Annual Report 2009/2010 - Colombo Stock Exchange

Operations Review

C h a i r m a n ' s S t a t e m e n t
2
CHAIRMAN'S STATEMENT
It gives me great pleasure to welcome all of you to our
th
14 Annual General Meeting and to present to you the
audited Financial Statements of the Company for the
st
year ended 31 March 2010.
The Company commenced the year in some
considerable difficulty; on the global front, world
leaders were still in the process of getting to grips with
the financial crisis, in Sri Lanka, the conflict in the
North had intensified considerably & for Lion it was
imperative that it addressed the issue of its balance
sheet weighed down by high gearing. I am pleased to
say that all three are now behind us.
In Sri Lanka, amidst much pressure from both home &
overseas a resolute President gave strong political
leadership to conclude a three decade long war. A
grateful nation gave President Rajapakse & his
administration a resounding mandate for a second
term in the recently concluded Presidential & General
Elections.
The financial crisis that threatened to paralyze global
economic growth was gradually brought under
control. The recovery will be slow but a recovery there
is & we must all be glad that the worst in behind us.
In September 2009, the successfully concluded Right
Issue helped correct the anomalies in the balance
sheet of Lion Brewery. The year also saw the Company
return to a reasonable level of profitability after a less
than satisfactory result in the previous period. Volumes
grew once optimism returned to the country at the
conclusion of the war. Tourist returned to Sri Lanka in
reasonable numbers although still much behind its true
potential. Interest rates too declined on the back of
lower inflation and the currency remained stable for
much of the year. That the Company was able to take
full advantage of the dramatic change in the
environment is a tribute to its multiple strengths of
Brand portfolio, world class distribution &
manufacturing systems, efficient logistics operations &
aggressive management.
Based on the results achieved during the year, I am
pleased to announce that the Board is recommending a
first & final dividend of Rs 3 per share. This dividend will
be free of tax in the hands of shareholders.
I foresee a period of stability & growth for Sri Lanka. The
Country has a peaceful environment & a stable, popular
& credible presidency & administration in place after
many a year. The focus on infrastructure development is
expected to continue. Tourist arrivals will increase
significantly. All these augur well for businesses in
general including your Company. On the alcohol policy
front, it is unlikely that changes for the worse will be
implemented since the focus will now be on growth and
development.
Based on these factors, I believe that your Company is on
the threshold of further growth in the year ahead. In
order to meet market demand it is necessary that we
expand capacity at the brewery & this is currently in
progress.
In India too we expect a period of sustained growth in
the year ahead. The economic environment continues to
improve at an impressive pace & with it the beer industry
is expected to grow at double digit rates. The Indian
business is still very much in an investment phase but this
is to be expected since establishing an appropriate
distribution & manufacturing footprint in such a large
geographical area is no small matter.
I extend my appreciation to all employees, especially the
Management Team, for it is their dedication &
commitment to the Company and its brands that laid the
strong platform for growth during the year under review.

CHAIRMAN'S STATEMENT
Your Company will emerge stronger in the year ahead
thanks to the positive environment that is now prevalent in
Sri Lanka. However, we continue to seek an appropriate
policy environment to forge a culture of responsibility in
alcohol consumption, since the lack of one is the only
drawback that the Company faces as of now.
I acknowledge with gratitude the continued patronage of
our valued customers & consumers, Agents, suppliers &
all other trading partners, both local & foreign and
bankers for the support extended during the year. My
grateful thanks also to our loyal shareholders for the
continued confidence in the Company & our brands so
aptly demonstrated at the time of the Rights Issue.
In September 2009, Mr. Mano Selvanathan, resigned as
Director of the Company. He has been a member of the
Board since its inception in 1996. Since that time,
through various phases of the Company, equally in times
of difficulty and success, Mano has been a tremendous
source of strength and inspiration to the Management
and the Board. Whilst thanking him for his invaluable
contribution to the Company, we remain confident, that
he will continue to give of his time & wisdom generously
when needed, as he continues to be a Director of the
parent company.
During the year under review, Mr Roy Bagattini,
Executive Vice President of Carlsberg Breweries
responsible for its Asian operations joined your Board.
Roy will bring with him a wealth of knowledge &
experience acquired during a successful career in the
beer industry in many parts of the world including in
India. Roy is also the Chairman of Carlsberg India (Pvt)
Ltd, the joint venture in which the Company has a stake.
We look forward to his contribution & advice in the years
ahead.
Mr. Krishna Selvanathan joined the Board of the
Company during the year under review. On behalf of the
Board I welcome Krishna and look forward to working
with him closely.
In conclusion, I extend my thanks & appreciation to the
Audit Committee for their valued contribution & to my
colleagues on the Board for their guidance & support.
(Sgd.)
L.C.R. de C. Wijetunge
Chairman
Colombo
th
7 May 2010
3C h a i r m a n ' s S t a t e m e n t
2

