category/Sub-Category of the company Company limited by shares

5 Address of the registered office and contact details

Unit No. 301-302, Dynasty Business ParkB Wing, Andheri Kurla RoadAndheri (East), Mumbai 400 059Tel: (022) 39499999 | Fax: (022) 30913666

6 Whether listed company Yes/No No

7 Name, address and contact details of Registrar and Transfer Agent, if any

Sharepro Services (India) Pvt LtdSamhita Warehousing ComplexGala No.52 to 56, Bldg No.13A-BNear Sakinaka Telephone ExchangeAndheri-Kurla Road, SakinakaMumbai 400072

Sl.No.Name and Description of main products/services

NIC Code of the product/service

% of total turnover of the company

1 Beer 15531 100%

Sl.No.Name and Address of the company

CIN/GLNHolding / Subsidiary / Associates

% of shares

held Applicable Section

1 SABMiller Asia B.V - Holding company 51.76 2(46)

2SABMiller BreweriesPrivate Limited

U99999MH1995PTC138600 Associate company 45.36 2(6)

Form No. MGT-9

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

EXTRACT OF ANNUAL RETURN as on financial year ended on 31st March 2016




27

IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i. Category-wise Share Holding

Category of shareholders

No. of shares held at the beginning of the year No. of shares held at the end of the year % of change during

the yearDemat Physical Total% of total

sharesDemat Physical Total % of total

shares

A. PROMOTERS

1) Indian

a) Individual/HUF 0 0 0 0.00 0 0 0 0.00 0.00

b) Central Govt 0 0 0 0.00 0 0 0 0.00 0.00

c) State Govt(s) 0 0 0 0.00 0 0 0 0.00 0.00

d) Bodies Corporate 142069372 153 142069525 45.36 142069372 5945 142075317 45.36 0.00

e) Banks/FI 0 0 0 0.00 0 0 0 0.00 0.00

f) Any other 0 0 0 0.00 0 0 0 0.00 0.00

Sub Total (A) (1) 142069372 153 142069525 45.36 142069372 5945 142075317 45.36 0.00

2) Foreign

a) NRI Individual 0 0 0 0.00 0 0 0 0.00 0.00

b) Other individuals 0 0 0 0.00 0 0 0 0.00 0.00

c) Bodies Corporate 167676855 1651174 169328029 54.07 167676855 1651174 169328029 54.07 0.00

d) Banks/FI 0 0 0 0.00 0 0 0 0.00 0.00

e) Any other 0 0 0 0.00 0 0 0 0.00 0.00

Sub Total (A) (2) 167676855 1651174 169328029 54.07 167676855 1651174 169328029 54.07 0.00

Total shareholding of Promoter (A)=(A)(1)+(A)(2) 309746227 1651327 311397554 99.43 309746227 1657119 311403346 99.43 0.00

B. PUBLIC SHAREHOLDING

1) Institutions

a) Mutual Funds/UTI 0 2240 2240 0.00 0 2240 2240 0.00 0.00

b) Banks/FI 1312 2696 4008 0.00 1312 2696 4008 0.00 0.00

c) Central Govt 0 0 0 0.00 0 0 0 0.00 0.00

d) State Govt(s) 0 0 0 0.00 0 0 0 0.00 0.00

e) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00

f) Insurance Companies 0 0 0 0.00 0 0 0 0.00 0.00

g) FIIs 0 0 0 0.00 0 0 0 0.00 0.00

h) Foreign Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00

i) Others (Specify) 0 0 0 0.00 0 0 0 0.00 0.00

Sub Total (B) (1) 1312 4936 6248 0.00 1312 4936 6248 0.00 0.00

2) Non Institutions

a) Bodies Corporate

i) Indian 35996 14374 50370 0.02 57959 19950 77909 0.02 0.01

ii) Overseas 0 0 0 0.00 0 0 0 0.00 0.00







28

ii. Shareholding of Promoters

iii. Change in Promoters’ Shareholding (please specify, if there is no change)

b) Individuals

i) Individual shareholders holding nominal share capital upto Rs. 2 lakh

363836 1267890 1622082 0.52 344782 1254948 1599730 0.51 0.01

ii) Individual shareholders holding nominal share capital in excess of Rs. 2 lakh

0 0 0 0.00 0 0 0 0.00 0.00

c) Others (specify) 8834 84844 93678 0.03 9149 79941 89090 0.03 0.00

Sub Total (B) (2) 408656 1357474 1766130 0.56 411890 1354839 1766729 0.57 0.02

Total public shareholding (B)=(B)(1)+(B)(2) 409968 1362410 1772378 0.56 413202 1359775 1772977 0.57 0.02

C. SHARES HELD BY CUSTODIAN FOR GDRS & ADRS

0 0 0 0.00 0 0 0 0.00 0.00

Grand Total (A+B+C) 310156195 3014541 313170736 100.00 310159429 3011307 313170736 100.00 0.00

Sl. No. Shareholder’s Name

Shareholding at the beginning of the year Shareholding at the end of the year% of

change during the

yearNo. of

shares

% of total shares of the

company

% of shares Pledged/

encumbered to total shares

No. of shares

% of total shares of the

company

% of shares Pledged/ en-cumbered to total shares

1 SABMiller Asia B.V 162086038 51.76 0.00 162086038 51.76 0.00 0.00

2 SABMiller Breweries Pvt Ltd 142069525 45.36 0.00 142075317 45.36 0.00 0.00

3 SABMiller India Holdings 5590817 1.79 0.00 5590817 1.79 0.00 0.00

4 Austindia Pty Limited 1651174 0.53 0.00 1651174 0.53 0.00 0.00

Total 311397554 99.44 0.00 311403346 99.44 0.00 0.00

Sl. No. Particulars

Shareholding at the beginning of the year Cumulative shareholding during the year

No. of shares % of total shares of the company No. of shares % of total shares

of the company

1 At the beginning of the year 311397554 99.44 311397554 99.44

2 Datewise increase/decrease in promoters shareholding during the year specifying the reasons for increase/decrease (eg. Allotment/transfer/bonus/sweat equity, etc)- Increase on transfer 27.07.2015 21.09.2015 28.03.2016

11194

4783

0.000.000.00

11194

4783

0.000.000.00

3 At the end of the year 311402542 99.44 311402542 99.44




29

iv. Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)

v. Shareholding of Directors and Key Managerial Personnel:

Sl. No. For each of the top 10 shareholders


No. of shares % of total shares of the company No. of shares % of total shares of

the company

1 SUNIL KUMAR JUVVADI 18800 0.01 18800 0.01

2 BARMALT (INDIA) PVT LTD 18040 0.01 18040 0.01

3 NARENDRA INVESTMENTS (DELHI) LIMITED 14527 0.01 14527 0.01

4 MADHU SHEKHAR BHANDARI 12560 0.00 12560 0.00

5 INTEGRATED FINCAP PRIVATE LIMITED 8083 0.00 8083 0.00

6 SRINIVAS NAYAK P 7177 0.00 7177 0.00

7 ATUL SARIN 6989 0.00 6989 0.00

8 KAMALAKAR VASUDEO KAMAT 6847 0.00 6847 0.00

9 LEKHA PATEL 6000 0.00 6000 0.00

10 ATUL PROMOTERS PRIVATE LIMITED 5997 0.00 5997 0.00

Sl. No. For each of the directors and KMP


No. of shares % of total shares of the company No. of shares % of total shares

of the company

1 At the beginning of the year 14 0.00 14 0.00

2

Datewise increase/decrease in promoters shareholding during the year specifying the reasons for increase/decrease (eg. Allotment/transfer/bonus/sweat equity, etc)

0 0.00 0 0.00

3 At the end of the year 14 0.00 14 0.00

Particulars Secured Loans excluding deposits Unsecured Loans Deposits Total indebtedness

INDEBTEDNESS AT THE BEGINNING OF THE FINANCIAL YEAR

i) Principal Amount - 12,231,601,654 - 12,231,601,654

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - 39,819,652 39,819,652

Total (i+ii+iii) - 12,271,421,306 12,271,421,306

CHANGE IN INDEBTEDNESS DURING THE FINANCIAL YEAR

• Addition - 48,358,169,273 - 48,358,169,273

• Reduction - (44,561,535,000) - (44,561,535,000)

Net Change - 3,796,634,273 - 3,796,634,273

INDEBTEDNESS AT THE END OF THE FINANCIAL YEAR

i) Principal Amount - 15,865,474,155 - 15,865,474,155

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - 202,581,424 - 202,581,424

Total (i+ii+iii) - 16,068,055,579 16,068,055,579

V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment

(Rs.)







30

Sl. No. Particulars of Remuneration

Name of MD/WTD/Manager

Total AmountMr. Shalabh Seth Managing Director

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-Tax Act, 1961

(b) Value of perquisites u/s 17(2) of the Income-Tax Act, 1961

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

29,635,992

21,228,957

765,900

29,635,992

21,228,957

765,900

2 Stock Option 7,641,135 7,641,135

3 Sweat Equity - -

4 Commission - as % of profit - others, specify

- -

5 Others, please specify - -

Total (A) 29,635,992 29,635,992


Name of DirectorsTotal Amount

Mr. Arun Monappa Ms. Shwetambari Rao

1 INDEPENDENT DIRECTORS

Fee for attending board/committee meetings 6,00,000 8,00,000 14,00,000

Commission - - -

Others, please specify - - -

Total (1) 6,00,000 8,00,000 14,00,000

2 OTHER NON-EXECUTIVE DIRECTORS

Fee for attending board/committee meetings - - -

Commission - - -

Others, please specify - - -

Total (2) - - -

Total (B) = (1)+(2) 6,00,000 8,00,000 14,00,000

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager

B. Remuneration to other Directors

(Rs.)

(Rs.)




31


Key Managerial Personnel

TotalMr. Tejvir Singh, CFO

Mr. Sridhar SCompany Secretary

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-Tax Act, 1961

(b) Value of perquisites u/s 17(2) of the Income-Tax Act, 1961

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

11,529,497

11,529,497 - -

2,420,256

2,420,256 -

-

13,949,753

13,949,753

- -

2 Stock Option - - -

3 Sweat Equity - - -

4 Commission - as % of profit - others, specify

- - -

5 Others, please specify - - -

Total 11,529,497 2,420,256 13,949,753

Type Section of the Companies Act Brief Description

Details of Penalty/Punishment/

Compounding fees imposed

Authority [RD/NCLT/COURT]

Appeal made, if any (give Details)

A. COMPANY

Penalty - - - - -

Punishment - - - - -

Compounding - - - - -

B. DIRECTORS

Penalty - - - - -



C. OTHER OFFICERS IN DEFAULT

Penalty - - - - -



C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES

(Rs.)










32

PART “A”: SUBSIDIARIES

(Information in respect of each subsidiary to be presented with amounts in Rs.)

Notes: The following information shall be furnished at the end of the statement:-

Names of subsidiaries which are yet to commence operations1. Names of subsidiaries which have been liquidated or sold during the year2.

1. Name of the subsidiary SPR Distilleries Private Limited

2. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

31st March 2016

3. Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries

Indian Rupees

4. Share capital 20,000,000

5. Reserves & Surplus (21,201,387)

6. Total assets 1,004,829,336

7. Total liabilities 1,004,829,336

8. Investments 0

9. Turnover 0

10. Profit before taxation (500,407)

11. Provision for taxation 0

12. Profit after taxation (500,407)

13. Proposed dividend Nil

14. % of shareholding N.A.

Form AOC-1

[Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of the Companies (Accounts) Rules, 2014]

Statement Containing Salient Features of the Financial Statement of Subsidiaries/Associate Companies/Joint Ventures




33

PART “B”: ASSOCIATES AND JOINT VENTURES

[Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies]

Names of associates or joint ventures which are yet to commence operations1. Names of associates or joint ventures which have been liquidated or sold during the year2.

Name of Associates/Joint Ventures None

1. Latest Audited balance sheet date

2. Shares of Associate/Joint Ventures held by the company on the year end No.

Amount of Investment in Associates/ Joint Ventures

Extent of Holding %

3. Description of how there is significant influence

4. Reason why the associate/joint venture is not consolidated

5. Networth attributable to shareholding as per latest audited Balance Sheet

6. Profit/Loss for the year

(i) Considered in Consolidation

(ii) Not considered in Consolidation



Place: Bangalore Date: 7th June 2016







34

1. Details of contracts or arrangements or transactions not at arm’s length basis

2. Details of material contracts or arrangement or transactions at arm’s length basis



Place: Bangalore Date: 7th June 2016

(a) Name(s) of the related party and nature of relationship None

(b) Nature of contracts/arrangements/ transactions

(c) Duration of the contracts/ arrangements/transactions

(d)Salient terms of the contracts or arrangements or transactions including the value, if any

(e)Justification for entering into such contracts or arrangements or transactions

(f) Date(s) of approval by the Board

(g) Amount paid as advances, if any

(h)Date on which the special resolution was passed in general meeting as required under first proviso to section 188

(a) Name(s) of the related party and nature of relationship SABMiller Global Business Services India Private Limited – Group Company

(b) Nature of contracts/arrangements/ transactions 01. Purchase of assets on its closure of operations02. Assignment to the Company of advance paid by SABMiller Global Business Services India Private Limited to the lessor for rental premises

(c) Duration of the contracts/ arrangements/transactions NA

(d) Salient terms of the contracts or arrangements or transactions including the value, if any

Rs.1,39,70,527 and Rs.97,88,475

(e) Date(s) of approval by the Board 7th June 2016

(f) Amount paid as advances, if any Nil

Form AOC-2

[Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014]

FORM FOR DISCLOSURE OF PARTICULARS OF CONTRACTS/ ARRANGEMENTS ENTERED INTO BY THE COMPANY WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF THE COMPANIES

ACT, 2013 INCLUDING CERTAIN ARMS LENGTH TRANSACTIONS UNDER THIRD PROVISIO THERETO




35


SECRETARIAL AUDIT REPORT

[Pursuant to section 204 (1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

(FOR THE FINANCIAL YEAR ENDED 31st MARCH 2016)

The Members SABMiller India Limited Mumbai - 400059

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by SABMiller India Limited having CIN: U65990MH1988PLC049687 (“the Company”). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion there on.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on 31st March, 2016, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter;

1. We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2016, according to the provisions of:

I. The Companies Act, 2013 (the Act) and the rules made there under;

II. The Company is not a listed Company, hence the Securities Contract (Regulation) Act, 1956 (SCRA) and the Rules made there under are not applicable.

III. There were no occasions needing compliance under the Depositories Act, 1996 and the Regulations and Bye-laws framed there under; hence not applicable.

IV. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of External Commercial Borrowings;

V. There were no issues during the year which required specific compliance of the provisions of the following Acts as the Company is not a Listed Company :

(i) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

(ii) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(iii) Securities Contracts (Regulation) Act, 1956 (SCRA) and the Rules made there under.

VI. We further report that based on the clarification issued by the ICSI with respect to applicability of specific laws to the Company and based on the information received and records maintained, the Company has in our opinion, generally complied with the provisions of the following laws applicable:

a) The Statewise Excise Acts (“Abkari Acts”) of different States in which their units are situated.

b) Food Safety & Standards Act, 2006.

c) The Factories Act, 1948.

d) Legal Metrology Act, 2009

e) The Environment Protection Act, 1986

f) The Water (Prevention and control of Pollution) Act, 1974






36

g) The Air (Prevention and control of Pollution) Act, 1981

h) The Hazardous Waste (Management and Handling) Rules, 1989

VII. a. We have examined compliances with respect to the Secretarial Standards SS-1 and SS-2 issued by the ICSI and notified by the MCA and found the same to be in compliance with the requirements; and.

b. The Company is not a listed entity and as such examination and reporting of compliances under the Listing Agreements with Stock Exchanges does not arise.

VIII. The company has complied with the provisions of the Act, Rules, Regulations, Guidelines and Standards during the financial year under report.

We further report that

• TheBoardofDirectorsoftheCompanyisdulyconstitutedwith proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

• Adequatenotice isgiventoalldirectorstoscheduletheBoard Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

• MajoritydecisioniscarriedthroughandasinformedbytheCompany, there were no dissenting views of the members of the Board at any Board/Committee meeting held during the financial year.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with Labour and other applicable laws, rules, regulations and guidelines.

We further report that during the audit period the following events/actions having a bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc,

• TheCompanyhaspassedspecialresolutionattheAnnualGeneral Meeting held on 12th August 2015 with respect to the appointment of and remuneration to the Managing Director and for increase in the borrowing powers.

• TheCompanyhasadvancedloans/investmentstorelatedparties covered under Section 184 read with Section 186 of the Companies Act, 2013.

For S. Kedarnath & AssociatesS. Kedarnath

Company Secretary

Place: Bengaluru Date: 7th June 2016


Note: This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.



37

‘Annexure A’

To, The Members SABMiller India Limited Mumbai - 400059

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of secretarial Records. The verification was done on test basis to ensure that correct facts are reflected in the secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company including records under Income Tax Act, Central Excise and Customs Law, Central and State Sales Tax Laws and other financial laws .

4. Wherever required, the Company has represented about the compliance of laws, rules and regulations and happening of events etc as applicable from time to time.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of Management. Our examination was limited to the verification of procedures on test basis.

6. The secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.

For S. Kedarnath & Associates Company Secretaries

S. Kedarnath Company Secretary

C P No 4422

Place: Bengaluru Date: 7th June 2016



Auditors’ ReportIndependent Auditors' Report To the Members of SABMiller India Limited

Report on the standalone financial statements

We have audited the accompanying standalone financial statements of SABMiller India Limited (“the Company”) which comprise the balance sheet as at 31 March 2016, the statement of profit and loss, the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the standalone financial statements

The Company’s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016, and its loss and its cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in ‘Annexure A’, a statement on the matters specified in paragraph 3 and 4 of the Order.