R e v i e w o f O p e r a t i o n s
4
OPERATIONS REVIEW
From most perspectives it was a momentous year.
May 2009 brought closure to a near 30 year conflict that
had deprived Sri Lanka the stable environment it needed
to pursue growth & prosperity. Some may suggest that
the means used to bring terrorism to an end were
controversial. Yet the President and his administration
must be given the credit for being bold & standing firm in
the face of much pressure from both local & overseas
sources. The President's determination to be led by his
conscience even in the face of severe pressure augurs
well for the Nation; it is an indication that he can take the
hard but necessary decisions to drive Sri Lanka forward.
The Defense establishment too must take pride in
completing the task handed over to them with focus,
commitment & dedication.
In January 2010 the incumbent President was re-elected
by a resounding majority extending his term of office by
a further 6 years. A General Election followed in April
2010, bringing the coalition led by his party to power
with a handsome majority in Parliament.
Thus on the political front, an environment of stability has
returned to Sri Lanka after many a year.
The Government's development program maintained
momentum amidst murmurs of discontent on issues such
as law & order, human rights & good governance. Roads
across the country are being modernized & expanded at
a pace whilst other large scale infrastructure projects
such as ports, airports and power are being brought on
stream steadily. The process of reconstruction in the
North & the East is also underway.
The conclusion of the conflict has meant that Sri Lanka is
once again a destination of choice for many holiday
makers across the globe. Within a few months of May
2009, hotels across the country enjoyed good levels of
occupancy. Internal tourism too has grown significantly
particularly to the North & East
Many Sri Lankans were deprived of visiting these areas
during the conflict but this is no longer the case. The
numbers that travelled to the North in the immediate
aftermath of the opening of the A9 road were
considerable.
The Sri Lankan economy faltered in the first two quarters
of 2009 under the weight of the conflict & the global
financial crisis. However, since then, the conflict was
brought to a conclusion, global commodity prices
reduced significantly and the Government concluded an
assistance package with the IMF stabilizing the currency
& reducing inflation sharply. The economy has
responded and in the final quarter of 2009, GDP growth
was an impressive 6%+.
The stock market responded favorably to these changes
in the environment. The growth in the ASPI during the
year under review was a remarkable 127% whilst the
Colombo Bourse was the second best performing
market in the world in calendar year 2009. Similarly
after many years business confidence moved upwards
steadily. In short, the “feel good” factor is slowly but
steadily re-emerging in the Sri Lankan environment.
Your company – anchored as it is to a portfolio of superb
brands, world class distribution & manufacturing
processes, innovative use of information technology &
sound management – took full advantage of the positive
changes in the environment.
On revenue of Rs 7.92 billion the Company generated a
profit before tax of Rs 632.69 million up from Rs 6.09
billion & Rs 81.89 million respectively in the previous
year whilst earnings per share rose to Rs 7.46 from Rs
0.90. The Company's gearing which stood at 53% at
the commencement of the financial year ended at a
healthy 16%, a result of both the Rights Issue concluded
in September 2009 & the improved operating
performance. Thus the Company concluded the
financial year with a return to a reasonable level of
profitability and a strong balance sheet.

OPERATIONS REVIEW
The single most important change in the operating
environment was the return to stability at the end of the
armed conflict. The North & East opened up for business
after many years & security conditions eased helping
people move about without hesitation. The return of
general optimism & business confidence helped drive
the economy forward. A significant increase in tourist
arrivals also contributed to the economy. The beer
market benefitted from the return to normalcy & peace.
The reduction in oil prices & tightened monetary policy
helped reduce inflation during the year under review. As
a result interest rates that rose well beyond 20% in the
previous year declined to single digits. The currency too
stabilized during the year under review on the back of a
narrower current account deficit. Since the Company
has significant exposure to foreign exchange
transactions, the stability in the currency was helpful.
Whilst commodity prices stabilized during the latter half
of 2009, this was not the case at the time your Company
confirmed its requirement for malt – its principal raw
material – for the year under review during late 2008.
As a result, the input cost of malt was significantly higher
than in the previous year. However, this cost increase
was partly off-set by prudent sourcing of other materials.
A plethora of taxes – both direct & indirect – continue to
burden the private sector. Not only are a number of
taxes levied on revenue but there are retrograde levies
such as cesses at the point of import as well. These are
commonly called “nuisance taxes” & for good reason.
Whilst the need for greater revenue at a time when
combating terrorism cannot be argued with, the
opportunity is now available to reform & re-structure the
tax system. The appointment of a Presidential
Commission on Taxation was a welcome move & its
outcome is widely awaited.
Alcohol Policy
The best that can be said of the alcohol policy governing
your Company's business is that it did not change
significantly during the year under review. There were a
few exceptions of which the new restriction imposed on
the transfer of a license is the most significant. Under this
new “administrative” rule, a licensee cannot transfer a
license to a new location. Thus licenses operated out of
rented premises will be subject to the whims & fancies of
the landlords. Critically, if the landlord were to refuse an
extension of the lease, the license would be of no value.
Such ad-hoc “rules” lend themselves to malpractices at
multiple levels.
The policy of “Mathata Thitha” continued to be in force
during the year. If the practical application of this policy
intends to reduce per capita consumption of pure alcohol
& prevent alcohol related harm, then your Company
extends its fullest & wholehearted support to it. Indeed in
a country where consumption of hard liquor –
be it legal or illegal - is the norm, there is a pressing
need to prevent alcohol related harm, both to the
consumer & to those in his vicinity.
There is sufficient evidence to suggest that soft alcohols
such as beer are viable means by which alcohol
consumption & related harm can be reduced in
environments where hard liquor is heavily consumed.
The Russian experience over the recent past is such an
example. During the year under review, excise taxes
applicable on soft alcohol remained stable, a positive
move much appreciated by the industry & your
Company.
During the year under review, there were signs that the
effort to curb the manufacture & distribution of illicit
alcohol was intensified. There is little doubt that policy
makers and implementing agencies have the best of
intentions. Yet the risk to reward ratio in the illicit alcohol
business is so skewed towards the latter that law
enforcement alone cannot succeed in curbing this
menace. Illicit alcohol will be curbed only if the
associated rewards are reduced to a level that makes
the activity unattractive.
Towards this end, legal alcohols particularly soft
alcohols bearing in mind the health related issues, need
to be more affordable & less difficult to access. Results
will not be evident overnight. Yet the quicker the start,
the earlier the results will be seen.
An alternative approach to curb the consumption of
illicit alcohol is consumer education. Yet, with economic
conditions being what they are in most parts of Sri
Lanka, a strategy that ignores affordability &
availability of legal alcohols is unlikely to succeed.
During the year under review the Company paid Rs
2,918.92 million as Excise Duty, up 22.71% from Rs
2,378.79 million paid in the previous year. In terms of
total taxes, the Company paid Rs 4,795.26 million as
against Rs 3,673.49 million in the previous year, an
increase of 30.54%.
Operating Results & Financial Position
On a turnover of Rs 7.92 billion, the Company returned
a profit of Rs 640.50 million, an overall margin of
8.09%. At the point of gross profit, the margin was
32.76%. The near 1% increase in gross margins was a
result of a focused effort to reduce input costs. That it
was achieved in the face of increased raw material
prices – particularly malt – is an indication that the
Company's efforts have been successful. Both critical
indicators i.e volumes & margins were above those of
the previous year.
R e v i e w o f O p e r a t i o n s
5

R e v i e w o f O p e r a t i o n s
OPERATIONS REVIEW
The level of margin returned by the beer business is a
reflection of the high taxation imposed on it - both in
terms of excise & revenue related levies –and the
complex manufacturing process that takes basic raw
materials & converts them into a liquid in a pack. On
year end Equity – including reserves – the return was an
acceptable 16%. Once again this is a significant
improvement over the previous year.
Overall operational costs increased by 17% driven
mainly by high inflation during the first half of the year,
higher than normal bottle breakages & greater
distribution costs arising from the increased access to the
markets of the North.
During the year under review, the Company placed
greater emphasis on the management of working
capital. As a result all key working capital indicators –
raw material & finished goods inventories, receivables &
payables – improved significantly.
In September 2009 the Company successfully concluded
a 3 for 5 Rights Issue. The issue was oversubscribed. Your
Company's ultimate parent the Carson Cumberbatch
Group & its JV partner, Carlsberg Breweries of Denmark
subscribed for their respective allotments in full. The
proceeds of the Rights were used to reduce borrowings
on which the Company had depended heavily to fund
the investment in India. Post the Rights, the Company's
gearing improved and at years' end stood at a healthy
16%, a significant improvement over the previous
periods' 53%
.
Marketing & Sales
It was a busy year in Marketing & Sales. It was the first
time in three decades that Sri Lankans celebrated the
festive periods of December & April without the clouds of
conflict and celebrate they did & rightly so.
Along with the festivities, the elections in January & April
helped increase demand as did tourist arrivals during the
“winter” season. Your Company's distribution system
coped remarkably well with the sudden shift in demand
confirming its agility & flexibility in the face of rapid
change.
The change in operating environment meant that the
Company had to re-position itself to aggressively seek
growth rather than merely consolidating its operations.
A number of very successful initiatives were carried out
during the year targeting our business partners.
The results are clearly evident in the volume growth
achieved by your Company.
During the year under review, the Company launched a
new SKU, the 500 ml can to complement the existing
300 ml pack & this was an instant success. Driven by
consumer convenience, cans now account for a
significant share of the Company's business. An added
benefit of this SKU is that it will help reduce the
dependence on glass bottles and their associated costs
in the years ahead.
The Company continued to consolidate its sales &
distribution system during the year under review. New
distributors were appointed to strengthen operations in
two vital parts of the Country with immediate success.
The Company is currently in the process of further
streamlining its distribution processes & it expects
significant improvements in effectiveness & efficiency in
an already excellent system.
The Company's brand, Strong, received a Gold Medal
at the coveted Monde Selection. This adds to a long list
of awards received by the Company's brands over the
years and re-confirms their world class quality.
Supply Chain
The Company's state of the art brewery in Biyagama
was stretched to the full to meet demand during the
last quarter of the financial year.
During the festive months of December, March & April
– a period in which two elections added to demand –
the brewery operated to full capacity. The logistics
operations during these months were also stretched to
the limit. Yet, the Company did manage to meet
demand for the most part although there were
instances of brand & SKU shortages in the market.
In anticipation of higher volumes in the coming year,
the Company has embarked on an immediate
expansion program, the first stage of which will be
completed in July & the second by October 2010.
During the year under review, the Company set up a
professional procurement division to both consolidate its
excellent raw material inventory management & to seek
significant reductions in costs of inputs. Initial results
have been extremely encouraging.
Support Services
The focus of the Finance division during the year
rested on strengthening the balance sheet. The result
was a successfully concluded Rights Issue which
helped restore a healthy gearing for the Company.
6

OPERATIONS REVIEW
The stronger balance sheet & the improved operating
results provided the Company the opportunity to
negotiate further with its banking partners & hereto
there was success in the form of very competitive
interest rates.
As a result of both the Rights & lower interest rates,
borrowing costs have come down significantly by Rs
151.23 million during the year.
The emphasis of HR during the year under review lay
with building a strong second tier management & restructuring
remuneration to reflect a greater component
of variable pay. Both initiatives have proved successful
and augur well for the future of the Company.
Exports
Since world trade was yet to recover from the global
financial crisis at the start of the financial year under
review, the Company anticipated a significant
slowdown in export volumes. However, this was not
the case; volumes grew by 26 % and by the end of
the financial year, the Company averaged 17
containers a month to overseas markets.
The two focus markets of Maldives & the US performed
well during the year. In the Maldives, the Company
consolidated its position of leadership. The Maldivian
resort sector bounced back with good occupancies
during the latter part of the year and beer volumes,
including Lion & Carlsberg from your Company, grew as
a result. The business in the Maldives is a logistical
nightmare – moving beer in returnable kegs between
Male, the capital & Biyagama & then between Male &
each resort – requires an enabling infrastructure &
operational skills of a high magnitude. Further, each
resort has multiple draught beer supply points & these
need regular servicing which is the responsibility of the
Company. Some resorts require SKU's other than
draught beer & hence, bottles & cans are also supplied
in the Maldives.
Your Company's leadership position in the Maldives is
confirmation that it has mastered the supply chain & thus
has built a competitive advantage that will be difficult to
encroach on.
Volumes grew well in the US as well notwithstanding
the remnants of the financial crisis that still continues to
dampen the operating environment there. The process
of expanding distribution to new states continues as
does the process of consolidation in exiting territories.
As at the end of the financial year, the Company's
brands were available in 23 states of the US. During
the ensuing year the Company hopes to give special
attention to building a strong & sustainable business in
the US.
Similarly, the Company will focus on consolidating it
UK operations into a strong & sustainable business.
The first step in this process is the appointment of a
new distributor who has greater reach across the UK
& a portfolio of products which compliment the
Company's brands.
The Company also exports to a number of other
markets including France, Japan, Canada & the
Seychelles. These are not classified as focus markets &
the investments in them remain small.
On a revenue of Rs 157.34 million, the Company
earned a profit of Rs 15.59 million from its export
business during the year under review.
Indian Operations
The Indian beer industry expanded by an estimated
10% during 2009 bringing the market size to 13
million hectoliters. Although almost 26 times the size
of the Sri Lankan industry, in per capita terms, beer
consumption in India is minute in comparison to first
world norms. Even by Asian standards, beer
consumption in India is extremely small. The alcohol
policy framework in India although complex – a result
of it being a state subject thus lacking in uniformity
across the country – is fundamentally more liberal
than in Sri Lanka. Policy makers are more tolerant
towards consumption of soft alcohols & politically
expedient rules & regulations are rare if any. Thus the
Indian beer market holds promise of a significant
upside to the patient investor.
During 2009, the Company's Indian JV changed its
name to Carlsberg India (Pvt) Ltd (CIPL) thus
communicating its global heritage. Much progress was
made during the year; the brewery in Kolkata was
commissioned adding to the existing brewing footprint
of Himachal Pradesh, Rajasthan & Maharashtra.
Construction of a fifth brewery commenced in Andhra
Pradesh, the largest beer consuming state in India. This
plant is expected to come on stream during the latter half
of 2010. In the meanwhile, the plants in Rajasthan &
Maharashtra are being expanded to meet the ever
increasing demand for this company's brands.
CIPL's brands are now available in most states of India
with few exceptions. Tamil Nadu is one such exception
since it permits only those beers brewed there to be sold
within the state. Volumes at CIPL grew by 192% during
2009, easily out pacing the market and all its principal
competitors including the top two companies, United
Breweries, owner of the Kingfisher brand & South
African Breweries, owner of the Haywards brand.
During the year, CIPL launched Tuborg, a 5% abv beer
which has been extremely well accepted by the young
urban Indian consumer.
R e v i e w o f O p e r a t i o n s
77