38


Auditors’ Report continued

2. As required by Section 143 (3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the balance sheet, the statement of profit and loss, and the cash flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) on the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors are disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and operating effectiveness of such controls, refer to our separate report in ‘Annexure B’; and

(g) with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements – Refer Note 2.25 and 2.35 to the financial statements;

ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, including

derivative contracts – Refer Note 2.38 to the standalone financial statements; and

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

for B S R & Co. LLP Chartered Accountants Firm registration number: 101248W/ W-100022

Supreet Sachdev Partner Membership No. 205385

Bangalore Date: 7 June 2016

Annexure - A to the Independent Auditor’s Report

The Annexure referred to in the Independent Auditor’s Report to the Members of SABMiller India Limited (“the Company”) for the year ended 31 March 2016, we report that:

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except as stated in Note 2.10 (iii).

ii. The inventory, except for goods-in-transit and stock lying with third parties, has been physically verified by the


39



management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained.

iii. The Company has granted loans to two companies covered in the register maintained under Section 189 of the Companies Act, 2013 (“the Act”).

(a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the companies listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.

(b) In the case of loan granted to the companies listed in the register maintained under Section 189 of the Act, the borrower has been regular in repaying the principal amount as stipulated and in the payment of interest.

(c) There are no overdue amounts in respect of the loan granted to a companies listed in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

v. The Company has not accepted any deposits from the public.

vi. The Central Government has not prescribed the maintenance of cost records under Section 148 (1) of the Act for any of the services rendered by the Company.

vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities though there have been delays in a few cases.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income-tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and other material statutory dues were in arrears as at 31 March 2016, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the following dues of Income-tax, Sales Tax, Service Tax, Entry Tax, Duty of Customs, Duty of Excise and Value Added Tax have not been deposited by the Company on account of disputes:





40



Name of the Statute

Nature of the Dues Amount (Rs.)Period to which the amount relates

Forum where dispute is pending

Punjab Excise Act, 1914 Duty on beer loss 10,318,746 1973-74 to 1990-91 Financial Commissioner

(Appeals) , Haryana

Orissa and Bihar Excise Act, 1965

Interest on Excise Loan Draw Back scheme 3,222,705 1988-89 Orissa High Court

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

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

Overtime wages of excise staff 1,127,231 2005-06 Orissa High Court

Bottling fees 47,370,838 2008-09 to 2015-16 Orissa High Court

Bombay Prohibition Act, 1949

Supervision charges of excise staff 550,930 1983-84 to 1988-89 Bombay High Court

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

Orissa Sales Tax Act, 1947 Sales Tax 35,029,024 1994-95 to 2000-01 Sales Tax Tribunal, Orissa

Orissa Entry Tax Act, 1999 Sales Tax 242,508 2000-01 Sales Tax Tribunal, Orissa

Delhi Sales Tax Act, 1975

Sales Tax 576,486 2002-03Assistant Commissioner of Commercial Taxes (Appeals), New Delhi

Sales Tax 217,200,913 2007-08Additional Commissioner-II, Department of Trade & Taxes, New Delhi

Bombay Sales Tax Act, 1959

Sales Tax 1,514,943 1992-93 Trade Tax Tribunal, Maharashtra

Sales Tax 3,639,154 1995-96 Sales Tax Tribunal, Maharashtra


Bombay Sales Tax Act, 1959 & Central Sales Tax Act, 1956


Sales Tax 4,334,290 2002-03 Joint Commissioner (Appeals), Mumbai

Pondicherry General Sales Tax Act, 1967 Sales Tax 11,982,000 1981-82 to 1984-85,

1997-98 to 1998-99Assessing Authority, Pondicherry

Haryana Sales Tax Act, 1973 Sales Tax 754,349 1989-90 to 2002-03 Joint Excise and Taxation

Commissioner (Appeals)


41



Name of the Statute

Nature of the Dues Amount (Rs.)Period to which the amount relates

Forum where dispute is pending

The Madhya Pradesh Value Added Tax Act, 2002

Sales Tax 383,506,898 2008-09 to 2012-13Additional Commissioner, Commercial Taxes (Appeals), Gwalior

Entry Tax 1,111,960 2008-09Additional Commissioner (Appeals), Gwalior

Uttar Pradesh Tax on Entry of Goods Act, 2000

Entry Tax 2,000,117 2005-06 Uttar Pradesh High Court

Entry Tax 690,569 2008-09Additional Commissioner (Appeals)

Maharashtra Value Added Tax Act, 2002

Value Added Tax 1,282,180 2008-09Joint Commissioner of Sales Tax (Appeals), Aurangabad

Value Added Tax 74,096,742 2005-06 to 2008-09Joint Commissioner (Appeals), Aurangabad

Value Added Tax 66,815,3102005-06 to 2007-08; 2009-10 to 2010-11

Joint Commissioner (Appeals), Aurangabad

Andhra Pradesh Value Added Tax, 2005

Value Added Tax 24,418,480 2010-11 to 2012-13Joint Commissioner (Appeals), Andhra Pradesh

West Bengal Value Added Tax Act, 2003

Value Added Tax 429,000 2009-10Joint Commissioner of Commercial Tax, Kolkata

Haryana Local Area Development Tax Act, 2000

Local Area Development Tax

10,050,426 2000-01 to 2003-04 Joint Excise and Taxation Commissioner (Appeals)

Finance Act, 1994

Service Tax and penalty 236,270,548 2009-10 to 2012-13

Bombay High Court and Mumbai Customs, Excise and Service Tax Appellate Tribunal (CESTAT)

Service Tax and penalty 224,456,392 2005-06 to 2007-08 Karnataka High Court

Service Tax and penalty 400,760,640 2005-06 to 2009-10Customs Excise and Service Tax Appellate Tribunal, Bangalore

Customs Act, 1962 Customs Duty 161,555 2007-08Customs Excise and Service Tax Appellate Tribunal, Mumbai

Income-tax Act, 1961

Fringe benefit tax 40,808,341 2006-07Commissioner of Income tax (Appeals)

Income-tax 105,728,632 2007-08Income Tax Appellate Tribunal, Mumbai

Income-tax 63,295,869 2008-09Income Tax Appellate Tribunal, Mumbai

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





42



viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers and financial institutions. The Company did not have any outstanding dues to any debenture holders during the year.

ix. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order in not applicable.

x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and bases on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.




Annexure - B to the Auditor’s Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of SABMiller India Limited (“the Company”) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


43



Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the

transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.








44


Balance sheet (Rs.)

Note As at 31 March 2016 As at 31 March 2015

EQUITY AND LIABILITIES

Shareholders' funds

Share capital 2.1 3,131,707,360 3,131,707,360

Reserves and surplus 2.2 1,225,378,274 1,699,030,559

4,357,085,634 4,830,737,919

Deferred government grants 2.41 131,433,831 144,348,809

Non-current liabilities

Long-term borrowings 2.3 7,378,130,652 3,981,601,654

Other long-term liabilities 2.4 116,968,842 152,961,656

Long-term provisions 2.5 244,023,106 216,938,587

7,739,122,600 4,351,501,897

Current liabilities

Short-term borrowings 2.6 6,543,694,585 8,250,000,000

Trade payables 2.7 2,083,077,389 1,902,732,743

Other current liabilities 2.8 6,314,048,682 3,961,560,201

Short-term provisions 2.9 607,499,652 561,593,328

15,548,320,308 14,675,886,272

27,775,962,373 24,002,474,897

ASSETS

Non-current assets

Fixed assets

Tangible assets 2.10 8,459,991,261 8,607,378,642

Intangible assets 2.10 1,729,277,457 1,905,701,799

Capital work-in-progress 981,795,287 435,400,751

11,171,064,005 10,948,481,192

Non-current investments 2.11 25,120,873 2,282,873

Long-term loans and advances 2.12 1,440,893,261 597,468,549

Other non-current assets 2.13 738,603,961 505,124,425

13,375,682,100 12,053,357,039

Current assets

Inventories 2.14 3,170,219,987 3,677,053,126

Trade receivables 2.15 9,006,162,746 6,006,868,669

Cash and bank balances 2.16 365,576,158 671,852,758

Short-term loans and advances 2.17 1,618,253,228 1,450,678,369

Other current assets 2.18 240,068,154 142,664,936

14,400,280,273 11,949,117,858

27,775,962,373 24,002,474,897

Significant accounting policies 1

The notes referred to above form an integral part of the financial statements

As per our report of even date attached

for B S R & Co. LLP for SABMiller India Limited

Chartered Accountants

Firm registration number: 101248W/ W-100022

Supreet Sachdev Shalabh Seth Ari Mervis

Partner Managing Director Director

Membership No. 205385 DIN: 07034749 DIN: 01892065

Bangalore tejvir Singh Sridhar S

Date: 7 June 2016 Chief Financial Officer Company Secretary

Bangalore

Date: 7 June 2016


45


Statement of profit and loss(Rs.)

Note For the year ended

31 March 2016For the year ended

31 March 2015

Income

Revenue from operations

Sale of products, gross

Sale of manufactured goods, gross 35,985,661,562 34,119,273,692

Less: Excise duty (17,399,715,916) (16,536,336,086)

Sale of manufactured goods, net 18,585,945,646 17,582,937,606

Sale of traded goods 1,199,928,806 813,349,181

Sale of products, net 19,785,874,452 18,396,286,787

Other operating revenues 2.19 1,091,221,229 1,000,700,707

20,877,095,681 19,396,987,494

Other income 2.20 160,640,729 68,609,620

21,037,736,410 19,465,597,114

Expenses

Cost of materials consumed 8,837,193,822 8,819,193,352

Purchase of stock-in-trade 738,059,596 424,755,714

Changes in inventories of finished goods, work-in-progress and traded goods

2.21 288,144,129 (172,693,746)

Employee benefits expense 2.22 1,722,428,762 1,660,996,143

Finance cost 2.23 1,110,663,403 1,031,627,328

Depreciation and amortisation 2.10 1,214,765,617 1,146,371,521

Other expenses 2.24 7,600,133,366 7,828,934,872

21,511,388,695 20,739,185,184

(Loss) before tax (473,652,285) (1,273,588,070)

Tax expense:

- current tax - -

- deferred tax (credit)/ charge 2.37 - -

(Loss) for the year (473,652,285) (1,273,588,070)

Earnings per equity share (par value; Rs. 10 each)

-Basic and diluted 2.29 (1.51) (4.07)




for B S R & Co. LLP for SABMiller India Limited Chartered Accountants Firm registration number: 101248W/ W-100022 Supreet Sachdev Shalabh Seth Ari Mervis Partner Managing Director Director Membership No. 205385 DIN: 07034749 DIN: 01892065 Bangalore

Date: 7 June 2016 tejvir Singh Sridhar S

Chief Financial Officer Company Secretary

Bangalore

Date: 7 June 2016





46


Cash flow statement (Rs.)

For the year ended

31 March 2016For the year ended

31 March 2015

Cash flows from operating activities

(Loss) before tax (473,652,285) (1,273,588,070)

Adjustments:

Depreciation and amortisation 1,214,765,617 1,146,371,521

Release of deferred government grants (12,914,978) (20,753,497)

Dividend income - (23,359)

Interest and financing charges, excluding bank charges 1,106,527,772 1,025,934,114

Interest income (57,046,829) (28,258,568)

Profit on sale of fixed assets (28,897,775) (17,623,787)

Impairment of capital work-in-progress [refer to note 2.24] - 158,797,020

Unrealised foreign exchange difference 8,601,898 (16,360,826)

Operating cash flows before working capital changes 1,757,383,420 974,494,548

Decrease/ (increase) in inventories 506,833,139 (230,888,908)

(Increase)/ decrease in trade receivables (2,999,294,077) 178,751,943

(Increase)/ decrease in loans and advances (437,060,834) 79,137,503

Decrease in bank balances (other than cash and cash equivalents) 6,206,213 2,487,270

Increase in liabilities and provisions 386,890,657 332,774,563

Cash (used in)/ generated from operations (779,041,482) 1,336,756,919

Taxes paid, net of refund (42,615,104) (30,673,833)

Net cash (used in)/ provided by operating activities a (821,656,586) 1,306,083,086

Cash flows from investing activities

Purchase of fixed assets (1,550,619,391) (1,107,743,789)

Receipt of government grant - 53,138,000

Proceeds from sale of fixed assets 94,674,792 12,959,416

Dividend income - 23,359

Loans given to related parties (refer note 2.36), net (597,572,436) -

Interest received 56,701,245 31,839,818

Advance for purchase of trade investment refunded/ (given) 30,002,000 (50,000,000)

Purchase of investments, net (2,840,000) -

Net cash used in investing activities b (1,969,653,790) (1,059,783,196)

Cash flows from financing activities

Proceeds from borrowings, net 3,443,325,542 1,221,376,738

Interest and financing charges paid (1,031,045,290) (946,535,172)

Net cash provided by financing activities c 2,412,280,252 274,841,566

Effect of exchange rate changes on cash and cash equivalents d 818,085 2,919,372

Net (decrease)/ increase in cash and cash equivalents e=a+b+c+d (378,212,039) 524,060,828

Cash & cash equivalents at the beginning of the year (refer note below) f 555,790,292 31,729,464

Cash & cash equivalents at the end of the year (refer note below) g = e + f 177,578,253 555,790,292


47


Cash flow statement continued Note: Components of cash and cash equivalents

Cash and cash equivalents (refer note 2.16) 365,576,158 671,852,758

Book overdraft (refer note 2.8) (187,997,905) (116,062,466)

177,578,253 555,790,292









Bangalore

Date: 7 June 2016

tejvir Singh Sridhar S


Bangalore

Date: 7 June 2016





48



49

1. Significant accounting policies

Background

SABMiller India Limited (“the Company”), formerly SKOL Breweries Limited, was incorporated as a private limited com-pany under the Companies Act, 1956 on 18 November 1988. With effect from 22 June 2012 the name of the Company was changed from SKOL Breweries Limited to SABMiller India Limited. The Company is primarily engaged in the business of brewing, packaging, distribution, marketing and sale of beer.

1.1 Basis of preparation

These financial statements are prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules,2014, the provisions of the Act (to the extent notified and applicable) and guidelines issued by the Securities and Exchange Board of India (SEBI).

1.2 going concern

These financial statements have been prepared on a going concern basis, notwithstanding accumulated losses and reliance on short term borrowings due to the following considerations:

- Expected steady future growth reflected in financial projections prepared by the management;

- Expected continual technical and financial support by the SABMiller group; and

- Subsequent renewal of short-term borrowings from banks.

These financial statements, therefore, do not include any adjustments relating to recoverability and classification of asset amounts or to classification and amount of liabilities that may be necessary if the Company was unable to continue as a going concern.

1.3 use of estimates

The preparation of financial statements in conformity with

generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the results of operations during the reporting period end. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

1.4 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably.

(i) Sale of goods

Revenue from sale of manufactured and traded goods is recognised on transfer of all the significant risks and rewards of ownership to the buyer which normally takes place on dispatch of goods. The amount recognised as sale is net of sales tax, sales returns and trade discount. Sales are presented both gross and net of excise duty.

(ii) Income from contract bottling

Income from contract bottling is recognised when the right to receive bottling fee is established which normally takes place on dispatch of goods by contract bottlers to its customers.

(iii) Interest

Interest income is recognised using the time proportion basis taking into account the amount outstanding and the interest rate applicable.

(iv) Sale of spent malt and scrap

Revenue from sale of spent malt and scrap is recognised on transfer of all the significant risks and rewards of ownership to the buyer which normally takes place on dispatch of goods. The amount recognised as sale is net of sales tax and sales returns.

Notes to the financial statements






50

1. Significant accounting policies continued

The Company estimates the useful lives for fixed assets as follows:

Class of assets Number of years

Buildings 5-28

Plant and machinery

- Brewing plant and vessels 20

- Packing plant 15

- Chillers 5

- Others 14-18

Computer equipment 4

Furniture and fixtures 6

Office equipment 6

Motor vehicles 5

Brands 20

Computer software 4


1.5 fixed assets

Fixed assets are carried at cost of acquisition or construction less accumulated depreciation and provision for impairment of assets. The cost of fixed assets includes freight, duties, taxes and other incidental expenses related to the acquisition or construction of the respective assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised to the extent they relate to the period till such assets are ready to be put to use. Intangible assets are recorded at their acquisition cost.

The costs of the fixed assets, which are not ready for their intended use on such date, are disclosed as capital work-in-progress.

1.6 depreciation

Depreciation on tangible assets provided on the straight-line method over the useful life of assets estimated by the Company. Depreciation for assets purchased/ sold during a period is proportionately charged. Intangible assets are amortised over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use.

The Company believes that the useful lives as given above best represent the useful lives of these assets based on internal assessment and supported by technical advice where necessary which is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013.

Freehold land is not depreciated. Leasehold land is amortised over the lease term. Leasehold improvements are amortised over the lease term or its estimated useful life of 5 years, whichever is lower.

Assets, costing individually Rs 5,000 or less, are depreciated in full in the year of purchase.

The useful life of brands, which primarily represent brands purchased, have been determined based on management’s assessment of market conditions in India, intent to use and ability to maintain these assets, previous history of these brands and internationally accepted practices.

1.7 Impairment

The Company periodically assesses whether there is any indication that an asset or a group of assets comprising a cash generating unit may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. For an asset or group of assets that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of profit and loss. The recoverable amount is higher of the asset’s net selling price and value in use.

After recognition of impairment loss, depreciation is provided on the revised carrying amount of the asset, less its residual value (if any), over its remaining useful life.

If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer



51

Raw materials, packing materials, stores and spares and traded goods

- First-in-first-out (‘FIFO’) method

Work-in-progress and finished goods (including goods in transit)

- FIFO method. Production overheads are allocated on the basis of normal capacity of production facilities

exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. An impairment loss is reversed only to the extent that the carrying amount of asset does not exceed the net book value that would have been determined, if no impairment loss had been recognised.

1.8 Borrowing costs

Borrowing costs directly attributable to acquisition or construction of those fixed assets, which necessarily take a substantial period of time to get ready for their intended use, are capitalised. Other borrowing costs are accounted as an expense.

1.9 Investments

Long-term investments are carried at cost less any other-than-temporary diminution in the value, as determined by management on commercial consideration determined separately for each individual investment.

1.10 Inventories

Inventories are valued at lower of cost or net realisable value. Cost of inventories comprises purchase price, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

The methods of determination of cost of various categories of inventories are as follows:

Maintenance spares, which are in regular use and are not an integral part of any fixed asset, are treated as inventory and valued at cost

The comparison of cost and net realisable value is made on an item-by-item basis. The net realisable value of work-in-progress is determined with reference to the selling prices of related finished goods in the ordinary course of business, less estimated cost of completion and estimated costs necessary to make the sale. Raw materials, packing materials and other supplies held for use in production of inventories are not written below cost except in cases where material prices have declined, and it is estimated that the cost of the finished products will exceed their net realisable value.