R e v i e w o f O p e r a t i o n s
8
OPERATIONS REVIEW
In terms of financial results, CIPL remains in the red and
will continue to do so in the short term. This is expected
since the Company is still very much in an investment
phase. The Indian beer industry is both competitive &
investment intensive & thus a long term perspective is
crucial for success. Those that have the patience &
courage to see through the initial phase of operations in
India are likely to reap significant rewards in the
medium to long term.
India is poised for a period of sustained economic
growth in the years ahead. The election concluded in
2009 has resulted in a stable, single party dominated
administration that has the opportunity to drive
through much needed reforms and all indications are
that the government is ready to do so. Thus there is
every hope that the economy of India will continue to
grow at the impressive rates of the recent past.
The outlook for the Indian beer industry is no different; it
will continue to grow at double digit rates in the
immediate future. Not only will CIPL benefit and take
advantage of such organic growth but it will also
aggressively seek to take share from its competitors in
the market. That Company's brand portfolio, distribution
reach, manufacturing footprint & management
competencies give every confidence it will reach a
strong position in the Indian beer industry in the not too
distant future.
The Year Ahead
Without doubt Sri Lanka is poised for an era of
peace, stability & prosperity. An end to armed
conflict, a stable government, a popular & credible
presidency & administration; it is a window of
opportunity the likes of which this country has not seen
in three decades. The credit for positioning Sri Lanka
at this gateway to opportunity must rest with the
President & his administration. Yet, it is only that; a
gateway to opportunity.
In the short to medium term, the prevailing “feel good”
factor will drive Sri Lanka's economy forward. Tourist
arrivals will continue to grow at a healthy pace,
investment will flood in & so will remittances. The ongoing
infrastructure modernization & expansion
program will continue, possibly at an enhanced pace.
Managing inflation within reasonable levels will pose a
challenge due to both external & internal factors & for
this & other reasons, interest rates will reach & stay at
double digits over the medium term horizon. However,
overall, we foresee a sense of optimism galvanizing the
Country's economy towards a period of high growth in
the short to medium term.
Sustainability of high growth over the longer term
though will depend on the Nations ability to successfully
address core issues. Building an inclusive & equitable
society that respects & abides by the law, win the peace
in the North & East, invest in infrastructure, overcome the
fiscal challenges and reform the public sector and
education & health services are a few such priorities.
The historic gateway to opportunity that is upon the
country now will translate to tangible outcomes only if
these core issues are addressed & resolved in a nation
centric manner. On two counts the country can be
optimistic that such will be the case; firstly, the Nation is
led by a President who has tremendous resolve as was
on display when in the face of immense pressure he
provided leadership in eradicating terrorism and
secondly, he and his administration have earned the
trust of the people and with it the ability to push through
tough but necessary reforms.
Opportunity & credibility are pre-requisites to making
lasting change & these ingredients are available to the
present administration to a degree not available to
others of the past three decades. Similarly expectations
are also high. A stressed out Nation & her people
deserve nothing less.
Your Company welcomes the opportunity to conduct
its business in a stable & peaceful environment. The
prevailing optimism, the opening up of the North &
East, the increase in tourism, the expected growth in
the economy, are all opportunities that will help grow
its operations. It is also expected that a stable country
environment will usher in a less conservative, growth
oriented, policy framework.
As with all opportunity, challenge follows closely
behind. Indeed the greater the opportunity, the greater
the challenge & this applies to your Company as well. It
must prepare itself to meet growth in the market. In such
circumstances to maintain its position of undisputed
market leadership the Company needs to expand
ahead of the growth curve. The first phase of such a
program is now under implementation. By the end of this
year, your Company's production capacity would have
increased by 30%. Expansion plans beyond 2010 are
currently being finalized by management.
Your Company's brand portfolio is geared to meet most
opportunities. Brands have been developed internally in
the event the portfolio needs expansion to meet market
demand. The Company also has access to Carlsberg's
large portfolio of successful world class brands.
Similarly the Company is well prepared to upscale
distribution in the event the need arises.
Most importantly, your Company's management retains
the aggressive intent that has helped secure its
undisputed position of market leadership. In the past,
the strategies adopted by the Company have ensured
strong foundations & market leading performance even
in the face of significant adversity.
Some challenges remain, particularly in relation to the
alcohol policy framework within which the Company
operates. Yet there is every indication that the company
is well poised to take advantage of the new
opportunities presented by the Sri Lankan market during
the coming year.

OPERATIONS REVIEW
Conclusion
From most perspectives it was a momentous year. The
country situation improved beyond recognition & the
fortunes of your Company too took a turn for the
better. The focus now is clearly on growth & seeking
opportunities to expand the market overall & to
consolidate the Company's position within it. The
Company is focused on a few strategies that will help
it do just this. Manufacturing capabilities will be
expanded & judicious investments will be made to
stimulate growth across key channels.
Your Company's business in India will also grow at a
fast pace. Capacity expansion & brand building will
continue to demand shareholder resources but such
investments are a must if the full potential of the Indian
market is to be tapped. The growth potential in India is
truly astonishing & your Company must remain patient
to profit from a market that is still very much in its
infancy.
With its balance sheet now healthy, your Company will
focus on investing some resources to build profitable
businesses in two large export markets, the US & UK.
Short term results are unlikely. However, as the
experience in the Maldives has shown, a focused effort
does pay dividends in the form of a sustainable business
& it is a similar approach that is planned for the US &
UK.
Yes, the year just concluded was a good one on many
counts. However, as long as alcohol policies & taxation
do not place additional burdens on your Company, the
best is yet to come.
9R e v i e w o f O p e r a t i o n s

Profiles of Directors
PROFILE OF DIRECTORS
CUBBY WIJETUNGE
Cubby Wijetunge is the Chairman of Ceylon Brewery
PLC and Lion Brewery (Ceylon) PLC, Union
Residencies Ltd. and Chairman Emeritus, Nestle Lanka
Ltd. He is also a Director of Hunter & Co. Ltd,
Janashakthi Insurance, Swiss Trading Company and
East India Retailing Company (Private) Limited. He
also serves as a Trustee of Joseph Fraser Hospital. In
addition, Mr. Wijetunge is a member of the Monetary
Policy Committee of the Central Bank of Sri Lanka and
President of the Swiss Business Club of Colombo.
HARI SELVANATHAN
Hari Selvanathan is Deputy Chairman of Carson
Cumberbatch PLC and President Commissioner of the
palm oil related companies in Indonesia. He holds
Directorships in several subsidiary companies within
the Carsons Group, including the Chairmanship in
Carsons Management Services (Private) Limited and is
also a Director of Sri Krishna Corporation Ltd,
Carlsberg India Pvt Ltd & South Asian Breweries (Pte)
Ltd -Singapore. He is also the Chairman of Express
Newspapers (Ceylon) Ltd. He was the Past President
of the National Chamber of Commerce and Past Vice
Chairman of the International Chamber of Commerce
(Sri Lanka). He served as Chairman of the Tourism
Steering Committee of the Regaining Sri Lanka
Program from January 2002 to January 2004. He is
also a Director of the India-Sri Lanka Foundation. Mr.
Selvanathan has over 20 years experience in
commodity trading in international markets. He holds
a Bachelor of Commerce Degree.
MANO SELVANATHAN
Mano Selvanathan was conferred the highest
National Honour in Sri Lanka the 'DESHAMANYA'
title by H.E. the President of Sri Lanka, in recognition
of the services rendered to the nation. He is the
Chairman of Sri Krishna Corporation (Private) Limited
and Ceylon Finance & Securities (Private) Limited. He
is a member on the Boards of most companies in the
Carson Cumberbatch Group in Sri Lanka, Indonesia
and Malaysia, and is an active member of its
Executive Management Forums. He is also the Deputy
Chairman of Ceybank Asset Management Company
(Private) Limited. He is a Director of Holcim (Lanka)
PLC, South Asian Breweries (Pte) Ltd, Singapore and
Carlsberg India Pvt Ltd. He is the Chairman of the
Indo-Lanka Chamber of Commerce & Industry and has
also served as the Chairman of the Ceylon Chamber
of Commerce and as the President of the Rotary Club
of Colombo North.
He holds a Bachelors Degree in Commerce and is
also the Hon. Consul of the Republic of Chile in Sri
Lanka.
SURESH SHAH
Suresh Shah is the Director and Chief Executive
Officer of Ceylon Brewery PLC and Lion Brewery
(Ceylon) PLC. He is also a Director of Carson
Cumberbatch PLC and The Sri Lanka Business
Development Centre. Mr. Shah serves as the Deputy
Vice Chairman of the Ceylon Chamber of Commerce
and is the Vice President of the Sri Lanka Institute of
Directors. He also serves on the council of The
Employers Federation of Ceylon and The Industrial
Association of Sri Lanka. Mr. Shah is a Fellow
Member of the Institute of Chartered Accountants of
Sri Lanka.
ROY BAGATTINI
Roy Bagattini is presently the Senior Vice-President,
Asia for Carlsberg A/S and Carlsberg Breweries A/S
serving the Carlsberg Asia region, based in Hong
Kong. Currently, he is part of the Executive Committee
of the Carlsberg Group and also sits on the Board of
several private companies within the Carlsberg
Group.
Mr. Bagattini has a Bachelor of Commerce degree
from the University of South Africa and has also
completed various business studies at Stanford
University USA and Oxford in the UK. Mr. Bagattini
has worked for SABMiller, where he was the Regional
Managing Director for Eastern Europe. He has also
held senior general management positions in South
Africa and the USA, as well as being the Country
Managing Director of SABMiller in India, China and
Italy.
CHANDIMA GUNAWARDENA
Chandima Gunawardena is a Director of Carson
Cumberbatch PLC. He serves as a Director in most of
the Carsons Group companies in Sri Lanka and
overseas. He is a member of the Group's Strategic
Planning Forum. He also serves as a member of the
Audit Committees of the Group in Sri Lanka and
overseas. Mr. Gunawardena has over three decades
of experience in varied fields of business and
commercial activities and has held senior positions in
the corporate sector. He is a Fellow of the Chartered
Institute of Management Accountants, UK.
10