1.11 foreign exchange

Foreign exchange transactions are recorded at the rates of exchange prevailing on the date of the respective transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss for the year.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rate on that date and the resultant exchange differences are recognised in the statement of profit and loss.

Forward contracts and other derivatives are entered into to hedge the foreign currency risk of the underlying outstanding at the balance sheet date. The premium or discount on all such contracts arising at the inception of each contract is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as income or as expense for the period.

The exchange difference on the forward exchange contract entered into to hedge the foreign currency risk of the underlying outstanding at the balance sheet date, is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange








52

differences are recognised in the statement of profit and loss in the reporting period in which the exchange rates change.

For forward exchange contracts and other derivatives that are not covered by AS 11 – ‘The Effects of Changes in Foreign Exchange Rates’ and that relate to a firm commitment or highly probable forecast transactions, the Company has adopted the principles of AS 30 - ‘Financial Instruments: Recognition and Measurement’ with effect from 1 April 2008. Derivative instruments that relate to a firm commitment or a highly probable forecast transaction have been recorded at fair value at the reporting date and the resultant exchange loss/ gain has been debited/ credited to statement of profit and loss for the year.

1.12 employee benefits

(i) Contributions to provident fund, which is a defined contribution scheme, are charged to the statement of profit and loss on an accrual basis.

(ii) The Company has an arrangement with Life Insurance Corporation of India to administer its superannuation scheme, which is a defined contribution scheme. The contributions to the said scheme are charged to the statement of profit and loss on an accrual basis.

(iii) Gratuity, which is a defined benefit scheme, is provided for based on an actuarial valuation carried out by an independent actuary as at the balance sheet date. Actuarial gains/ losses are recognised immediately in the statement of profit and loss and are not deferred. The Company makes contributions towards gratuity into the approved gratuity fund administered by Life Insurance Corporation of India. Only such changes in legislation are taken into account while providing for gratuity that has been enacted up to the balance sheet date.

(iv) Compensated absences are provided for based on an actuarial valuation carried out by an independent actuary as at the balance sheet date.

1.13 Leases

Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased asset are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.

1.14 Provisions and contingent liabilities

The Company recognises a provision when there is a present obligation as a result of an obligating event that probably requires outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure of a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on a reliable estimate of such obligation.

1.15 taxation

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the Income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carried forward business loss under taxation laws,





53

deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets.

Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realised.

The Company offsets, the current (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

Minimum Alternative Tax (‘MAT’) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income-tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India (‘ICAI’), the said asset is created by way of a credit to the statement of profit and loss. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income-tax during the specified period.

1.16 earnings per share

The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. The number of equity shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares, which would have been issued on conversion of all potentially dilutive equity shares. Potential dilutive equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. The potentially dilutive equity shares have been adjusted for the proceeds receivable had the shares been actually issued at a fair value (i.e. the average market value of the outstanding shares). In computing the dilutive

earnings per share, only potential equity shares that are dilutive and that either reduces the earnings per share or increases loss per share are included.

1.17 employee stock compensation cost

The Company applies intrinsic value method of accounting for stock options granted by the ultimate holding company to the employees of the Company after 1 April 2005. The intrinsic value of the employee services received in exchange for the grant of such options is recognised as an expense. The amount recognised is spread over the vesting period which is also the period over which some of the scheme performance criteria relate. At each balance sheet date, the estimates of the number of options that are expected to become exercisable are revised. It recognises the impact of the revision of the original estimates, if any, in the statement of profit and loss over the remaining vesting period. The effect of uncertainty as to whether any performance criteria of share options will be met is dealt with by estimating the probability of shares vesting and therefore the cost is adjusted and readjusted for the probability of vesting in the vesting period.

1.18 Cash flow statement

Cash flows are reported using the indirect method, whereby the net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

1.19 government grants

Government grants are recognised under the income approach as per AS 12 – “Accounting for Government Grants” specified under Companies (Accounting Standard) Rules, 2006.

Grants related to depreciable assets are treated as deferred income which is recognised in the statement of profit and loss on a systematic and rational basis over the useful life of such assets. Grants related to non-depreciable assets are credited to capital reserve.




(Rs.)

2.1 Share capital As at 31 March 2016

As at 31 March 2015

Authorised

320,000,000 (previous year: 320,000,000) equity shares of Rs. 10 each 3,200,000,000 3,200,000,000

3,200,000,000 3,200,000,000

Issued, subscribed and paid-up

313,170,736 (previous year: 313,170,736) equity shares of Rs. 10 each fully paid up

3,131,707,360 3,131,707,360

3,131,707,360 3,131,707,360

(a) Reconciliation of the number of shares outstanding at the beginning and at the end of the year

Name of the share holder As at 31 March 2016 As at 31 March 2015

No. of shares Amount (Rs.) No. of shares Amount (Rs.)

Equity shares

At the commencement of the year 313,170,736 3,131,707,360 313,170,736 3,131,707,360

Add: Issued during the year - - - -

At the end of the year 313,170,736 3,131,707,360 313,170,736 3,131,707,360

(d) List of persons holding more than 5 percent shares in the Company


No. of shares % holding No. of shares % holding

Equity shares

SABMiller Asia BV 162,086,038 51.76 162,086,038 51.76

SABMiller Breweries Private Limited 142,075,317 45.37 142,070,329 45.37

(b) Rights, preferences and restrictions attached to equity shares

The Company has issued only one class of equity shares having a par value of Rs. 10 each. All equity shares rank equally with regard to dividends and share in the Company’s residual assets. Each holder of equity shares is entitled to one vote per share.

(c) Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates


Equity shares of Rs. 10 each, fully paid-up

I) SABMiller Asia BV 162,086,038 162,086,038

II) Step-down subsidiaries of SABMiller plc, the ultimate holding company, other than at I above

- SABMiller Breweries Private Limited 142,075,317 142,070,329

- SABMiller India Holdings 5,590,817 5,590,817

- Austindia Pty Ltd 1,651,174 1,651,174





54

2. Notes to the financial statements


(Rs.)

2.2 Reserves and surplus As at 31 March 2016

As at 31 March 2015

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

Securities premium account 9,576,907,748 9,576,907,748

Amalgamation adjustment reserve/ (deficit) account (1,029,743,130) (1,029,743,130)

General reserve 1,218,399,316 1,218,399,316

(Deficit) in the statement of profit and loss

Opening balance (8,068,533,375) (6,794,945,305)

Add: (Loss) for the year (473,652,285) (1,273,588,070)

(8,542,185,660) (8,068,533,375)

1,225,378,274 1,699,030,559

(Rs.)

2.3 Long-term borrowings As at 31 March 2016

As at 31 March 2015

Unsecured

Term loans

Loans and advances from related parties (refer to note 2.36)

- External commercial borrowings 7,287,225,000 3,896,044,402

- Others 90,905,652 85,557,252

7,378,130,652 3,981,601,654

(a) terms of repayment :

Particulars Repayment terms Interest rate Currency swap premium

External commercial borrowings from related party (SABMiller Asia BV)

Repayable in a single bullet payment at the end of the term for each drawdown. Refer to table below for year-wise details on amount repayable.

LIBOR + 60 to 235 basis points (previous year: LIBOR + 60 to 150 basis points)

4.42% to 7.33% (previous year: 6.45% to 7.33%)

Other loans and advances from related party (SKOL Beer Manu-facturing Company Limited)

Not repayable before 1 April 2018 9% per annum -

(e) Number of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash / issued as bonus shares / bought back (during five years immediately preceding 31 March 2016)

31 March 2016 31 March 2015 31 March 2014 31 March 2013 31 March 2012

Equity shares allotted pursuant to a contract

- - - 7,241,991 -

Bonus shares issued - - - - -

Equity shares bought back - - - - -


55



(b) There have been no defaults in repayment of principal and interest as at 31 March 2016 (previous year: Nil). (c) The Company has entered into an interest rate swap arrangement during the year ended 31 March 2016 to pay fixed interest in the range of 2.40% - 3.18% per annum and receive floating LIBOR with a spread ranging from 0.60% - 2.35% per annum in relation to its ECB from related party.

(Rs.)

2.4 Other long-term liabilities As at 31 March 2016

As at 31 March 2015

Deposits from customers and del-credere agents 94,390,001 142,790,061

Deposits received from contract bottlers 10,000,000 -

Deferred revenue 12,578,841 10,171,595

116,968,842 152,961,656

(Rs.)

2.5 Long-term provisions As at 31 March 2016

As at 31 March 2015

Provision for gratuity (refer to note 2.33) 172,378,202 159,657,312

Provision for compensated absences 71,644,904 57,281,275

244,023,106 216,938,587

(Rs.)

Due for repayment in financial year As at 31 March 2016 As at 31 March 2015

ECB from related party (SABMiller Asia BV)

2016-17 * 1,943,648,917 1,833,626,902

2018-19 993,712,500 937,462,500

2019-20 1,192,455,000 1,124,955,000

2020-21 1,788,682,500 -

2022-23 3,312,375,000 -

* Balance as at 31 March 2016 has been disclosed under current maturities of long-term debt (refer to note 2.8).





56



(Rs.)

2.7 Trade payables As at 31 March 2016

As at 31 March 2015

- Due to micro and small enterprises (refer to note 2.40) 16,695,157 21,639,708

- Due to other creditors 1,671,725,847 1,656,020,428

- Acceptances 394,656,385 225,072,607

2,083,077,389 1,902,732,743

(Rs.)

2.6 Short-term borrowings As at 31 March 2016

As at 31 March 2015

Loan repayable on demand

Unsecured

- from banks

- bank overdraft 693,694,585 -

Other loans and advances

Unsecured

Working capital loans

- from banks 1,850,000,000 5,250,000,000

- from financial institution 1,000,000,000 -

Commercial paper issued to related party (refer note 2.36) - 3,000,000,000

Commercial paper issued to financial institutions 3,000,000,000 -

6,543,694,585 8,250,000,000

(a) Working capital loans from banks and financial institutions are due for repayment or renewal within a period of 12 months.

(b) There has been no defaults in repayment of principal and interest as at 31 March 2016 (previous year: Nil).

(c) Commercial paper having face value of Rs. 3,000,000,000 (previous year: Rs 3,000,000,000) have been issued at a discount of 8.15%

- 8.80% (previous year: 8.55%). The maturity dates of the commercial papers are 22 June 2016 and 23 June 2016 for Rs. 2,000,000,000

and Rs. 1,000,000,000 respectively (previous year: 20 October 2015 for Rs. 3,000,000,000).


57



(Rs.)

2.8 Other current liabilities As at 31 March 2016

As at 31 March 2015

Current maturities of long term debts (refer to notes 2.3 and 2.36) 1,943,648,917 -

Interest accrued but not due on borrowings 202,581,424 39,819,652

Payable to related parties for expenses (refer to note 2.36) 160,259,265 162,268,123

Book overdraft 187,997,905 116,062,466

Deposits from customers - 14,256,401

Excise duty payable 526,410,335 770,017,594

Other liabilities

- statutory dues 507,627,710 311,273,588

- creditors for capital goods 155,534,009 152,867,337

- deferred revenue 11,907,021 8,303,208

- for expenses 2,618,082,096 2,386,691,832

6,314,048,682 3,961,560,201

(Rs.)

2.9 Short-term provisions As at 31 March 2016

As at 31 March 2015

Provision for compensated absences 12,529,203 11,131,908

Provision for claims (refer to note 2.35) 570,110,536 525,601,507

Provision for fringe benefit tax (net of advance tax) 5,047,648 5,047,648

Provision for income-tax (net of advance tax and tax deducted at source) 19,812,265 19,812,265

607,499,652 561,593,328





58



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766)

As a

t 31

Mar

ch 2

016

- 1

3,24

1,85

5 9

,698

,369

8

55,9

10,6

37

6,0

91,8

76,1

16

114

,059

,464

6

7,33

7,73

1 3

5,69

6,44

8 7

,518

,774

7

,195

,339

,391

1,

741,

089,

688

175

,165

,529

1,

916,

255,

217

9,11

1,59

4,60

8

Prov

isio

n fo

r im

pairm

ent

As a

t 1 A

pril

2014

2

7,00

0,00

0 2

2,45

8,96

6 -

10,

043,

449

72,

835,

054

860

,707

-

787

,113

2

37,3

38

134

,222

,627

-

- -

134,

222,

627

Char

ge/ (

reve

rsal

) dur

ing

the

year

(ref

er to

not

e ii)

(16,

600,

000)

- -

(10,

043,

449)

(72,

835,

054)

(860

,707

) -

(787

,113

) (2

37,3

38)

(101

,363

,661

) -

- -

(101

,363

,661

)

As a

t 1 A

pril

2015

1

0,40

0,00

0 2

2,45

8,96

6 -

- -

- -

- -

32,

858,

966

- -

- 32

,858

,966

Char

ge/ (

reve

rsal

) du

ring

the

year

- -

- -

- -

- -

- -

- -

- -

As a

t 31

Mar

ch 2

016

10,

400,

000

22,

458,

966

- -

- -

- -

- 3

2,85

8,96

6 -

- -

32,8

58,9

66

Net b

lock

As o

n 31

Mar

ch 2

016

332,

161,

792

24,

483,

605

- 2,

115,

339,

478

5,77

0,06

3,13

0 9

7,40

0,95

1 6

4,39

0,06

2 4

3,82

9,30

2 1

2,32

2,93

8 8

,459

,991

,261

1,

669,

830,

557

59,

446,

900

1,72

9,27

7,45

7 10

,189

,268

,719

As o

n 31

Mar

ch 2

015

378

,346

,807

2

5,22

4,92

9 4

,421

,710

2

,102

,130

,092

6

,054

,311

,110

8

73,0

94

5,2

81,7

55

27,

684,

243

9,1

04,9

02

8,6

07,3

78,6

42

1,8

37,7

64,8

24

67,

936,

975

1,9

05,7

01,7

99

10,

513,

080,

441

Note

s:

(i)

The

com

pany

doe

s no

t hav

e an

y as

set p

urch

ased

on

finan

ce le

ase.

(ii)

Durin

g th

e ye

ar e

nded

31

Mar

ch 2

015,

the

Com

pany

sol

d its

ass

ets

at o

ne o

f its

non

-ope

ratio

nal b

rew

ery,

whi

ch w

as im

paire

d, fo

r a to

tal

cons

ider

atio

n of

Rs.

5,0

00,0

00. A

ccor

ding

ly, th

e pr

ovis

ion

for i

mpa

irmen

t for

thes

e as

sets

hav

e be

en re

vers

ed/ d

elet

ed.

(iii)

Title

dee

ds o

f im

mov

able

pro

pert

ies

of c

erta

in p

arce

ls o

f lan

d ar

e he

ld in

the

nam

e of

ers

twhi

le e

ntiti

es w

hich

wer

e am

alga

mat

ed w

ith th

e Co

mpa

ny o

ver t

ime

as p

art o

f acq

uisi

tion.

Titl

e de

eds

of c

erta

in p

arce

ls o

f lan

d w

hich

wer

e ac

quire

d pu

rsua

nt to

sch

eme

of a

rran

gem

ent a

re

curr

ently

not

in p

osse

ssio

n w

ith th

e m

anag

emen

t.


59






60

(Rs.)

2.11 Non-current investments As at 31 March 2016

As at 31 March 2015

trade, at cost

Investment in equity shares - unquoted

-Subsidiary

1,999,800 (previous year: Nil) fully paid up equity shares of Rs. 10 each in SPR Distilleries Private Limited

19,998,000 -

19,998,000 -

Non-trade, at cost


80,000 (previous year: 80,000) fully paid up equity shares of Rs. 3 (previous year: Rs. 3) each in Vulcan Leasing and Investments Limited

80,000 80,000

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

29,500 29,500

109,500 109,500

Less: Provision for, other than temporary, diminution in the value of investments

(109,500) (109,500)

- -

Investments in government or trust securities - unquoted

National Savings Certificates 2,256,323 2,256,323

Indira Vikas Patra 26,550 26,550

2,282,873 2,282,873

Investment in bonds - quoted

2 units of 8% bonds of Gujarat Urja Vikas Nigam Limited of face value Rs. 70,000 each

140,000 -

70 units of 9.95% bonds of State Bank of India of face value Rs. 10,000 each 700,000 -

1 unit of 8.75% bond of Oriental Bank of Commerce of face value Rs. 1,000,000

1,000,000 -

1 unit of 8.70% bond of Power Finance Corporation Limited of face value Rs. 1,000,000

1,000,000 -

2,840,000 -

25,120,873 2,282,873

Aggregate market value of quoted investments 2,840,000 -

Aggregate provision for diminution in value of investments (109,500) (109,500)




61

(Rs.)

2.12 Long-term loans and advances As at 31 March 2016

As at 31 March 2015

Unsecured, considered good

Advance for purchase of shares (trade investment) - 50,000,000

Capital advances 77,908,254 35,239,922

Security deposits 127,757,749 98,670,625

Rental deposits 39,217,051 33,150,420

Advance tax and tax deducted at source (net of provision for income-tax) 244,399,330 201,784,226

Fringe benefit tax (net of provision for fringe benefit tax) 1,973,463 1,973,463

Minimum alternate tax credit entitlement 3,250,000 3,250,000

Loans and advances to related parties (refer to notes 2.36 and 2.43) 599,039,089 1,466,653

Advance to contract bottler 301,984,876 131,250,000


- Prepaid expenses 5,818,438 6,133,034

- Others 39,545,011 34,550,206

1,440,893,261 597,468,549

Unsecured, considered doubtful

Advance to contract bottler 65,000,000 -

Other loans and advances 87,666,065 87,410,130

152,666,065 87,410,130

Less: Provision for doubtful loans and advances (152,666,065) (87,410,130)

- -

1,440,893,261 597,468,549

(Rs.)

2.13 Other non-current assets As at 31 March 2016

As at 31 March 2015


Deposit made under protest 460,761,574 401,498,855

Derivative financial assets 257,190,000 76,766,970

Balances with banks

- in current account * - 5,161,504

- in margin money deposit accounts maturing after 12 months 20,652,387 21,697,096

738,603,961 505,124,425

* Out of the amounts held in current account, Nil (previous year: Rs 5,161,504) is held under lien by government authorities.