PROFILE OF DIRECTORS
Profiles of Directors
DATO' VOON LOONG CHIN D.S.P.N.
Director of Lion Brewery (Ceylon) PLC., Executive
Director - Corporate Affairs of Carlsberg Brewery
Malaysia Berhad. He is also a Director of Carlsberg
Singapore Pte Ltd. (Singapore), Gorkha Brewery Pvt.
Ltd. (Nepal), South East Asia Brewery Ltd. (Vietnam),
International Beverage Distributors Ltd. (Vietnam),
Carlsberg Distributors Taiwan Limited (Taiwan),
Carlsberg Cottingham Ltd. (Taiwan), Luen Heng F & B
Sdn.Bhd. (Malaysia) and also serves on the Boards of
several private companies within the Group. Dato'
Chin is a Member of the Governing Council of the
Confederation of Malaysian Brewers Berhad. He is a
Fellow Member of the Institute of Chartered
Accountants in England and Wales, and a Member of
the Malaysian Institute of Accountants, Associate
Member of the Malaysian Institute of Taxation,
Affiliate of The Malaysian Institute of Chartered
Secretaries and Administrators (MAICSA) and
Member of the Institute of Public Relations Malaysia.
He holds a Bachelors Degree in Commerce.
CHANDRARATNE LIYANAGE
Director Lion Brewery (Ceylon) PLC. Commenced his
career as a trainee brewer with Ceylon Brewery PLC
in 1979 and was promoted to Senior Brewer and
subsequently to Factory Manager. In 1998 he took up
the position as Factory Manager at Lion Brewery
(Ceylon) PLC and was promoted to his current
position as Head of Technical in 2004. Mr. Liyanage
holds a Special Degree in Botany from the University
of Peradeniya (Sri Lanka) and has attended several
overseas training programs including the Carlsberg
Brew Masters Course, training with Allied Breweries
(UK) & Carlsberg Tetley Leeds Brewery (UK) and
management programs at Cranfield University, UK
and National University, Singapore.
PRASANNA AMERASINGHE
Prasanna Amerasinghe is a Director of Lion Brewery
(Ceylon) PLC and is responsible for the marketing
function of the Brewery Sector. He has over 20 years
of experience in the field of marketing and has held
many senior positions in this area.
RANIL GOONETILLEKE
Director, Lion Brewery Ceylon PLC. Subsequent to
undergoing training at KPMG Ford, Rhodes, Thornton
& Co, he joined the Haycarb Group in 1989 and left
its employment in 1998 as its Divisional Manager
(Finance). He joined Lion Brewery (Ceylon) PLC in
1998 in the capacity of Financial Controller and was
appointed Director Finance in 2004. He is an
Associate Member of the Chartered Institute of
Management Accountants, UK since 1989.
KRISHNA SELVANATHAN
Krishna Selvanathan serves as a Director of the
Carson Cumberbatch Group's management
company, Carsons Management Services (Private)
Limited. He is a Director of Carsons Real Estate
Management Services (Private) Limited. He also acts
as a member of the Carson's Investment Sector
Management Team. He holds a Batchelor of Arts
Degree in Accounting & Finance and Business
Administration from the University of Kent, UK.
11

S e n i o r M a n a g e m e n t
2
3
4
6
7
9
10
11
12
13
14
15
16
1
5
8
1 Shiran Jansz - Head of Procurement
2 Eshantha Salgado - Manager Quality Assurance
3 Nishantha Hulangamuwa - Manager Logistics
4 Nausha Raheem - Head of Human Resources
5 Preethi De Silva - Manager Business Development
6 Ruchira Perera - Financial Controller
7 Sharlene Adams - Head of Exports
8 Janaka Bandara - Manager Production
9 Wasantha Heenatigala - Manager Marketing
10 Hiran Edirisinghe - Chief Engineer
11 Chan Liyanage - Director Technical
12 Ranil Goonetilleke - Director Finance
13 Prasanna Amerasinghe - Director Marketing
14 Janaka Kiridena - Head of Sales Operations
15 Suresh Shah - Director/Chief Executive Officer
16 Arjuna Jayasinghe - Head of Information Technology
12

ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE
AFFAIRS OF THE COMPANY
The Board of Directors of Lion Brewery (Ceylon) PLC (the
Company) is pleased to present its Report and Financial
Statements of the Company for the financial year ended
31st March 2010.
The details set out herein provide the pertinent information
required by the Companies Act No. 07 of 2007, Listing
Rules of the Colombo Stock Exchange and are guided by
recommended best accounting practices.
The Annual Report was approved by the Directors on 7th
May 2010.
PRINCIPAL ACTIVITY OF THE COMPANY
The principal activity of the Company remained brewing,
bottling and sale of high quality beers, under license, for
local and export markets.
REVIEW FOR THE YEAR
The Chairman's Statement and the Review of Operations
describe in detail the performance during the year
together with comments on the financial results and future
developments of the Company.
SIGNIFICANT EVENTS DURING THE YEAR
The details of significant events during the year are
contained in the Review of Operations on pages 4 to 9 of
this Report.
STATEMENT OF DIRECTORS RESPONSIBILITIES
The Statement of Directors Responsibilities for the
Financial Statements is given on page 21 of this report.
FINANCIAL STATEMENTS
The Financial Statements which include Income Statement,
Balance Sheet, Cash Flow Statement, Statement of
Changes in Equity and Notes to the Financial Statements
of the Company for the year ended 31st March 2010
are set out on pages 22 to 46 of this report.
FINANCIAL RESULTS .
For the year-ended 31st March
In Rs.'000s
After appropriations, the total reserves of the
Company stand at Rs.1,440.45 million
(2009 - Rs. 843.55 million) comprising Capital
Reserves of Rs.232.63 million (2009 - Rs.232.48
million) and Revenue Reserves of Rs.1,207.82 million
(2009 - Rs. 611.07 million). Details are shown in the
Statement of Changes in Equity on page 27.
CAPITAL EXPENDITURE
The total expenditure on the purchase of capital assets
by the Company during the year amounted to Rs.
118.24, million (2009 - Rs. 209.61 million). The
movements in capital assets during the year are set
out in Notes 12 and 13 to the Financial Statements.
MARKET VALUE OF FREEHOLD PROPERTIES
The land and buildings owned by the Company were
last valued in March 2006 by a qualified
independent valuer. The market value arrived at was
Rs. 882.20 million. The book value of Rs. 980.50
million shown as at 31st March 2010 (2009 -
993.79) is after accounting for subsequent additions,
disposals and depreciation. These are further
explained in Note 12 to the Financial Statements.
STATUTORY PAYMENTS
The Directors to the best of their knowledge and
belief, are satisfied that all statutory dues have been
paid up to date, or have been provided for in the
Financial Statements except as disclosed in Note 29
to these Financial Statements.
2010
2009
Annual Report of the Board of Directors on the Affairs of the Company
The profit available for appropriation is:
- Current year
- Brought forward
From which the following appropriations have been made:
640,503
611,068
1,251,571
88,813
566,005
654,818
Preference Dividends at (12.5%)
Leaving a balance to be carried forward of
43,750
1,207,821
43,750
611,068
13