62

(Rs.)

2.15 Trade receivables As at 31 March 2016

As at 31 March 2015

Unsecured

Outstanding for a period exceeding six months

Considered good - -

Considered doubtful 619,812,901 571,191,526

Less: Provision for doubtful debts (619,812,901) (571,191,526)

- -

Others

Considered good 9,006,162,746 6,006,868,669

Considered doubtful 84,261,279 -

9,090,424,025 6,006,868,669

Less: Provision for doubtful debts (84,261,279) -

9,006,162,746 6,006,868,669

9,006,162,746 6,006,868,669

(Rs.)

2.16 Cash and bank balances As at 31 March 2016

As at 31 March 2015

Cash and cash equivalents

Balances with banks

- in current accounts 351,123,879 650,504,390

- in exchange earners foreign currency account 14,452,279 21,348,368

365,576,158 671,852,758

(Rs.)

2.14 Inventories As at 31 March 2016

As at 31 March 2015

Raw materials 1,445,521,698 1,451,285,592

Goods-in-transit (raw materials) 19,546,723 22,775,983

Work-in-progress 236,684,611 236,952,324

Finished goods 981,451,681 1,499,218,273

Goods-in-transit (finished goods) 9,361,384 3,859,873

Stores and spares 477,208,815 446,580,427

Stock-in-trade 445,075 16,380,654

3,170,219,987 3,677,053,126

Refer note 1.10 of significant accounting policies on disclosure of method for valuation of inventories.




63

(Rs.)

2.17 Short-term loans and advances As at 31 March 2016

As at 31 March 2015


Loans and advances to related parties (refer to note 2.36) 65,839,223 10,205,369

Others

- Loans and advances to employees 3,022,727 272,221

- Advances for supply of goods and rendering of services 144,338,758 188,987,072

- Duty drawback receivable 29,268,190 10,826,652

- Prepaid expenses 232,305,348 168,437,272

- Advance to contract bottler 65,116,547 113,750,000

- Balances with excise and other government authorities 1,076,873,398 957,056,330

- Interest accrued but not due 1,489,037 1,143,453

1,618,253,228 1,450,678,369

(Rs.)

2.19 Other operating revenues For the year ended 31 March 2016

For the year ended 31 March 2015

Income from contract bottling (refer note 2.26) 690,714,110 641,905,187

Sale of spent malt and scrap 342,466,589 322,211,417

Duty draw back on exports 28,456,884 15,023,981

Royalty income 29,583,646 21,560,122

1,091,221,229 1,000,700,707

(Rs.)

2.18 Other current assets As at 31 March 2016

As at 31 March 2015

Derivative financial assets 182,163,703 -

Unamortised discount on issue of commercial paper 57,904,451 142,664,936

240,068,154 142,664,936







64

(Rs.)

2.20 Other income For the year ended 31 March 2016


Interest income 57,046,829 28,258,568

Dividend income - 23,359

Net gain on foreign currency translation and transactions 33,409,610 -

Other non-operating income

- Profit on sale of fixed assets, net 28,897,775 17,623,787

- Release of deferred government grants (refer note 2.41) 12,914,978 20,753,497

- Miscellaneous income 28,371,537 1,950,409

160,640,729 68,609,620

(Rs.)

2.21 Changes in inventories of finished goods, work-in-progress and traded goods



Opening stock

Work-in-progress 236,952,324 241,378,208

Finished goods 1,503,078,146 1,116,988,377

Stock-in-trade 16,380,654 7,826,301

1,756,411,124 1,366,192,886

Less: Excise duty on opening stock 836,875,792 619,351,300

(A) 919,535,332 746,841,586

Closing stock

Work-in-progress 236,684,611 236,952,324

Finished goods, including in transit 990,813,065 1,503,078,146

Stock-in-trade 445,075 16,380,654

1,227,942,751 1,756,411,124

Less: Excise duty on closing stock 596,551,548 836,875,792

(B) 631,391,203 919,535,332

(Increase)/ decrease in finished goods, work-in-progress and traded goods (A-B)

288,144,129 (172,693,746)




65

(Rs.)

2.22 Employee benefits expense For the year ended 31 March 2016


Salaries and wages 1,570,944,830 1,500,977,005

Contributions to

- provident and other funds 63,271,105 59,558,482

- gratuity (refer to note 2.33) 15,297,599 49,313,271

Compensated absences 22,449,541 467,263

Staff welfare expense 50,465,687 50,680,122

1,722,428,762 1,660,996,143

(Rs.)

2.23 Finance cost For the year ended 31 March 2016


Interest expense 965,368,342 1,014,589,978

Other borrowing costs 145,295,061 17,037,350

1,110,663,403 1,031,627,328







66

(Rs.)

2.24 Other expenses For the year ended 31 March 2016


Sales scheme expenses 876,275,071 857,212,161

Commission on sales 377,263,629 381,736,925

Freight outward 1,551,271,232 1,440,551,234

Power and fuel 704,183,935 776,671,081

Advertisement and publicity 1,297,903,945 1,216,949,912

Management group service charges * 142,146,615 599,401,387

Rates and taxes 281,925,270 219,817,103

Legal and professional 157,154,810 203,767,790

Clearing and forwarding 374,815,851 344,124,652

Travel and conveyance 192,541,173 198,342,526

Consumption of stores and spare parts 211,849,298 255,327,624

Rent (refer to note 2.39) 136,489,763 128,515,721

Repairs

- buildings 26,585,014 28,024,448

- plant and machinery 176,006,501 136,751,974

- others 101,241,687 98,748,262

Impairment of capital work-in-progress # - 158,797,020

Insurance 34,585,577 44,477,014

Provision for doubtful debts 132,882,654 28,189,260

Provision for doubtful loans and advances 65,255,934 6,795,906

Bad and doubtful debts written off 438,063 5,072,789

Doubtful loans and advances written off 136,456 352,000

Provision for claims, net (refer to note 2.35) 44,509,029 43,049,024

Net loss on foreign currency translation and transactions - 69,225,547

Miscellaneous 714,671,859 587,033,512

7,600,133,366 7,828,934,872

* includes Rs 196,884,255 credit pertaining to previous year pursuant to a credit note issue by the related group entity during the current year.

# Pursuant to a decision in the previous year for a potential change in the location of a project then under development, the Company had impaired the

capital work-in-progress.




67

2.25 Contingent liabilities and other commitments (Rs.)

Particulars As at 31 March 2016

As at 31 March 2015

(i) Contingent liabilities

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

a) Sales tax matters 597,362,498 568,610,382

b) Excise matters 19,931,526 19,931,526

c) Service tax matters 224,456,391 234,523,299

d) Custom matters 261,555 261,555

e) Other matters 173,149,023 169,003,814

(ii) Commitments

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for

437,835,103 359,735,166

b) Other commitments

- Purchase of raw materials (Hops and cans) 840,215,023 1,173,024,674

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

Particulars For the year ended 31 March 2016


As auditor

- Statutory audit 13,950,000 10,700,000

- Tax audit 1,000,000 1,000,000

Reimbursement of expenses 761,433 584,358

a) details of finished goods (including goods in transit) and turnover (gross) (Rs.)

Beer For the year ended 31 March 2016


Opening stock 1,503,078,146 1,116,988,377

Sales (gross of excise duty) 35,985,661,562 34,119,273,692

Closing stock 990,813,065 1,503,078,146


2.26 Income from contract bottling operations pertains to the revenue share the Company has earned on sales made by the tie-up units (‘contract bottlers’). These revenues are recorded on a net basis in order to comply with relevant statutory regulations, where by tie-up units raise invoices on their customers, discharge statutory dues and taxes and record sales on a gross basis in the financial statements. The contract bottling agreement further specifies that the dealing between the Company and the contract bottlers is on a principal to principal basis. The above practice is consistent with prevalent industry practice.

2.28 Additional information pursuant to general instructions for preparation of the statement of profit and loss






68


b) details of traded goods (Rs.)



Opening stock 16,380,654 7,826,301

Purchases 738,059,596 424,755,714

Sales 1,199,928,806 813,349,181

Closing stock 445,075 16,380,654

c) Consumption of raw materials and packing materials (Rs.)



Malt (including raw barley used directly in manufacturing process) 1,372,943,843 1,376,747,426

Bottles 3,146,579,369 2,997,819,028

Flakes 919,403,752 964,050,904

Cans 1,507,095,568 1,362,177,797

Others * 1,891,171,290 2,118,398,196

8,837,193,822 8,819,193,352

* Individual items are less than 10% of the total value of consumption.

d) Consumption of imported and indigenous raw materials and packing materials

Particulars For the year ended 31 March 2016 For the year ended 31 March 2015

Amount (Rs.) % Amount (Rs.) %

Imported 224,240,580 3 194,010,441 2

Indigenous 8,612,953,242 97 8,625,182,911 98

8,837,193,822 100 8,819,193,352 100

e) Consumption of imported and indigenous stores and spares (Rs.)

Particulars For the year ended 31 March 2016 For the year ended 31 March 2015

Amount (Rs.) % Amount (Rs.) %

Imported 34,628,237 16 60,163,069 24

Indigenous 177,221,060 84 195,164,555 76

211,849,298 100 255,327,624 100



69


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



Loss for the year attributable to equity shareholders (473,652,285) (1,273,588,070)

Weighted average number of equity shares of Rs. 10 each used for calculation of basic and diluted earnings per share

313,170,736 313,170,736

Basic and diluted earnings per share (1.51) (4.07)

2.30 value of imports on CIF basis (Rs.)



Raw materials 158,746,203 131,621,624

Stores and spares 32,069,139 47,016,218

Capital goods 61,232,141 89,575,976

252,047,483 268,213,818

2.31 Expenditure in foreign currency (accrual basis) (Rs.)



Travel and conveyance 8,375,281 9,988,845

Management group service charge * 92,580,184 480,118,590

Salaries, wages and bonus 20,852,183 37,118,863

Interest expense * 452,719,314 292,339,678

Legal and professional 6,939,136 9,105,705

Others 105,516,350 101,419,429

686,982,446 930,091,110

* net of withholding tax and service tax, as applicable

2.32 Earnings in foreign currency (accrual basis) (Rs.)



Export sales at FOB value 901,624,644 748,046,036

2.33 gratuity

The Company has a gratuity plan for the employees of the Company. Every employee who has completed 5 years or more of service is eligible for gratuity on separation, worked out at 15 days salary (last drawn salary) for each completed year of service. The obligation under the scheme is partially funded by contributions being made towards qualifying insurance policies obtained from the insurer.






70


Statement of profit and loss

Net employee benefits expense (recognised in employee benefits expense) (Rs.)



Current service cost 20,957,177 17,595,747

Interest cost on defined benefit obligation 14,958,268 13,634,981

Expected return on plan assets (2,323,215) (2,332,006)

Net actuarial loss/ (gain) recognised for the year (18,294,631) 20,414,549

Net benefits expense 15,297,599 49,313,271

Balance sheet

details of provision for gratuity (Rs.)

Particulars As at 31 March 2016 As at 31 March 2015

Defined benefit obligations 205,741,114 191,795,550

Less: Fair value of plan assets 33,362,912 32,138,238

Plan liabilities 172,378,202 159,657,312

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



Opening defined benefit obligation 191,795,550 150,874,487

Current service cost 20,957,177 17,595,747

Interest cost 14,958,268 13,634,981

Benefits paid (4,900,783) (8,523,586)

Actuarial loss/ (gain) on obligation (17,069,098) 18,213,921

Closing defined benefit obligation 205,741,114 191,795,550

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



Opening fair value of plan assets 32,138,238 30,179,970

Expected return on plan assets 2,323,215 2,332,006

Actuarial (loss)/ gain on plan assets 1,225,534 (2,200,628)

Contributions by employer 2,576,708 3,578,559

Benefits paid (4,900,783) (1,751,669)

Closing fair value of plan assets 33,362,912 32,138,238



71


Major categories of plan assets as a percentage of the fair value of total plan assets (Rs.)


Qualifying insurance policies from the insurer 100% 100%

Amounts for the current and previous four years (Rs.)

Particulars As at31 March 2016

As at31 March 2015

As at31 March 2014

As at31 March 2013

As at31 March 2012

Defined benefit obligation 205,741,114 191,795,550 150,874,487 144,274,427 114,415,667

Plan assets 33,362,912 32,138,238 30,179,970 34,272,013 32,598,237

deficit (172,378,202) (159,657,312) (120,694,517) (110,002,414) (81,817,430)

Experienced adjustments on plan liabilities

19,903,117 (944,740) (2,526,892) (7,431,281) (593,065)

Experienced adjustments on plan assets

1,225,534 (2,200,628) (832,210) 2,664,285 148,949

Principal assumptions used in determining gratuity benefit obligations for the Company’s plan


Discount rate 7.70% 7.90%

Expected rate of return on plan assets 7.50% 7.50%

Salary increase 9.00% 9.00%

Employee turnover1% to 15% across

categories1% to 15% across

categories

Retirement age 58 Years 58 Years

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant

factors such as supply and demand factors in the employment market.

The overall expected rate of return on plan assets is determined based on the market prices prevailing on that date, applicable to the

period over which the obligation is to be settled.

2.34 Segmental reporting Business segments The Company’s sole business segment is ‘Manufacture and Sale of Beer’. Consequently, the requirement for separate

business segment disclosures as required under AS 17 – ‘Segment Reporting’ is not applicable.

geographical segments The Company operates in two principal geographical areas of the world: India and Rest of the world. The accounting principles used in the preparation of the financial statements are also consistently applied to record

income and expenditure in individual segments. Income and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while the remainder of costs are apportioned on an






72


appropriate basis. Certain expenses are not specifically allocable to the individual segments as these expenses are common in nature. The Company therefore believes that it is not practicable to provide segment disclosure relating to such expenses and accordingly such expenses are separately disclosed as unallocated and directly charged against total income.

Certain segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and consist principally of fixed assets, inventories, trade receivables and loans and advances. Segment liabilities include trade payables and other operating liabilities and provisions. Certain assets and liabilities that are not specifically allocable to the individual segments have been separately disclosed as unallocated.

(Rs.)

Revenue from sale of products (net of duties, taxes and discount)



India 18,884,249,808 17,648,240,751

Rest of the world 901,624,644 748,046,036

19,785,874,452 18,396,286,787

(Rs.)

Segment assets As at 31 March 2016

As at 31 March 2015

India 27,775,796,578 24,002,309,102

Rest of the world 165,795 165,795

27,775,962,373 24,002,474,897

(Rs.)

Capital expenditure (on cash basis) For the year ended 31 March 2016


India 1,550,619,391 1,107,743,789

Rest of the world - -

1,550,619,391 1,107,743,789

2.35 Provision for claims The provisions are utilised to settle previously anticipated and determined adverse outcomes of legal cases against the

Company. The provision is based on independent advice obtained by the Company from external legal counsel. The time frame of utilisation of the provision is determined by the course of the legal proceedings.



73


Provision for indirect-tax cases Several litigations are in process against the Company relating to Excise, Sales tax, Service tax and Customs duty related

matters. In respect of such provision, the disclosures required by Accounting Standard 29 - ‘Provisions, Contingent liabilities and Contingent assets’ have not been provided in accordance with paragraph 72 of Accounting Standard 29 - ‘Provisions, Contingent liabilities and Contingent assets’. Timing of outflow of resources will depend upon timing of decision of these litigations.

Provision for water charges The Maharashtra Industrial Development Corporation (‘MIDC’) had, vide order number EE/E&M/785/2005 dated 25 May 2005,

made a demand for increase in water charges with retrospective effect from 1 November 2001. Waluj Industries Association (‘the Association’), of which the Company is a member has filed a writ petition against such demand in the Honorable High Court of Bombay. The Honorable High Court of Bombay has passed an order against the appeal and has directed the Association to release the demand amount with retrospective effect. Accordingly the Company has made the payment of the principal amount outstanding. However with respect to interest for which the above provision is recognised, the Association has given a representation on behalf of the Company for waiver of interest demanded by MIDC. The matter is currently pending final settlement.

(Rs.)



Provision for indirect-tax cases

Opening balance 471,349,245 428,300,221

Add: Addition during the year 48,568,241 43,049,024

Less: Unused amounts reversed during the year (4,059,212) -

Closing balance 515,858,274 471,349,245

Provision for water charges

Opening balance 54,252,262 54,252,262

Add: Addition during the year - -

Less: Utilised during the year - -

Closing balance 54,252,262 54,252,262

570,110,536 525,601,507






74


2.36 Related parties

(i) Names of related parties and description of relationship with the Company:

Enterprises where control exists

Ultimate holding company SABMiller plc

Holding company SABMiller Asia BV

Significant influence SABMiller Breweries Private Limited

Other related parties with whom transactions have taken place

Subsidiary SPR Distilleries Private Limited

Fellow subsidiaries S.p.A. Birra Peroni

SKOL Beer Manufacturing Company Limited

SABMiller Management (IN) BV

SABMiller Corporate Services Ltd

MBL Breweries Limited (formerly known as MBL Property Developers Limited)

SABMiller Europe AG

SABMiller (Asia) Limited

SABMiller International Brands Limited

SABMiller Procurement GmbH

SABMiller Management BV

SABEX

MillerCoors LLC

Miller Brewing International Inc.

SABMiller Asia - Africa

SABMiller Vietnam

CUB Pty Ltd

SABMiller Global Business Services India Private Limited

Kgalgadi Breweries (Pty) Ltd

Key managerial personnel Grant Liversage, Managing Director (upto 31 December 2014)

Shalabh Seth , Managing Director



75


(ii) Related party transactions continued (Rs.)