Annual Report of the Board of Directors on the Affairs of the Company
ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE
AFFAIRS OF THE COMPANY
GOING CONCERN
The Board of Directors is satisfied that the Company
has adequate resources to continue its operations in
the foreseeable future. Accordingly the Financial
Statements are prepared based on the going
concern concept.
INDEPENDENT AUDITORS' REPORT
The Independent Auditors’ Report on the Financial
Statements is given on page 24 of this Report.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out in Note 3 in the
Notes to the Financial Statements on pages 29 to 34
which have been consistently applied to all periods
presented in these Financial Statements.
INTERESTS REGISTER
DIRECTORS INTEREST’S
The Company maintains an Interest Register
conforming to the provisions of the Companies Act
No. 7 of 2007. The relevant details as required by
the Companies Act No. 07 of 2007 have been
entered in the Interest Register during the year
under review. The Interest Register is available for
inspection as required under the Companies Act.
CORPORATE DONATIONS
No donations have been paid during the year
ended 31st March 2010 (2009 - Nil.)
REMUNERATION OF DIRECTORS
Directors’ remuneration, for the financial year
ended 31st March 2010 is given in Note 6 to the
Financial Statements, on page 35.
DIRECTORS’ SHAREHOLDINGS
DIRECTORS' INTEREST IN CONTRACTS AND
SHARES
Directors’ interests in contracts of the Company are
disclosed in Note 31to these Financial Statements
and have been declared at meetings of the
Directors. The Directors have had no direct or
indirect interest in any other contracts or proposed
contracts in relation to the business of the Company,
while they had the following interests in Ordinary
shares of the Company as shown in the cage below.
The names of the Directors who served during the
year are given under Corporate Information
provided in the back inner cover of the Annual
Report.
Appointments of Directors
Mr. K. Selvanathan was appointed as an Executive
Director of the Company on the 2nd of September
2009.
Mr. R. E. Bagattini was appointed as a Non-
Executive Director of the Company on the 19th of
March 2010.
Mr. G. Brockett was appointed as the Alternate
Director to Mr. R. E. Bagattini on the 19th of March
2010.
No. of Shares
as at 31.03.2010
No. of Shares
as at 01.04.2009
L. C. R. de C. Wijetunge (Chairman)
-
-
H. Selvanathan (Deputy Chairman)
1,579
987
M. Selvanathan (Resigned w.e.f. 02.09.2009)
1,579
987
S. K. Shah (Chief Executive Officer)
6,017
3,761
D. C. R. Gunawardena
34
22
Dato' Voon Loong Chin D. S. P. N.
-
-
C. P. Amerasinghe
1
1
C. T. Liyanage
2,500
2,500
D. R. P. Goonetilleke
-
-
K. Selvanathan (Appointed w.e.f. 02.09.2009)
-
-
R. E.Bagattini (Appointed w.e.f. 19.03.2010)
-
-
14
G. Brockett (Alternate Director to R.E.Bagattini-
Appointed w.e.f. 19.03.2010)
-
-

ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE
AFFAIRS OF THE COMPANY
Resignation of Directors
Mr. M. Selvanathan who was a Director of the
Company resigned from the Board on 2nd September
2009.
Directors to Retire by Rotation
In terms of Articles 88 and 90 of the Articles of
Association of the Company, Mr. S. K. Shah retires by
rotation and being eligible offers himself for reelection.
Retirement at the 1st AGM following
Appointment as Director
In terms of Article 87 and 94 of the Articles of
Association of the Company, Mr. K. Selvanathan
retires from the Board and being eligible offers himself
for re-election.
In terms of Article 87 and 94 of the Articles of
Association of the Company, Mr.R.E.Bagattini retires
from the Board and being eligible offers himself for reelection.
Appointment of Director who is over 70 Years
of Age
Mr. L.C.R. de C. Wijetunge who is over 70 years of
age to be re-appointed as a Director of the Company
for a further period of one year from the conclusion of
the Annual General Meeting and that the age limit
stipulated in Section 210 of the Companies Act No.7 of
2007 shall not be applicable.
BOARD OF DIRECTORS
Directors
L. C. R. de C. Wijetunge (Chairman)
H. Selvanathan (Deputy Chairman)
M. Selvanathan (Resigned w.e.f. 02.09.2009)
S. K. Shah
Dato Voon Loong Chin D.S.P.N.
D. C. R. Gunawardena
C. T. Liyanage
C. P. Amerasinghe
D. R. P. Goonetilleke
AUDITORS
Company’s Auditors during the year under review were
Messrs. KPMG Ford, Rhodes, Thornton & Company,
Chartered Accountants. A sum of Rs. 715,000/- was
paid to them by the Company as audit fees for the year
ended 31st March 2010 (2009 - Rs 640,000/-).
The retiring auditors have expressed their willingness to
continue in office. A Resolution to re-appoint them as
Auditors of the Company and authorising the Directors
to fix their remuneration will be proposed at the Annual
General Meeting.
The Audit Committee reviewed the appointment of the
Auditors, its effectiveness and its relationship with the
group, including the level of audit and non-audit fees
paid to the Auditor.
Auditors’ relationship or any interest with the
Company
The Directors are satisfied that, based on written
representations made by the Independent Auditors to the
Board, the Auditors did not have any interest with the
Company that would impair their independence.
CORPORATE GOVERNANCE
Compliance of corporate governance rules as per the
Listing Rules of the Colombo Stock Exchange (CSE).
The following Directors held office as at the balance sheet date and their brief profiles are given on pages 10 to 11
of the Annual Report.
Executive / Non-Executive / Independent
Non-executive/ Independent*
Executive
Executive
Executive
Non-Executive
Executive
Executive
Executive
Executive
Annual Report of the Board of Directors on the Affairs of the Company
K. Selvanathan (Appointed w.e.f. 02.09.2009)
R. E. Bagattini (Appointed w.e.f. 19.03.2010)
G. Brockett (Alternate Director to R. E. Bagattini-
Appointed w.e.f. 19.03.2010)
Executive
Non-Executive
-
* The Board has determined that Mr. L. C. R. de C. Wijetunge is an independent Non Executive Director in spite of
being on the Board for more than 9 years and being a Director of Ceylon Brewery PLC, which has a substantial
share holding in the Company, since he is not directly involved in the management of the Company.
The Board is working towards meeting the CSE criteria, in respect of Non Executive Independent Directors on the
Board.
15
12