SPR distilleries Private Limited

Unsecured loan given, net 573,884,381 -

Interest income 26,320,061 -

Investment in equity shares 19,998,000 -

Expenses incurred by the Company on behalf of related party 47,887,913 -

SABMiller Breweries Private Limited

Interest income 403,629 254,858

Expenses incurred by the Company on behalf of related party 225,834 3,558,786

MBL Breweries Limited (formerly known as MBL Property developers Limited)

Expenses incurred by the Company on behalf of related party 153,200 36,000

SABMiller plc

Expenses incurred by related party on behalf of the Company 3,212,700 2,508,736

Expenses incurred by the Company on behalf of related party 3,844,212 17,774,109


Management group service charge 209,094,603 533,465,100

Credit received against management group service charge for earlier year 196,395,416 -


Management group service charge 204,219,747 -

Credit received against management group service charge 98,820,078 -

SkoL Beer Manufacturing Company Limited

Interest expense 7,648,223 7,194,882

Unsecured loan taken/ (repayment), net (1,535,000) (1,154,810)

MillerCoors LLC

Purchase of raw materials 7,481,744 23,129,354


Expenses incurred by the Company on behalf of related party 1,817,413 4,932,175

SABMiller Procurement gmbh

Commission paid on purchase of raw materials 127,300,249 77,097,062






76






Royalty expenses (grouped under miscellaneous expenses) 15,802,834 11,115,446

SABMiller Asia BV

Commercial paper issued/ (repaid) (3,000,000,000) 3,000,000,000

Unsecured loan taken/ (repayment), net 5,334,829,515 2,929,588,671

Interest expense 149,649,939 34,624,493


Expenses incurred on behalf of other companies 519,701 1,321,972

SABMiller Vietnam

Expenses incurred on behalf of other companies - 142,783

CuB Pty Ltd

Expenses incurred on behalf of other companies 1,757,750 2,124,810

Expenses incurred by related party on behalf of the Company - 7,367,093

Purchase of raw materials - 5,718,933

SABMiller global Business Services India Private Limited

Purchase of capital goods 13,970,527 -

Purchase of others assets 9,788,475 -

Expenses incurred on behalf of other companies 33,051,126 -

kgalgadi Breweries (Pty) Ltd

Expenses incurred on behalf of other companies 924,996 -

grant Liversage

Remuneration - 34,770,778

Shalabh Seth

Remuneration 29,635,992 25,707,512



77


(iii) Amount outstanding as at the balance sheet date: (Rs.)

As at 31 March 2016

As at 31 March 2015


Long-term loans and advances 1,466,653 1,466,653

Short-term loans and advances 3,016,661 3,016,661

SABMiller plc

Short-term loans and advances - 3,613,976

Other current liabilities 1,140,928 3,773,536



SkoL Beer Manufacturing Company Limited

Long-term borrowings 90,905,652 85,557,252


Other current liabilities - 120,482,680


Other current liabilities 92,673,640 -

SABMiller europe Ag

Other current liabilities 75,420 75,420

SABMiller Asia BV

Long-term borrowings 7,287,225,000 3,896,044,402

Short-term borrowings - 3,000,000,000

Other current liabilities 1,943,648,917 -

S.p.A. Birra Peroni

Other current liabilities 236,017 236,017

SABMiller Procurement gmbh


MillerCoors LLC

Other current liabilities 5,537,485 85,062


Short-term loans and advances 20,902 1,321,972

SABMiller Vietnam

Short-term loans and advances 158 142,783






78

(iii) Amount outstanding as at the balance sheet date: continued (Rs.)

As at 31 March 2016

As at 31 March 2015

CuB Pty Ltd

Short-term loans and advances 3,098,729 1,607,449

Other current liabilities - 7,367,093


Short-term loans and advances 1,369,009 466,528

MBL Breweries Limited (formerly known as MBL Property developers Limited)

Short-term loans and advances 191,200 36,000

SABMiller global Business Services India Private Limited

Short-term loans and advances 9,329,654 -

kgalgadi Breweries (Pty) Ltd

Short-term loans and advances 924,996 -

trinity Procurement gmbh

Other current liabilities 5,318,708 -

SPR distilleries Private Limited

Long-term loans and advances 597,572,436 -

Short-term loans and advances 47,887,913 -


2.37 deferred tax assets/ (liabilities) (Rs.)


As at 31 March 2015

deferred tax assets

Investments 36,204 35,527

Trade receivables 225,299,113 177,974,138

Loans and advances 43,929,507 21,936,107

Provision for retirement benefits 84,823,890 73,997,472

Provision for claims 151,377,132 134,106,699

Unabsorbed depreciation * 880,632,942 987,847,694

1,386,098,789 1,395,897,637

deferred tax liabilities

Fixed assets 1,386,098,789 1,395,897,637

1,386,098,789 1,395,897,637

deferred tax asset/ (liabilities), net - -

* In view of the accumulated losses and in accordance with AS 22 – “Accounting for taxes on income”, deferred tax assets on unabsorbed depreciation and other temporary timing differences have been recognised only to the extent of those timing differences, the reversal of which will result in sufficient taxable income.



79


(Rs.)

PeriodAs at

31 March 2016As at

31 March 2015

Not later than 1 year 48,068,000 23,300,000

Later than 1 year and not later than 5 years 105,034,400 46,600,000

Later than 5 years - -

2.38 derivative instruments and un-hedged foreign currency exposure derivative instruments

Particulars Purpose As at 31 March 2016

As at 31 March 2015

Interest rate swap Towards repayment of interest on foreign currency loans at a fixed rate from floating rate

USD 487,500 -

Forward contract Towards repayment of foreign currency loans USD 37,339,204 USD 37,339,204

Currency swap contract Towards repayment of foreign currency loans USD 102,000,000 USD 25,000,000

un-hedged foreign currency exposures

Underlying asset/ liability

Foreign currency

As at 31 March 2016 As at 31 March 2015

Amount in foreign currency

Amount (Rs.)

Amount in foreign currency

Amount (Rs.)

Balances with banks USD 218,213 14,452,279 388,299 24,267,740

Trade receivables USD - - 2,653 165,795

Trade payables USD 315,326 20,889,541 - -

GBP 6,195 589,410 - -

EURO 747,013 56,319,280 693,811 46,531,174

Payable to related parties EURO 2,855 236,017 2,855 236,017

USD 3,987,502 264,162,035 2,399,083 149,936,679

2.39 operating leases The Company was obligated under non-cancellable operating leases for a brewing facility and other office premises

which were renewable at the option of both the lessor and lessee. Total rental expense under non-cancellable operating leases amounted to Rs. 23,300,000 (previous year: Rs. 23,300,000) for the year ended 31 March 2016. Future minimum lease payments under non-cancellable operating leases are as follows:

The Company is also obligated under cancellable lease for residential and office premises and motor vehicles which are renewable at the option of both the lessor and lessee. Total rental expense under cancellable operating leases amounted to Rs. 113,189,763 (previous year: Rs. 105,215,721) for the year ended 31 March 2016.






80

(Rs.)

ParticularsAs at

31 March 2016As at

31 March 2015

(i) The principal amount remaining unpaid to any supplier as at the end of each accounting year;

14,048,578 18,993,129

(ii) The amount of interest paid by the Company along with the amounts of the payment made to the supplier beyond the appointed day during the year;

- -

(iii)The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act;

- -

(iv)The amount of interest accrued and remaining unpaid at the end of the year; and 2,646,579 2,646,579

(v) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise.

2,646,579 2,646,579


2.40 The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small and Medium Enterprises Development Act, 2006’ (‘the Act’). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2016 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

2.41 government grant

The Company is entitled to receive grant from Government of Maharashtra under Package Scheme of Incentives, 2007 towards capital expansion of units set up in the developing region of the State of Maharashtra. As at 31 March 2016, the Company has received a total grant of Rs. 211,803,000 (previous year: Rs. 211,803,000). The Company recognises the grant to the statement of profit and loss over the useful life of the asset in the proportion in which depreciation on related assets are charged. Accordingly an amount of Rs. 80,369,169 (previous year: Rs 67,454,191), including release during the year amounting to Rs. 12,914,978 (previous year: Rs. 20,753,497), has been credited to the statement of profit and loss.


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.



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(i) During the year ended 31 March 2016, the Group had the following share-based payment arrangements for the employ-ees of the Company.

Executive Share Option Scheme [Approved and (No 2) Scheme]


As at 31 March 2015

Date of grant - 2-Jun-14

Number of shares granted - 500

Method of settlement - Equity

Contractual life - 10 years

Vesting period - 3 years

Vesting condition - Achievement of a

target growth in earning per share

SABMiller plc Share Award Plan 2008


As at 31 March 2015

Date of grant 1-Jun-15 /1-Dec-15 2-Jun-14

Number of shares granted 35,964 32,916

Method of settlement Equity Equity

Contractual life 10 years 10 years

Vesting period 3 years 3 years

Vesting condition Achievement of a


Achievement of a target growth in

earning per share

SABMiller plc Stock Appreciation Rights Plan 2008


As at 31 March 2015

Date of grant 1-Jun-15 2-Jun-14

Number of shares granted 59,637 58,697

Method of settlement Equity Equity

Contractual life 10 years 10 years

Vesting period 3 years 3 years

Vesting condition Achievement of a


Achievement of a target growth in

earning per share






82


(ii) Details of the activity of shares issued after 1 April 2005 under Executive Share Option Scheme [Approved and (No 2) Scheme] are as follows:

Particulars 31 March 2016 31 March 2015

Number of

Options

Weighted average

exercise price (Rs.)

Number of

Options

Weighted average


Outstanding at the beginning of the year 124,800 1,873 331,250 1,764

Granted during the year - - 500 2,092

Transferred in/ (out) during the year, net* - - (103,500) 1,865

Lapsed during the year 15,000 2,050 4,500 2,776

Exercised during the year 59,150 1,864 98,950 1,475

Outstanding at the end of the year 50,650 1,831 124,800 1,873

Exercisable at the end of the year 50,650 1,831 44,400 1,477

* The options transferred represents options relating to employees transferred from companies within the SABMiller Group during earlier years.

The weighted average share price at the date of exercise for stock options exercised during the year was Rs. 3,381 (previous year: Rs. 3,425). The options outstanding as at 31 March 2016 had a weighted average remaining contractual life of 5.51 years (previous year: 6.59 years).

The details of the activity of shares issued after 1 April 2005 under SABMiller plc Share Award Plan 2008 are as follows:


Number of

Options

Weighted average


Number of

Options

Weighted average


Outstanding at the beginning of the year 42,374 - 21,000 -

Granted during the year 35,964 - 32,916 -

Transferred (out) during the year, net* - - (11,542) -

Lapsed during the year 6,222 - - -

Vested during the year 15,500 - - -

Outstanding at the end of the year 56,616 - 42,374 -

Exercisable at the end of the year - - - -

* The options transferred represents options relating to employees transferred from companies within the SABMiller Group during earlier years.

The weighted average share price at the date of exercise for stock options exercised during the year was Nil (previous year: Nil). The options outstanding as at 31 March 2016 had a weighted average remaining contractual life of Nil years (previous year: Nil years).



83


The details of the activity of shares issued after 1 April 2005 under SABMiller plc Stock Appreciation Rights Plan 2008 are as follows:


Number of Options

Weighted average exercise price (Rs.)

Number of Options


Outstanding at the beginning of the year 164,747 3,170 131,050 3,305

Granted during the year 59,637 3,372 58,697 2,894

Transferred (out) during the year - - (15,000) (3,166)

Lapsed during the year 43,035 4,258 10,000 3,323

Exercised during the year 2,400 3,249 - -

Outstanding at the end of the year 178,949 3,229 164,747 3,170


The weighted average share price at the date of exercise for stock options exercised during the year was Rs 3,447 (previous year: Rs Nil). The options outstanding as at 31 March 2016 had a weighted average remaining contractual life of 8.04 years (previous years: 8.51).

The details of the activity of shares issued after 1 April 2005 under SABMiller plc South African Scheme and South African Share Option Plan 2008 are as follows:


Number of Options


Number of Options


Outstanding at the beginning of the year - - 8,500 917

Granted during the year - - - -

Transferred in/ (out) during the year - - - -

Lapsed during the year - - - -

Vested during the year - - 8,500 917

Outstanding at the end of the year - - - -


The weighted average share price at the date of exercise for stock options exercised during the year was Rs. Nil (previous year: Rs. Nil). The options outstanding as at 31 March 2016 had a weighted average remaining contractual life of Nil years (previous year: Nil years).

The weighted average fair value of stock options granted during the year is Rs. 1,545 (previous year: Rs. 1,243). The estimate of fair value on the date of the grant was made using the Binomial model valuation and Monte Carlo model with the following assumptions:

SABMiller plc operates a variety of equity-settled share-based compensation plans for few select employees of the Company, costs of which are not re-charged to the Company.



Share price at the grant date Rs 2848 / Rs 3944 2,848

Exercise price at the grant date Rs.2879/ Rs.Nil Rs. 2,879/ Rs. Nil

Expected volatility 21.40%/ Nil 21.40%

Contractual life (vesting and exercise period) 10 years 10 years

Expected dividends 2.11% 2.06%

Average risk-free interest rate 1.34% 1.67%

The expected volatility was determined based on historical daily share price volatility of SABMiller plc share price.






84

(iii) Since the Company uses the intrinsic value method, the impact on the reported net loss and earnings per share is computed by applying the fair value based method. The Guidance Note requires the proforma disclosures of the impact of the fair value method of accounting of employee stock compensation in the financial statements. Applying the fair value based method defined in the said Guidance Note, the impact on the reported net loss and earnings per share would be as follows:

(Rs)



Net (loss) as reported (473,652,285) (1,273,588,070)

Add: Employee stock compensation under intrinsic value method - -

Less: Employee stock compensation under fair value method (71,805,542) (26,370,014)

Proforma net income (545,457,827) (1,299,958,084)

Earnings per share as reported

- Basic (1.51) (4.07)

- Diluted (1.51) (4.07)

Proforma earnings per share

- Basic (1.74) (4.15)

- Diluted (1.74) (4.15)


2.43 details of inter-corporate loans given

(a) Terms and conditions on which inter-corporate loans have been given

Party name Interest rate Repayment terms Purpose

SABMiller Breweries Private Limited 9.00% Not repayable before 1 April 2018 General

SPR Distilleries Private Limited 9.50% Not repayable before 1 April 2018 General

(b) Reconciliation of inter-company loans given as at the beginning and as at the end of the year (Rs)


As at 31 March 2015


At the commencement of the year 1,466,653 1,466,653

Add: Given during the year - -

Less: Repaid during the year - -

At the end of the year 1,466,653 1,466,653

SPR Distilleries Private Limited

At the commencement of the year - -

Add: Given during the year 597,572,436 -

Less: Repaid during the year - -

At the end of the year 597,572,436 -



85

2. Notes to the financial statements2.44 employee stock compensation cost

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.








Bangalore

Date: 7 June 2016



Bangalore

Date: 7 June 2016


Auditors’ ReportIndependent Auditor’s Report To the Members of SABMiller India Limited

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of SABMiller India Limited (‘the Holding Company’) and its subsidiary (the Holding Company and its subsidiary together referred to as ‘the Group’), comprising of the consolidated balance sheet as at 31 March 2016, the Consolidated statement of profit and loss, the Consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as ‘the consolidated financial statements’).

Management’s responsibility for the consolidated financial statements

The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (‘the Act’), that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the preparation of the consolidated financial statements by the directors of the Holding Company, as aforesaid.

Auditors’ responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Holding Company has an adequate internal financial controls system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.





86



Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31 March 2016, and their consolidated loss and their consolidated cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements;

b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books;

c) The consolidated balance sheet, the consolidated statement of profit and loss and the consolidated cash flow statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements;

d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the Directors of the Holding Company as on 31 March 2016 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary company incorporated in India, none of the directors of the

Group Companies incorporated in India is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

f) with respect to the adequacy of the internal financial controls over financial reporting of the Group and operating effectiveness of such controls, refer to our separate report in ‘Annexure A’; and

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Group does not have any pending litigations which would impact its financial position;

ii. The Group did not have any long-term contracts including derivative contracts; and

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company and its subsidiary company incorporated in India.

for B S R & Co. LLP Chartered Accountants ICAI Firm Registration Number: 101248W/ W-100022



Annexure - A to the Independent Auditor’s Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended 31 March 2016, we have audited the internal financial


87



controls over financial reporting of SABMiller India Limited (‘the Holding Company’) and its subsidiary company which is a company incorporated in India, as of that date (the Holding Company and its subsidiary together referred to as ‘the Group’).

Management’s responsibility for internal financial controls

The respective Board of Directors of the Holding Company and its subsidiary company, which is a company incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the ‘Guidance Note’) issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor’s responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by the ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial

controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of internal financial controls over financial reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that

1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.





88


Inherent limitations of internal financial controls over financial reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Holding Company and its subsidiary company, which is a company incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal

financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

for B S R & Co. LLP Chartered Accountants ICAI Firm Registration Number: 101248W/ W-100022





89


Consolidated Balance sheet(Rs.)

Note As at 31 March 2016

EQUITY AND LIABILITIES

Shareholders' funds

Share capital 2.1 3,131,707,360

Reserves and surplus 2.2 1,198,557,806

4,330,265,166

Deferred government grants 2.41 131,433,831

Non-current liabilities

Long-term borrowings 2.3 7,378,130,652

Other long-term liabilities 2.4 118,996,030

Long-term provisions 2.5 244,023,106

7,741,149,788

Current liabilities

Short-term borrowings 2.6 6,843,694,585

Trade payables 2.7 2,083,077,389

Other current liabilities 2.8 6,372,591,868

Short-term provisions 2.9 607,499,652

15,906,863,494

28,109,712,279

ASSETS

Non-current assets

Fixed assets

Tangible assets 2.10 8,715,680,833

Intangible assets 2.10 1,729,277,457

Capital work-in-progress 1,504,272,551

11,949,230,841

Goodwill on consolidation 20,698,980

Non-current investments 2.11 5,122,873

Long-term loans and advances 2.12 1,026,185,511

Other non-current assets 2.13 738,603,961

13,739,842,166

Current assets

Inventories 2.14 3,170,219,987

Trade receivables 2.15 9,006,162,746

Cash and bank balances 2.16 383,053,911

Short-term loans and advances 2.17 1,570,365,315

Other current assets 2.18 240,068,154

14,369,870,113

28,109,712,279


The notes referred to above form an integral part of the consolidated financial statements








Bangalore tejvir Singh Sridhar S

Date: 7 June 2016 Chief Financial Officer Company Secretary

Bangalore

Date: 7 June 2016





90


Consolidated statement of profit and loss(Rs.)

Note For the year ended

31 March 2016

Income

Revenue from operations

Sale of products, gross

Sale of manufactured goods, gross 35,985,661,562

Less: Excise duty (17,399,715,916)

Sale of manufactured goods, net 18,585,945,646

Sale of traded goods 1,199,928,806

Sale of products, net 19,785,874,452

Other operating revenues 2.19 1,091,221,229

20,877,095,681

Other income 2.20 134,320,668

21,011,416,349

Expenses

Cost of materials consumed 8,837,193,822

Purchase of stock-in-trade 738,059,596

Changes in inventories of finished goods, work-in-progress and traded goods 2.21 288,144,129

Employee benefits expense 2.22 1,722,428,762

Finance cost 2.23 1,110,663,403

Depreciation and amortisation 2.10 1,214,765,617

Other expenses 2.24 7,600,633,773

21,511,889,102

(Loss) before tax (500,472,753)

Tax expense:

- current tax -

- deferred tax (credit)/ charge 2.37 -

(Loss) for the year (500,472,753)

Earnings per equity share (par value; Rs. 10 each)

-Basic and diluted 2.29 (1.60)







Bangalore

Date: 7 June 2016


91


Consolidated cash flow statement (Rs.)


Cash flows from operating activities

(Loss) before tax (500,472,753)Adjustments:

Depreciation and amortisation 1,214,765,617 Release of deferred government grants (12,914,978) Interest and financing charges, excluding bank charges 1,106,527,772 Interest income (30,726,768) Profit on sale of fixed assets (28,897,775) Unrealised foreign exchange difference 8,601,898 Operating cash flows before working capital changes 1,756,883,013

Decrease in inventories 506,833,139

(Increase) in trade receivables (2,999,294,077) (Increase) in loans and advances (385,767,920)

Decrease in bank balances (other than cash and cash equivalents) 6,206,213

Increase in liabilities and provisions 386,758,803

Cash (used in)/ generated from operations (728,380,829)

Taxes paid, net of refund (42,615,104)Net cash (used in) provided by operating activities a (770,995,933)

Cash flows from investing activities Purchase of fixed assets (2,455,059,441) Proceeds from sale of fixed assets 94,674,792 Interest received 30,381,184 Advance for purchase of trade investment refunded 50,000,000 Purchase of investments, net (2,840,000) Acquisition of a subsidiary, net of cash acquired (19,993,225)Net cash (used in) investing activities b (2,302,836,690)

Cash flows from financing activities Proceeds from borrowings, net 3,743,325,542 Interest and financing charges paid (1,031,045,290)Net cash provided by financing activities c 2,712,280,252 Effect of exchange rate changes on cash and cash equivalents d 818,085 Net (decrease)/ increase in cash and cash equivalents e=a+b+c+d (360,734,286)

Cash & cash equivalents at the beginning of the year f 555,790,292

Cash & cash equivalents at the end of the year (refer note below) g = e + f 195,056,006

Note: Components of cash and cash equivalents Cash and cash equivalents (refer note 2.16) 383,053,911 Book overdraft (refer note 2.8) (187,997,905)

195,056,006






Bangalore

Date: 7 June 2016





92



93

1. Significant accounting policies

Background

SABMiller India Limited (“the Company”), formerly SKOL Breweries Limited, was incorporated as a private limited com-pany under the Companies Act, 1956 on 18 November 1988. With effect from 22 June 2012 the name of the Company was changed from SKOL Breweries Limited to SABMiller In-dia Limited. The Company is primarily engaged in the busi-ness of brewing, packaging, distribution, marketing and sale of beer. The Company together with its subsidiary is referred to as ‘the Group’.

1.1(a) Basis of preparation

These consolidated financial statements are prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules,2014, the provisions of the Act (to the extent notified and applicable) and guidelines issued by the Securities and Exchange Board of India (SEBI).

As this is the first year when consolidated financial statements are being presented by the Company, previous year comparatives have not been presented in accordance with paragraph 30 of Accounting Standard (AS) 21 – ‘Consolidated Financial Statements’.

The subsidiary considered in these consolidated financial statements is:

Particulars Country of Incorporation

Proportion of ownership interest (%)

Proportion of voting power held directly or indirectly (%)

Effective date of consolidation

SPR Distilleries Private Limited

India 99.99% 99.99% 31 July 2015

(b) Principles of consolidation

The consolidated financial statements are prepared in accordance with Accounting Standard 21 – ‘Consolidated

Financial Statements’ prescribed by the Companies (Accounting Standard ), Rules 2006.

• Thefinancialstatementsoftheparentcompanyandthe subsidiary has been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances / transactions and resulting unrealised profits in full. Unrealised losses resulting from intra-Group transactions have also been eliminated in full. The amounts shown in respect of reserves comprise the amount of the relevant reserves as per the balance sheet of the parent company and its share in the post-acquisition increase in the relevant reserves of the subsidiaries.

• Theexcess /deficitofcost to theparent companyof its investment in the subsidiary over its portion of equity at the respective dates on which investment in such entity were made is recognised in the financial statements as goodwill / capital reserve. The parent company’s portion of equity in such entities is determined on the basis of the book values of assets and liabilities as per the financial statements of such entities as on the date of investment and if not available, the financial statements for the immediately preceding period adjusted for the effects of significant transactions, up to the date of investment.

• Minority interest in the net assets of consolidatedsubsidiaries consists of: (a) the amount of equity attributable to minorities at the date on which investment in a subsidiary is made; and (b) the minorities’ share of movements in equity since the date the parent subsidiary relationship came into existence.

• Theconsolidatedfinancialstatementsarepresented,to the extent possible, in the same format as that adopted by the parent company for its separate financial statements.

• The consolidated financial statements are preparedusing uniform accounting policies for like transactions and other events in similar circumstances.







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1.2 going concern

These consolidated financial statements have been prepared on a going concern basis, notwithstanding accumulated losses and reliance on short-term borrowings due to the following considerations:- Expected steady future growth reflected in financial

projections prepared by the management;- Expected continual technical and financial support by

the SABMiller group; and- Subsequent renewal of short-term borrowings from

banks.

These consolidated financial statements, therefore, do not include any adjustments relating to recoverability and classification of asset amounts or to classification and amount of liabilities that may be necessary if the Company was unable to continue as a going concern.

1.3 use of estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the consolidated financial statements and the results of operations during the reporting period end. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

1.4 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably.

(i) Sale of goods

Revenue from sale of manufactured and traded goods is recognised on transfer of all the significant risks and rewards of ownership to the buyer which normally takes place on despatch of goods. The amount recognised as sale is net of sales tax, sales returns and trade discount. Sales are presented both gross and net of excise duty.

(ii) Income from contract bottling

Income from contract bottling is recognised when the right to receive bottling fee is established which normally takes place on dispatch of goods by contract bottlers to its customers.

(iii) Interest

Interest income is recognised using the time proportion basis taking into account the amount outstanding and the interest rate applicable.

(iv) Sale of spent malt and scrap

Revenue from sale of spent malt and scrap is recognised on transfer of all the significant risks and rewards of ownership to the buyer which normally takes place on despatch of goods. The amount recognised as sale is net of sales tax and sales returns.

1.5 fixed assets

Fixed assets are carried at cost of acquisition or construction less accumulated depreciation and provision for impairment of assets. The cost of fixed assets includes freight, duties, taxes and other incidental expenses related to the acquisition or construction of the respective assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised to the extent they relate to the period till such assets are ready to be put to use. Intangible assets are recorded at their acquisition cost.

The costs of the fixed assets, which are not ready for their intended use on such date, are disclosed as capital work-in-progress.

1.6 depreciation and Amortisation

Depreciation on tangible assets provided on the straight-line method over the useful life of assets estimated by the Company. Depreciation for assets purchased/ sold during a period is proportionately charged. Intangible assets are amortised over their respective individual estimated



95

useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use.

The Company estimates the useful lives for fixed assets as follows:

Class of assets Number of years

Buildings 5-28

Plant and machinery

- Brewing plant and vessels 20

- Packing plant 15

- Chillers 5

- Others 14-18

Computer equipment 4

Furniture and fixtures 6

Office equipment 6

Motor vehicles 5

Brands 20

Computer software 4

The Company believes that the useful lives as given above best represent the useful lives of these assets based on internal assessment and supported by technical advice where necessary which is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013.

Freehold land is not depreciated. Leasehold land is amortised over the lease term. Leasehold improvements are amortised over the lease term or its estimated useful life of 5 years, whichever is lower.

Assets, costing individually Rs 5,000 or less, are depreciated in full in the year of purchase.

The useful life of brands, which primarily represent brands purchased, have been determined based on management’s assessment of market conditions in India, intent to use and ability to maintain these assets, previous history of these brands and internationally accepted practices.

1.7 Impairment

The Company periodically assesses whether there is any indication that an asset or a group of assets

comprising a cash generating unit may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. For an asset or group of assets that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of profit and loss. The recoverable amount is higher of the asset’s net selling price and value in use.

After recognition of impairment loss, depreciation is provided on the revised carrying amount of the asset, less its residual value (if any), over its remaining useful life.

If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. An impairment loss is reversed only to the extent that the carrying amount of asset does not exceed the net book value that would have been determined, if no impairment loss had been recognised.

1.8 Borrowing costs

Borrowing costs directly attributable to acquisition or construction of those fixed assets, which necessarily take a substantial period of time to get ready for their intended use, are capitalised. Other borrowing costs are accounted as an expense.

1.9 Investments

Long-term investments are carried at cost less any other-than-temporary diminution in the value, as determined by management on commercial consideration determined separately for each individual investment.








96

1.10 Inventories

Inventories are valued at lower of cost and net realisable value. Cost of inventories comprises purchase price, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

The methods of determination of cost of various categories of inventories are as follows:

Raw materials, packing materials, stores and spares and traded goods

– First-in-first-out (‘FIFO’) method

Work-in-progress and finished goods (including goods in transit)

– FIFO method. Production overheads are allocated on the basis of normal capacity of production facilities

Maintenance spares, which are in regular use and are not an integral part of any fixed asset, are treated as inventory and valued at cost.

The comparison of cost and net realisable value is made on an item-by-item basis. The net realisable value of work-in-progress is determined with reference to the selling prices of related finished goods in the ordinary course of business, less estimated cost of completion and estimated costs necessary to make the sale. Raw materials, packing materials and other supplies held for use in production of inventories are not written below cost except in cases where material prices have declined, and it is estimated that the cost of the finished products will exceed their net realisable value.

1.11 foreign exchange

Foreign exchange transactions are recorded at the rates of exchange prevailing on the date of the respective transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss for the year.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rate on that date and the resultant exchange differences are recognised in the statement of profit and loss.

Forward contracts and other derivatives are entered into to hedge the foreign currency risk of the underlying outstanding at the balance sheet date. The premium or discount on all such contracts arising at the inception of each contract is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as income or as expense for the period.

The exchange difference on the forward exchange contract entered into to hedge the foreign currency risk of the underlying outstanding at the balance sheet date, is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognised in the statement of profit and loss in the reporting period in which the exchange rates change.

For forward exchange contracts and other derivatives that are not covered by AS 11 – ‘The Effects of Changes in Foreign Exchange Rates’ and that relate to a firm commitment or highly probable forecast transactions, the Company has adopted the principles of AS 30 - 'Financial Instruments: Recognition and Measurement' with effect from 1 April 2008. Derivative instruments that relate to a firm commitment or a highly probable forecast transaction have been recorded at fair value at the reporting date and the resultant exchange loss/ gain has been debited/ credited to statement of profit and loss for the year.

1.12 employee benefits

(i) Contributions to provident fund, which is a defined contribution scheme, are charged to the statement





97

of profit and loss on an accrual basis.

(ii) The Company has an arrangement with Life Insurance Corporation of India to administer its superannuation scheme, which is a defined contribution scheme. The contributions to the said scheme are charged to the statement of profit and loss on an accrual basis.

(iii) Gratuity, which is a defined benefit scheme, is provided for based on an actuarial valuation carried out by an independent actuary as at the balance sheet date. Actuarial gains/ losses are recognised immediately in the statement of profit and loss and are not deferred. The Company makes contributions towards gratuity into the approved gratuity fund administered by Life Insurance Corporation of India. Only such changes in legislation are taken into account while providing for gratuity that has been enacted up to the balance sheet date.

(iv) Compensated absences are provided for based on an actuarial valuation carried out by an independent actuary as at the balance sheet date.

1.13 Leases

Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased asset are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.

1.14 Provisions and contingent liabilities

The Company recognises a provision when there is a present obligation as a result of an obligating event that probably requires outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure of a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on a reliable estimate of such obligation.

1.15 taxation

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the Income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carried forward business loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets.

Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realised.

The Company offsets, the current (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

Minimum Alternative Tax (‘MAT’) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income-tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India (‘ICAI’), the said asset is created by way of a credit to the statement of profit and loss.








98



The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income-tax during the specified period.

1.16 earnings per share

The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. The number of equity shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares, which would have been issued on conversion of all potentially dilutive equity shares. Potential dilutive equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. The potentially dilutive equity shares have been adjusted for the proceeds receivable had the shares been actually issued at a fair value (i.e. the average market value of the outstanding shares). In computing the dilutive earnings per share, only potential equity shares that are dilutive and that either reduces the earnings per share or increases loss per share are included.


The Company applies intrinsic value method of accounting for stock options granted by the ultimate holding company to the employees of the Company after 1 April 2005. The intrinsic value of the employee services

received in exchange for the grant of such options is recognised as an expense. The amount recognised is spread over the vesting period which is also the period over which some of the scheme performance criteria relate. At each balance sheet date, the estimates of the number of options that are expected to become exercisable are revised. It recognises the impact of the revision of the original estimates, if any, in the statement of profit and loss over the remaining vesting period. The effect of uncertainty as to whether any performance criteria of share options will be met is dealt with by estimating the probability of shares vesting and therefore the cost is adjusted and readjusted for the probability of vesting in the vesting period.

1.18 Cash flow statement

Cash flows are reported using the indirect method, whereby the net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

1.19 government grants

Government grants are recognised under the income approach as per AS 12 – “Accounting for Government Grants” specified under Companies (Accounting Standard) Rules, 2006.

Grants related to depreciable assets are treated as deferred income which is recognised in the statement of profit and loss on a systematic and rational basis over the useful life


(Rs.)

2.1 Share capital As at 31 March 2016

Authorised320,000,000 (previous year: 320,000,000) equity shares of Rs. 10 each 3,200,000,000

3,200,000,000 Issued, subscribed and paid-up313,170,736 (previous year: 313,170,736) equity shares of Rs. 10 each fully paid up 3,131,707,360

3,131,707,360

(a) Reconciliation of the number of shares outstanding at the beginning and at the end of the year

Name of the share holder As at 31 March 2016

No. of shares Amount (Rs.)

Equity sharesAt the commencement of the year 313,170,736 3,131,707,360

Add: Issued during the year - -

At the end of the year 313,170,736 3,131,707,360

(d) List of persons holding more than 5 percent shares in the Company

Name of the share holder As at 31 March 2016No. of shares % holding

Equity sharesSABMiller Asia BV 162,086,038 51.76

SABMiller Breweries Private Limited 142,075,317 45.37

(b) Rights, preferences and restrictions attached to equity sharesThe Company has issued only one class of equity shares having a par value of Rs. 10 each. All equity shares rank equally with regard to dividends and share in the Company's residual assets. Each holder of equity shares is entitled to one vote per share.

(c) Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates

Name of the share holder As at 31 March 2016

Equity shares of Rs. 10 each, fully paid-up

I) SABMiller Asia BV 162,086,038

II) Step-down subsidiaries of SABMiller plc, the ultimate holding company, other than at I above - SABMiller Breweries Private Limited 142,075,317 - SABMiller India Holdings 5,590,817 - Austindia Pty Ltd 1,651,174

(e) Number of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash/ issued as bonus shares/ bought back (during five years immediately preceding 31 March 2016)

31 March 2016 31 March 2015 31 March 2014 31 March 2013 31 March 2012

Equity shares allotted pursuant to a contract

- - - 7,241,991 -

Bonus shares issued - - - - -

Equity shares bought back - - - - -


99



(Rs.)

2.2 Reserves and surplus As at 31 March 2016

Capital reserve 2,000,000

Securities premium account 9,576,907,748

Amalgamation adjustment reserve/ (deficit) account (1,029,743,130)

General reserve 1,218,399,316

(Deficit) in the statement of profit and loss

Opening balance (8,068,533,375)

Add: (Loss) for the year (500,472,753)

(8,569,006,128)

1,198,557,806

(Rs.)

2.3 Long-term borrowings As at 31 March 2016

Unsecured Term loans

Loans and advances from related parties (refer to note 2.36)

- External commercial borrowings 7,287,225,000

- Others 90,905,652

7,378,130,652

(b) There have been no defaults in repayment of principal and interest as at 31 March 2016 (previous year: Nil). (c) The Company has entered into an interest rate swap arrangement during the year ended 31 March 2016 to pay fixed interest in the range of 2.40% - 3.18% per annum and receive floating LIBOR with a spread ranging from 0.60% - 2.35% per annum in relation to its ECB from related party.

(Rs.)

Due for repayment in financial year As at 31 March 2016

ECB from related party (SABMiller Asia BV)2016-17 * 1,943,648,917

2018-19 993,712,500

2019-20 1,192,455,000

2020-21 1,788,682,500

2022-23 3,312,375,000

* Balance as at 31 March 2016 has been disclosed under current maturities of long-term debt (refer to note 2.8).

(a) terms of repayment :

Particulars Repayment terms Interest rate Currency swap premium

External commercial borrowings from related party (SABMiller Asia BV)

Repayable in a single bullet payment at the end of the term for each drawdown. Refer to table below for year-wise details on amount repayable.

LIBOR + 60 to 235 basis points

4.42% to 7.33%

Other loans and advances from re-lated party (SKOL Beer Manufacturing Company Limited)

Not repayable before 1 April 2018 9% per annum -





100



(Rs.)

2.4 Other long-term liabilities As at 31 March 2016

Deposits from customers and del-credere agents 94,390,001

Deposits received from contract bottlers 10,000,000

Deferred revenue 12,578,841

Retention dues 2,027,188

118,996,030

(Rs.)

2.5 Long-term provisions As at 31 March 2016

Provision for gratuity (refer to note 2.33) 172,378,202

Provision for compensated absences 71,644,904

244,023,106

(Rs.)

2.7 Trade payables As at 31 March 2016

- Due to micro and small enterprises (refer to note 2.40) 16,695,157

- Due to other creditors 1,671,725,847

- Acceptances 394,656,385

2,083,077,389

(Rs.)

2.6 Short-term borrowings As at 31 March 2016

Loan repayable on demand

Unsecured

- from banks

- bank overdraft 693,694,585


Unsecured

Working capital loans

- from banks 2,150,000,000

- from financial institution 1,000,000,000

Commercial paper issued to financial institutions 3,000,000,000

6,843,694,585

(a) Working capital loans from banks and financial institutions are due for repayment or renewal within a period of 12 months.

(b) There has been no defaults in repayment of principal and interest as at 31 March 2016.

(c) Commercial paper having face value of Rs. 3,000,000,000 have been issued at a discount of 8.15% - 8.80%. The maturity dates of

the commercial papers are 22 June 2016 and 23 June 2016 for Rs. 2,000,000,000 and Rs. 1,000,000,000 respectively.


101



(Rs.)

2.8 Other current liabilities As at 31 March 2016

Current maturities of long term debts (refer to notes 2.3 and 2.36) 1,943,648,917

Interest accrued but not due on borrowings 202,581,424

Payable to related parties for expenses (refer to note 2.36) 160,259,265

Book overdraft 187,997,905

Excise duty payable 526,410,335

Other liabilities

- statutory dues 511,181,612

- creditors for capital goods 210,023,293

- deferred revenue 11,907,021

- for expenses 2,618,582,096

6,372,591,868

(Rs.)

2.9 Short-term provisions As at 31 March 2016

Provision for compensated absences 12,529,203

Provision for claims (refer to note 2.35) 570,110,536

Provision for fringe benefit tax (net of advance tax) 5,047,648

Provision for income-tax (net of advance tax and tax deducted at source) 19,812,265

607,499,652





102



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98,3

69

2,9

71,2

50,1

15

11,

861,

939,

246

211

,460

,416

1

31,7

27,7

93

79,

525,

750

19,

841,

712

15,

943,

879,

191

3,4

10,9

20,2

45

234

,612

,429

3

,645

,532

,674

1

9,58

9,41

1,86

5

Accu

mul

ated

dep

reci

atio

n

As

at 1

Apr

il 20

15

- 1

2,00

1,99

1 1

3,85

8,63

3 7

28,8

69,2

02

5,2

65,1

14,3

06

135

,022

,864

6

0,77

5,71

5 2

8,06

7,12

6 6

,531

,298

6

,250

,241

,135

1

,573

,155

,421

1

41,9

13,0

82

1,7

15,0

68,5

03

7,9

65,3

09,6

38

Cha

rge

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g th

e ye

ar

- 6

46,1

40

319

,024

1

41,0

25,6

18

818

,081

,099

2

9,45

7,82

8 1

6,37

0,92

6 8

,389

,010

2

,715

,424

1

,017

,005

,069

1

70,5

46,0

12

27,

214,

536

197

,760

,548

1

,214

,765

,617

Del

etio

ns

- -

- (1

8,14

0,51

6) (2

9,70

5,91

2) (7

93,8

90)

(2,8

85,3

75)

(759

,688

) (9

7,50

0) (5

2,38

2,88

1) -

- -

(52,

382,

881)

Adj

ustm

ents

-

593

,724

(4

,479

,288

) 4

,156

,333

3

8,38

6,62

3 (4

9,62

7,33

8) (6

,923

,536

) -

(1,6

30,4

49)

(19,

523,

932)

(2,6

11,7

46)

6,0

37,9

11

3,4

26,1

66

(16,

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766)

As

at 3

1 M

arch

201

6 -

13,

241,

855

9,6

98,3

69

855

,910

,637

6

,091

,876

,116

1

14,0

59,4

64

67,

337,

731

35,

696,

448

7,5

18,7

74

7,1

95,3

39,3

91

1,7

41,0

89,6

88

175

,165

,529

1

,916

,255

,217

9

,111

,594

,608

Prov

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n fo

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pairm

ent

As

at 1

Apr

il 20

15

10,

400,

000

22,

458,

966

- -

- -

- -

- 3

2,85

8,96

6 -

- -

32,

858,

966

Char

ge/ (

reve

rsal

) dur

ing

the

year

- -

- -

- -

- -

- -

- -

- -

As

at 3

1 M

arch

201

6 1

0,40

0,00

0 2

2,45

8,96

6 -

- -

- -

- -

32,

858,

966

- -

- 3

2,85

8,96

6

Net b

lock

As o

n 31

Mar

ch 2

016

587

,851

,364

2

4,48

3,60

5 -

2,1

15,3

39,4

78

5,7

70,0

63,1

30

97,

400,

951

64,

390,

062

43,

829,

302

12,

322,

938

8,7

15,6

80,8

33

1,6

69,8

30,5

57

59,

446,

900

1,7

29,2

77,4

57

10,

444,

958,

291

Note

s:

(i)

The

com

pany

doe

s no

t hav

e an

y as

set p

urch

ased

on

finan

ce le

ase.

(ii)

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dee

ds o

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mov

able

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of c

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f lan

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ld in

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t are

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ly n

ot in

pos

sess

ion

with

the

man

agem

ent.


103






104

(Rs.)

2.11 Non-current investments As at 31 March 2016

Non-trade, at cost


80,000 fully paid-up equity shares of Rs. 3 each in Vulcan Leasing and Investments Limited 80,000

295 fully paid-up equity shares of Rs. 100 each in Haryana State Cooperative Bank Limited 29,500

109,500

Less: Provision for, other than temporary, diminution in the value of investments (109,500)

-

Investments in government or trust securities - unquoted

National Savings Certificates 2,256,323

Indira Vikas Patra 26,550

2,282,873

Investment in bonds - quoted

2 units of 8% bonds of Gujarat Urja Vikas Nigam Limited of face value Rs. 70,000 each 140,000

70 units of 9.95% bonds of State Bank of India of face value Rs. 10,000 each 700,000

1 unit of 8.75% bond of Oriental Bank of Commerce of face value Rs. 1,000,000 1,000,000

1 unit of 8.70% bond of Power Finance Corporation Limited of face value Rs. 1,000,000 1,000,000

2,840,000

5,122,873

Aggregate market value of quoted investments 2,840,000

Aggregate provision for diminution in value of investments (109,500)


(Rs.)

2.12 Long-term loans and advances As at 31 March 2016


Capital advances 260,697,940

Security deposits 127,832,749

Rental deposits 39,217,051

Advance tax and tax deducted at source (net of provision for income-tax) 244,399,330

Fringe benefit tax (net of provision for fringe benefit tax) 1,973,463

Minimum alternate tax credit entitlement 3,250,000

Loans and advances to related parties (refer to notes 2.36 and 2.43) 1,466,653

Advance to contract bottler 301,984,876


- Prepaid expenses 5,818,438

- Others 39,545,011

1,026,185,511

Unsecured, considered doubtful

Advance to contract bottler 65,000,000

Other loans and advances 87,666,065

152,666,065

Less: Provision for doubtful loans and advances (152,666,065)

-

1,026,185,511



105

(Rs.)

2.13 Other non-current assets As at 31 March 2016


Deposit made under protest 460,761,574

Derivative financial assets 257,190,000

Balances with banks

- in margin money deposit accounts maturing after 12 months 20,652,387

738,603,961


(Rs.)

2.15 Trade receivables As at 31 March 2016

Unsecured

Outstanding for a period exceeding six months

Considered good -

Considered doubtful 619,812,901

Less: Provision for doubtful debts (619,812,901)

-

Others

Considered good 9,006,162,746

Considered doubtful 84,261,279

9,090,424,025

Less: Provision for doubtful debts (84,261,279)

9,006,162,746

9,006,162,746

(Rs.)

2.14 Inventories As at 31 March 2016

Raw materials 1,445,521,698

Goods-in-transit (raw materials) 19,546,723

Work-in-progress 236,684,611

Finished goods 981,451,681

Goods-in-transit (finished goods) 9,361,384

Stores and spares 477,208,815

Stock-in-trade 445,075

3,170,219,987

Refer note 1.10 of significant accounting policies on disclosure of method for valuation of inventories.






106

(Rs.)

2.16 Cash and bank balances As at 31 March 2016

Cash and cash equivalents

Balances with banks

- in current accounts 368,601,632

- in exchange earners foreign currency account 14,452,279

383,053,911


(Rs.)

2.17 Short-term loans and advances As at 31 March 2016


Loans and advances to related parties (refer to note 2.36) 17,951,310

Others

- Loans and advances to employees 3,022,727

- Advances for supply of goods and rendering of services 144,338,758

- Duty drawback receivable 29,268,190

- Prepaid expenses 232,305,348

- Advance to contract bottler 65,116,547

- Balances with excise and other government authorities 1,076,873,398

- Interest accrued but not due 1,489,037

1,570,365,315

(Rs.)

2.19 Other operating revenues For the year ended 31 March 2016

Income from contract bottling (refer note 2.26) 690,714,110

Sale of spent malt and scrap 342,466,589

Duty draw back on exports 28,456,884

Royalty income 29,583,646

1,091,221,229

(Rs.)

2.18 Other current assets As at 31 March 2016

Derivative financial assets 182,163,703

Unamortised discount on issue of commercial paper 57,904,451

240,068,154



107

(Rs.)

2.20 Other income For the year ended 31 March 2016

Interest income 30,726,768

Net gain on foreign currency translation and transactions 33,409,610

Other non-operating income

- Profit on sale of fixed assets, net 28,897,775

- Release of deferred government grants (refer note 2.41) 12,914,978

- Miscellaneous income 28,371,537

134,320,668

(Rs.)

2.21 Changes in inventories of finished goods, work-in-progress and traded goods For the year ended 31 March 2016

Opening stock


Finished goods 1,503,078,146

Stock-in-trade 16,380,654

1,756,411,124

Less: Excise duty on opening stock 836,875,792

(A) 919,535,332

Closing stock


Finished goods, including in transit 990,813,065

Stock-in-trade 445,075

1,227,942,751

Less: Excise duty on closing stock 596,551,548

(B) 631,391,203

Decrease in finished goods, work-in-progress and traded goods (A-B) 288,144,129


(Rs.)

2.22 Employee benefits expense For the year ended 31 March 2016

Salaries and wages 1,570,944,830

Contributions to

- provident and other funds 63,271,105

- gratuity (refer to note 2.33) 15,297,599

Compensated absences 22,449,541

Staff welfare expense 50,465,687

1,722,428,762






108

(Rs.)

2.23 Finance cost For the year ended 31 March 2016

Interest expense * 965,368,342

Other borrowing costs 145,295,061

1,110,663,403

* net of borrowing cost capitalised amounting to Rs. 2,965,068


(Rs.)

2.24 Other expenses For the year ended 31 March 2016

Sales scheme expenses 876,275,071

Commission on sales 377,263,629

Freight outward 1,551,271,232

Power and fuel 704,183,935

Advertisement and publicity 1,297,903,945

Management group service charges * 142,146,615

Rates and taxes 281,925,270

Legal and professional 157,654,810

Clearing and forwarding 374,815,851

Travel and conveyance 192,541,173

Consumption of stores and spare parts 211,849,298

Rent (refer to note 2.39) 136,489,763

Repairs

- buildings 26,585,014

- plant and machinery 176,006,501

- others 101,241,687

Insurance 34,585,577

Provision for doubtful debts 132,882,654

Provision for doubtful loans and advances 65,255,934

Bad and doubtful debts written off 438,063

Doubtful loans and advances written off 136,456

Provision for claims, net (refer to note 2.35) 44,509,029

Miscellaneous 714,672,266

7,600,633,773

* includes Rs 196,884,255 credit pertaining to previous year pursuant to a credit note issue by the related group entity during the current year.



109

2.25 Contingent liabilities and other commitments (Rs.)


(i) Contingent liabilities

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

a) Sales tax matters 597,362,498

b) Excise matters 19,931,526

c) Service tax matters 224,456,391

d) Custom matters 261,555

e) Other matters 173,149,023

(ii) Commitments

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for

1,621,555,857

b) Other commitments

- Purchase of raw materials (Hops and Cans) 840,215,023

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


As auditor

- Statutory audit 14,450,000

- Tax audit 1,000,000

Reimbursement of expenses 786,440

a) details of finished goods (including goods in transit) and turnover (gross) (Rs.)


Opening stock 1,503,078,146

Sales (gross of excise duty) 35,985,661,562

Closing stock 990,813,065


2.26 Income from contract bottling operations pertains to the revenue share the Company has earned on sales made by the tie-up units (‘contract bottlers’). These revenues are recorded on a net basis in order to comply with relevant statutory regulations, where by tie-up units raise invoices on their customers, discharge statutory dues and taxes and record sales on a gross basis in the financial statements. The contract bottling agreement further specifies that the dealing between the Company and the contract bottlers is on a principal to principal basis. The above practice is consistent with prevalent industry practice.

2.28 Additional information pursuant to general instructions for preparation of the statement of profit and loss






110


b) details of traded goods (Rs.)


Opening stock 16,380,654

Purchases 738,059,596

Sales 1,199,928,806

Closing stock 445,075

c) Consumption of raw materials and packing materials (Rs.)


Malt (including raw barley used directly in manufacturing process) 1,372,943,843

Bottles 3,146,579,369

Flakes 919,403,752

Cans 1,507,095,568

Others * 1,891,171,290

8,837,193,822

* Individual items are less than 10% of the total value of consumption.

d) Consumption of imported and indigenous raw materials and packing materials


Amount (Rs.) %

Imported 224,240,580 3

Indigenous 8,612,953,242 97

8,837,193,822 100

e) Consumption of imported and indigenous stores and spares


Amount (Rs.) %

Imported 34,628,237 16

Indigenous 177,221,060 84

211,849,298 100



111


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


Loss for the year attributable to equity shareholders (500,472,753)

Weighted average number of equity shares of Rs.10 each used for calculation of basic and diluted earnings per share

313,170,736

Basic and diluted earnings per share (1.60)

2.30 value of imports on CIF basis (Rs.)


Raw materials 158,746,203

Stores and spares 32,069,139

Capital goods 124,627,499

315,442,841

2.31 Expenditure in foreign currency (accrual basis) (Rs.)


Travel and conveyance 8,375,281

Management group service charge * 92,580,184

Salaries, wages and bonus 20,852,183

Interest expense * 452,719,314

Legal and professional 6,939,136

Others 105,516,350

686,982,446

* net of withholding tax and service tax, as applicable

2.32 Earnings in foreign currency (accrual basis) (Rs.)


Export sales at FOB value 901,624,644

2.33 gratuity

The Company has a gratuity plan for the employees of the Company. Every employee who has completed 5 years or more of service is eligible for gratuity on separation, worked out at 15 days salary (last drawn salary) for each completed year of service. The obligation under the scheme is partially funded by contributions being made towards qualifying insurance policies obtained from the insurer.






112


Statement of profit and loss

Net employee benefits expense (recognised in employee benefits expense) (Rs.)


Current service cost 20,957,177

Interest cost on defined benefit obligation 14,958,268

Expected return on plan assets (2,323,215)

Net actuarial (gain) recognised for the year (18,294,631)

Net benefits expense 15,297,599

Balance sheet

details of provision for gratuity (Rs.)


Defined benefit obligations 205,741,114

Less: Fair value of plan assets 33,362,912

Plan liabilities 172,378,202

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


Opening defined benefit obligation 191,795,550

Current service cost 20,957,177

Interest cost 14,958,268

Benefits paid (4,900,783)

Actuarial (gain) on obligation (17,069,098)

Closing defined benefit obligation 205,741,114

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


Opening fair value of plan assets 32,138,238

Expected return on plan assets 2,323,215

Actuarial gain on plan assets 1,225,534

Contributions by employer 2,576,708

Benefits paid (4,900,783)

Closing fair value of plan assets 33,362,912

Major categories of plan assets as a percentage of the fair value of total plan assets (Rs.)


Qualifying insurance policies from the insurer 100%



113


Amounts for the current and previous four years (Rs.)

Particulars As at31 March 2016

As at31 March 2015

As at31 March 2014

As at31 March 2013

As at31 March 2012

Defined benefit obligation 205,741,114 191,795,550 150,874,487 144,274,427 114,415,667

Plan assets 33,362,912 32,138,238 30,179,970 34,272,013 32,598,237

deficit (172,378,202) (159,657,312) (120,694,517) (110,002,414) (81,817,430)

Experienced adjustments on plan liabilities

19,903,117 (944,740) (2,526,892) (7,431,281) (593,065)

Experienced adjustments on plan assets

1,225,534 (2,200,628) (832,210) 2,664,285 148,949

Principal assumptions used in determining gratuity benefit obligations for the Company’s plan


Discount rate 7.70%

Expected rate of return on plan assets 7.50%

Salary increase 9.00%

Employee turnover 1% to 15% across categories

Retirement age 58 Years

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant

factors such as supply and demand factors in the employment market.

The overall expected rate of return on plan assets is determined based on the market prices prevailing on that date, applicable to the

period over which the obligation is to be settled.

2.34 Segmental reporting Business segments The Company’s sole business segment is ‘Manufacture and Sale of Beer’. Consequently, the requirement for separate

business segment disclosures as required under AS 17 – ‘Segment Reporting’ is not applicable.

geographical segments The Company operates in two principal geographical areas of the world: India and Rest of the world.

The accounting principles used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments. Income and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while the remainder of costs are apportioned on an appropriate basis. Certain expenses are not specifically allocable to the individual segments as these expenses are common in nature. The Company therefore believes that it is not practicable to provide segment disclosure relating to such expenses and accordingly such expenses are separately disclosed as unallocated and directly charged against total income.

Certain segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and consist principally of fixed assets, inventories, trade receivables and loans and advances. Segment liabilities include trade payables and other operating liabilities and provisions. Certain assets and liabilities that are not specifically allocable to the individual segments have been separately disclosed as unallocated.






114


(Rs.)

Revenue from sale of products (net of duties, taxes and discount)


India 18,884,249,808

Rest of the world 901,624,644

19,785,874,452

(Rs.)

Segment assets As at 31 March 2016

India 28,109,546,484

Rest of the world 165,795

28,109,712,279

(Rs.)

Capital expenditure (on cash basis) For the year ended 31 March 2016

India 2,455,059,441

Rest of the world -

2,455,059,441

2.35 Provision for claims The provisions are utilised to settle previously anticipated and determined adverse outcomes of legal cases against the

Company. The provision is based on independent advice obtained by the Company from external legal counsel. The time frame of utilisation of the provision is determined by the course of the legal proceedings.

(Rs.)


Provision for indirect-tax cases

Opening balance 471,349,245

Add: Addition during the year 48,568,241

Less: Unused amounts reversed during the year (4,059,212)

Closing balance 515,858,274

Provision for water charges

Opening balance 54,252,262

Add: Addition during the year -

Less: Utilised during the year -

Closing balance 54,252,262

570,110,536



115


Provision for indirect-tax cases Several litigations are in process against the Company relating to Excise, Sales tax, Service tax and Customs duty related

matters. In respect of such provision, the disclosures required by Accounting Standard 29 - 'Provisions, Contingent liabilities and Contingent assets' have not been provided in accordance with paragraph 72 of Accounting Standard 29 - 'Provisions, Contingent liabilities and Contingent assets'. Timing of outflow of resources will depend upon timing of decision of these litigations.

Provision for water charges The Maharashtra Industrial Development Corporation (‘MIDC’) had, vide order number EE/E&M/785/2005 dated 25 May 2005,

made a demand for increase in water charges with retrospective effect from 1 November 2001. Waluj Industries Association (‘the Association’), of which the Company is a member has filed a writ petition against such demand in the Honorable High Court of Bombay. The Honorable High Court of Bombay has passed an order against the appeal and has directed the Association to release the demand amount with retrospective effect. Accordingly the Company has made the payment of the principal amount outstanding. However with respect to interest for which the above provision is recognised, the Association has given a representation on behalf of the Company for waiver of interest demanded by MIDC. The matter is currently pending final settlement.

2.36 Related parties

(i) Names of related parties and description of relationship with the Company:

Enterprises where control exists

Ultimate holding company SABMiller plc

Holding company SABMiller Asia BV

Significant influence SABMiller Breweries Private Limited

Other related parties with whom transactions have taken place

Fellow subsidiaries S.p.A. Birra Peroni

SKOL Beer Manufacturing Company Limited



MBL Breweries Limited (formerly known as MBL Property Developers Limited)

SABMiller Europe AG


Trinity Procurement GmbH

SABMiller Procurement GmbH

MillerCoors LLC



SABMiller Vietnam

CUB Pty Ltd

SABMiller Global Business Services India Private Limited

Kgalgadi Breweries (Pty) Ltd

Key managerial personnel Shalabh Seth , Managing Director






116




SABMiller Breweries Private LimitedInterest income 403,629 Expenses incurred by the Company on behalf of related party 225,834

MBL Breweries Limited (formerly known as MBL Property developers Limited)Expenses incurred by the Company on behalf of related party 153,200

SABMiller plcExpenses incurred by related party on behalf of the Company 3,212,700 Expenses incurred by the Company on behalf of related party 3,844,212

SABMiller Management (IN) BVManagement group service charge 209,094,603 Credit received against management group service charge for earlier year 196,395,416

SABMiller Corporate Services LtdManagement group service charge 204,219,747 Credit received against management group service charge 98,820,078

SkoL Beer Manufacturing Company Limited Interest expense 7,648,223 Unsecured loan taken, net (1,535,000)

MillerCoors LLCPurchase of raw materials 7,481,744

SABMiller (Asia) LimitedExpenses incurred by the Company on behalf of related party 1,817,413

SABMiller Procurement gmbhCommission paid on purchase of raw materials 127,300,249

Miller Brewing International Inc.Royalty expenses (grouped under miscellaneous expenses) 15,802,834

SABMiller Asia BVCommercial paper issued/ (repaid) (3,000,000,000)Unsecured loan taken/ (repayment), net 5,334,829,515 Interest expense 149,649,939

SABMiller Asia - AfricaExpenses incurred on behalf of other companies 519,701

CuB Pty LtdExpenses incurred on behalf of other companies 1,757,750



117




SABMiller global Business Services India Private LimitedPurchase of capital goods 13,970,527 Purchase of others assets 9,788,475 Expenses incurred on behalf of other companies 33,051,126

kgalgadi Breweries (Pty) LtdExpenses incurred on behalf of other companies 924,996

Shalabh SethRemuneration 29,635,992

(iii) Amount outstanding as at the balance sheet date: (Rs.)

As at 31 March 2016

SABMiller Breweries Private LimitedLong-term loans and advances 1,466,653 Short-term loans and advances 3,016,661

SABMiller plcOther current liabilities 1,140,928

Miller Brewing International Inc.Other current liabilities 4,412,848

SkoL Beer Manufacturing Company LimitedLong-term borrowings 90,905,652

SABMiller Corporate Services LtdOther current liabilities 92,673,640

SABMiller europe AgOther current liabilities 75,420

SABMiller Asia BVLong-term borrowings 7,287,225,000 Other current liabilities 1,943,648,917

S.p.A. Birra PeroniOther current liabilities 236,017

SABMiller Procurement gmbhOther current liabilities 50,864,219

MillerCoors LLCOther current liabilities 5,537,485

SABMiller Asia - AfricaShort-term loans and advances 20,902






118


(iii) Amount outstanding as at the balance sheet date: continued (Rs.)

As at 31 March 2016

SABMiller Vietnam Short-term loans and advances 158

CuB Pty LtdShort-term loans and advances 3,098,729

SABMiller (Asia) LimitedShort-term loans and advances 1,369,009

MBL Breweries Limited (formerly known as MBL Property developers Limited)Short-term loans and advances 191,200

SABMiller global Business Services India Private LimitedShort-term loans and advances 9,329,654

kgalgadi Breweries (Pty) LtdShort-term loans and advances 924,996

trinity Procurement gmbhOther current liabilities 5,318,708

2.37 deferred tax assets/ (liabilities) (Rs.)


deferred tax assets

Investments 36,204

Trade receivables 225,299,113

Loans and advances 43,929,507

Provision for retirement benefits 84,823,890

Provision for claims 151,377,132

Unabsorbed depreciation * 880,632,942

1,386,098,789

deferred tax liabilities

Fixed assets 1,386,098,789

1,386,098,789

deferred tax asset/ (liabilities), net -

* In view of the accumulated losses and in accordance with AS 22 – “Accounting for taxes on income”, deferred tax assets on unabsorbed depreciation and other temporary timing differences have been recognised only to the extent of those timing differences, the reversal of which will result in sufficient taxable income.



119


(Rs.)

Period As at 31 March 2016

Not later than 1 year 48,068,000

Later than 1 year and not later than 5 years 105,034,400

Later than 5 years -

2.38 derivative instruments and un-hedged foreign currency exposure derivative instruments

Particulars Purpose As at 31 March 2016

Interest rate swap Towards repayment of interest on foreign currency loans at a fixed rate from floating rate

USD 487,500

Forward contract Towards repayment of foreign currency loans USD 37,339,204

Currency swap contract Towards repayment of foreign currency loans USD 102,000,000

un-hedged foreign currency exposures

Underlying asset/ liability Foreign currencyAs at31 March 2016

Amount in foreign currency Amount (Rs.)

Balances with banks USD 218,213 14,452,279

Trade payables USD 315,326 20,889,541

GBP 6,195 589,410

EURO 747,013 56,319,280

Payable to related parties EURO 2,855 236,017

USD 3,987,502 264,162,035

Capital Creditors USD 271,200 17,965,644

EURO 600,828 45,284,406

2.39 operating leases The Company was obligated under non-cancellable operating leases for a brewing facility and other office premises

which were renewable at the option of both the lessor and lessee. Total rental expense under non-cancellable operating leases amounted to Rs. 23,300,000 for the year ended 31 March 2016. Future minimum lease payments under non-cancellable operating leases are as follows:

The Company is also obligated under cancellable lease for residential and office premises and motor vehicles which are renewable at the option of both the lessor and lessee. Total rental expense under cancellable operating leases amounted to Rs. 113,189,763 for the year ended 31 March 2016.






120

(Rs.)


(i) The principal amount remaining unpaid to any supplier as at the end of each accounting year; 14,048,578

(ii) The amount of interest paid by the Company along with the amounts of the payment made to the supplier beyond the appointed day during the year;

-

(iii)The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act;

-

(iv)The amount of interest accrued and remaining unpaid at the end of the year; and 2,646,579

(v) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise.

2,646,579


2.40 The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small and Medium Enterprises Development Act, 2006’ (‘the Act’). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2016 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

2.41 government grant

The Company is entitled to receive grant from Government of Maharashtra under Package Scheme of Incentives, 2007 towards capital expansion of units set up in the developing region of the State of Maharashtra. As at 31 March 2016, the Company has received a total grant of Rs. 211,803,000. The Company recognises the grant to the statement of profit and loss over the useful life of the asset in the proportion in which depreciation on related assets are charged. Accordingly an amount of Rs. 80,369,169, including release during the year amounting to Rs. 12,914,978, has been credited to the statement of profit and loss.


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.



121


(i) During the year ended 31 March 2016, the Group had the following share-based payment arrangements for the employ-ees of the Company.

SABMiller plc Share Award Plan 2008


Date of grant 1-Jun-15 /1-Dec-15

Number of shares granted 35,964

Method of settlement Equity

Contractual life 10 years

Vesting period 3 years

Vesting condition Achievement of a target growth in earning per share

SABMiller plc Stock Appreciation Rights Plan 2008


Date of grant 1-Jun-15

Number of shares granted 59,637

Method of settlement Equity

Contractual life 10 years

Vesting period 3 years

Vesting condition Achievement of a target growth in earning per share

(ii) Details of the activity of shares issued after 1 April 2005 under Executive Share Option Scheme [Approved and (No 2) Scheme] are as follows:

Particulars 31 March 2016

Number of Options


Outstanding at the beginning of the year 124,800 1,873

Granted during the year - -

Transferred in/ (out) during the year, net - -

Lapsed during the year 15,000 2,050

Exercised during the year 59,150 1,864

Outstanding at the end of the year 50,650 1,831

Exercisable at the end of the year 50,650 1,831

The weighted average share price at the date of exercise for stock options exercised during the year was Rs. 3,381. The options outstanding as at 31 March 2016 had a weighted average remaining contractual life of 5.51 years.






122


The details of the activity of shares issued after 1 April 2005 under SABMiller plc Share Award Plan 2008 are as follows:


Number of Options


Outstanding at the beginning of the year 42,374 -

Granted during the year 35,964 -

Transferred (out) during the year, net - -

Lapsed during the year 6,222 -

Vested during the year 15,500 -

Outstanding at the end of the year 56,616 -

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 Nil. The options outstanding as at 31 March 2016 had a weighted average remaining contractual life of Nil years.

The details of the activity of shares issued after 1 April 2005 under SABMiller plc Stock Appreciation Rights Plan 2008 are as follows:


Number of Options


Outstanding at the beginning of the year 164,747 3,170

Granted during the year 59,637 3,372

Transferred (out) during the year, net - -

Lapsed during the year 43,035 4,258

Exercised during the year 2,400 3,249

Outstanding at the end of the year 178,949 3,229

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 3,447. The options outstanding as at 31 March 2016 had a weighted average remaining contractual life of 8.04 years.

The weighted average fair value of stock options granted during the year is Rs. 1,545. The estimate of fair value on the date of the grant was made using the Binomial model valuation and Monte Carlo model with the following assumptions: SABMiller plc operates a variety of equity-settled share-based compensation plans for few select employees of the Company, costs of which are not re-charged to the Company.


Share price at the grant date Rs 2848 / Rs 3944

Exercise price at the grant date Rs.2879/ Rs.Nil

Expected volatility 21.4%/ Nil

Contractual life (vesting and exercise period) 10 years

Expected dividends 2.11%

Average risk-free interest rate 1.34%

The expected volatility was determined based on historical daily share price volatility of SABMiller plc share price.



123

(iii) Since the Company uses the intrinsic value method, the impact on the reported net loss and earnings per share is computed by applying the fair value based method. The Guidance Note requires the proforma disclosures of the impact of the fair value method of accounting of employee stock compensation in the financial statements. Applying the fair value based method defined in the said Guidance Note, the impact on the reported net loss and earnings per share would be as follows:

(Rs)


Net (loss) as reported (500,472,753)

Add: Employee stock compensation under intrinsic value method -

Less: Employee stock compensation under fair value method (71,805,542)

Proforma net income (572,278,295)

Earnings per share as reported

- Basic (1.60)

- Diluted (1.60)

Proforma earnings per share

- Basic (1.83)

- Diluted (1.83)


2.43 details of inter-corporate loans given

(a) Terms and conditions on which inter-corporate loans have been given

Party name Interest rate Repayment terms Purpose

SABMiller Breweries Private Limited 9.00% Not repayable before 1 April 2018 General

(b) Reconciliation of inter-company loans given as at the beginning and as at the end of the year (Rs)



At the commencement of the year 1,466,653

Add: Given during the year -

Less: Repaid during the year -

At the end of the year 1,466,653

2.44 The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.






124









Bangalore

Date: 7 June 2016



Bangalore

Date: 7 June 2016

2.45 Additional information, as required under schedule III to the Companies Act, 2013 of the enterprises consolidated as a subsidiary

Name of the subsidiary Net assets Share in profit/ (loss)

As a % of consolidated net

assets Amount (Rs)

As a % of consolidated profit

or (loss)Amount (Rs)

SABMiller India Limited (Parent) 100% 4,331,466,553 100% (499,972,346)

SPR Distilleries Private Limited (Subsidiary) 0% (1,201,387) 0% (500,407)

100% 4,330,265,166 100% (500,472,753)


SABMiller India Limited Regd. Office: Unit No.301-302, Dynasty Business Park, 3rd Floor

Andheri-Kurla Road, Andheri (East), Mumbai 400 059 Tel: (022) 39499999 | Fax: (022) 30913666

Website: www.sabmiller.in CIN: U65990MH1988PLC049687

7th June 2016

Dear Shareholder,

As a responsible corporate citizen, your Company welcomes and supports the “Green Initiative” taken by the Ministry of Corporate Affairs, Government of India (MCA), vide its Circular Nos. 17/2011 dated April 21, 2011 and 18/2011 dated April 29, 2011 and provisions of Companies Act, 2013. Accordingly, the Company is desirous of effecting electronic delivery of documents including the Annual Report to you on an email ID to be registered by you for this purpose.

For supporting this initiative:

1) If you hold shares in electronic form - please intimate your email ID to your Depository Participant (DP). The same will be deemed to be your registered email address for serving notices/documents.

2) If you hold shares in physical form - please intimate your email ID to the Company’s Registrars & Transfer Agents (RTA) at the following address:

Sharex Dynamic (India) Pvt. Ltd. (Unit: SABMiller India Limited) Unit No.1, Luthra Ind. Premises, Safed Pool Andheri Kurla Road Andheri (East) Mumbai - 400072 Tel: 28515606/ 5644/ 6338 Fax: 28512885

The request letter should be signed by the first/sole holder as per the specimen signature recorded with the RTA and should mention your correct folio number. Alternatively, you may send a scanned copy of your above request letter on [email protected]

If you do not register your mail ID, a physical copy of the Annual Report and other communication/documents will be sent to you free of cost, as per the current practice.

The Annual Report and other communication sent electronically will also be displayed on the Company’s website www.sabmiller.in

We are sure that you will support this initiative of “Green Initiative” and co-operate with the Company to make it a success.

For SABMiller India Limited

Sridhar S Company Secretary


125


foRM No. Mgt – 11

AtteNdANCe SLIP

PRoxy foRM

Attendance by (Please tick the appropriate box) Member Proxy Authorized Representative

I hereby record my presence at the 27th Annual General Meeting of the Company being held on Tuesday, 23rd August, 2016 at 3.30 p.m at Janssen Delite Hall, Holy Spirit Hospital Campus, Mahakali Caves Road, Andheri (East), Mumbai 400 093.

Name of Shareholder / Proxy (IN BLOCK LETTERS) Shareholder’s/ Proxy’s Signature

Affix

Revenue

Stamp

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

CIN: U65990MH1988PLC049687

Name of the company: SABMILLER INDIA LIMITED

Registered Office: Unit No. 301-302, Third Floor, Dynasty Business Park, B Wing, Andheri Road, Andheri (East), Mumbai - 400059

Name of the Member(s):

Registered address:

Email Id:Folio No/Client Id & DP ID

I/We, being the Member(s) of________________________________shares of the above named company, hereby appoint:

1. Name : ______________________________________________________________________________________________________________

Address: _____________________________________________________________________________________________________________

E-mail Id: ________________________________________Signature: ___________________________________ or failing him

2. Name : ______________________________________________________________________________________________________________

Address:_____________________________________________________________________________________________________________

E-mail Id: ________________________________________Signature: ___________________________________ or failing him

3. Name : ______________________________________________________________________________________________________________

Address:_____________________________________________________________________________________________________________

E-mail Id: ________________________________________Signature: ___________________________________

as my/our proxy to attend and vote for me/us and on my/our behalf at the 27th Annual General Meeting of the Company, to be held on

Tuesday, 23rd August, 2016 at 3.30 p.m at Janssen Delite Hall, Holy Spirit Hospital Campus, Mahakali Caves Road, Andheri (East), Mumbai

400093 and at any adjournment thereof in respect of such resolutions as are indicated below:

Resolution Nos.

Signed this________________________________ day of ______________________________ 2016

Signature of shareholder:

Signature of Proxy holder(s):

1. Adoption of Accounts and Reports

2. Appointment of Director retiring by rotation

3. Appointment of Auditors

4. Appointment of Director

5. Appointment of Director

6. Appointment of Independent Director

7. Appointment of Independent Director

Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

SABMiller India LimitedRegd Office: Unit No. 301-302Third Floor, Dynasty Business Park

B Wing, Andheri Road, Andheri (East), Mumbai - 400059

CIN: U65990MH1988PLC049687


126


SABMiller AR 2015-16 B&W FINAL.indd 2 7/19/2016 6:31:59 PMSABMiller AR 2015-16 B&W FINAL.indd 2 7/19/2016 6:31:59 PM

SABMiller India Limited (formerly known as SkoL Breweries Limited)

Regd. Office: Unit No.301-302, Dynasty Business Park, 3rd Floor

Andheri-Kurla Road, Andheri (East), Mumbai 400 059

CIN: U65990MH1988PLC049687

www.sabmiller.in


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