Annual Report of the Board of Directors on the Affairs of the Company
ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE
AFFAIRS OF THE COMPANY
Remuneration Committee
As per Rule 7.10.5 of the Listing Rules of the Colombo Stock Exchange the Remuneration Committee of Ceylon
Brewery PLC (BREW), the parent Company, functions as the Remuneration Committee of the Company with effect
from 1st January 2010 and comprises of the following members.
Remuneration Committee members
Executive/Non-Executive/Independent
H. Selvanathan Executive Director of BREW
M. Selvanathan Executive Director of BREW
The Committee is currently formulating a remuneration policy based on market and industry factors and individual
performance of its Group companies. Aggregated remuneration paid to the Non-Executive Directors of the
Company are disclosed under Note 6 on page 35of this Report.
Executive Directors are not compensated for their role on the Board.
Audit Committee
As per the Rule 7.10.6 of the Listing Rules of the Colombo Stock Exchange the Audit Committee of Carson
Cumberbatch PLC (CCPLC), the ultimate parent company, functions as the Audit Committee of the Company and
comprises the following members.
Audit Committee Members
Executive / Non-Executive
V. P. Malalasekera Non-Executive / Independent director of CCPLC
F. Mohideen Non-Executive / Independent director of CCPLC
D. C. R. Gunawardena Executive director of CCPLC
The report of the Audit Committee is given on pages 19 to 20 of this Report.
DIRECTORS' MEETINGS ATTENDANCE
Five Board Meetings were convened during the financial year and the attendance of the Directors were as follows :
Director Meetings attended (out of 5)
L. C. R. de C. Wijetunge
H. Selvanathan
M. Selvanathan (Resigned w.e.f. 02.09.2009)
S. K. Shah
Dato' Voon Loong Chin, D.S.P.N.
D. C. R. Gunawardena
C. T. Liyanage
C. P. Amerasinghe
D. R. P. Goonetilleke
K. Selvanathan (Appointed w.e.f. 02.09.2009)
R. E. Bagattini (Appointed w.e.f. 19.03.2010)
G. Brockett (Alternate Director to R. E. Bagattini- Appointed w.e.f. 19.03.2010)
5
4
3
5
2
5
5
5
5
2
-
-
DIVIDEND
Subject to the approval of the shareholders at the Annual General Meeting, a final dividend of Rs. 3/- per share is
recommended by the Directors for the year ended 31st March 2010. The dividend payable has not been
accounted for until it is approved at the forthcoming Annual General Meeting.
A 12.5% dividend on the Redeemable Cumulative Preference Shares was paid during the year. The details of the
dividends paid during the year are set out in Note 9 to the Financial Statements.
16

ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE
AFFAIRS OF THE COMPANY
SOLVENCY TEST
Taking into account the said distribution, the Directors are satisfied that the Company would meet the solvency test
requirement under Section 56(2) of the Companies Act No.07 of 2007 immediately after the distribution. The
Company’s Auditors, KPMG Ford Rhodes Thornton & Co. has issued a Certificate of Solvency confirming the same.
Solvency tests have been carried out by the Board of Directors before the payment of preference dividends in
accordance with the Companies Act No. 7 of 2007.
STATED CAPITAL
The Stated Capital of the Company as at 31st March 2010 was Rs.2,537,801,310/- (2009 - Rs.1,337,801,310/-)
consisting of 80,000,000 Ordinary shares and 35,000,000 Redeemable Cumulative Preference shares.
The Company made a Rights Issue of 30,000,000 fully paid Ordinary Shares on the basis of Three (03) fully paid
Ordinary Shares for every Five (05) Ordinary Shares held as at 28th August 2009 at Rs. 40/- each.
The Rights Issue was fully subscribed and Rs.1,200,000,000/- was received from the existing shareholders.
Accordingly the Stated Capital of the Company increased to Rs.2,537,801,310/-.
Annual Report of the Board of Directors on the Affairs of the Company
14
17

Annual Report of the Board of Directors on the Affairs of the Company
ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE
AFFAIRS OF THE COMPANY
SHARE INFORMATION
Information relating to share trading are given on pages 55 and 56 of this Report.
TWENTY MAJOR SHAREHOLDINGS WITH COMPARATIVES
As at 31st March
Ceylon Brewery Plc
Carlsberg Brewery Malaysia Berhad
HSBC Intl Nom Ltd-BBH Genesis Smaller Companies
Ceylon Guardian Investment Trust Plc
The Gilpin Fund Limited
Bukit Darah Plc
Ceylon Investment Plc
Sri Lanka Insurance Corporation Ltd-life Fund
Carson Cumberbatch Plc
Employees Trust Fund Board
Seylan Bank Limited/Priyani Dharshini Ratna Gopal
Associated Electrical Corporation Ltd
Deutsche Bank AG - Comtrust Equity Fund
Mr. C.D. Kohombanwickremage
Portelet Limited
Mr. A. Sithampalam
Waldock Mackenzie Ltd/ Mr.S.N.P.Palihena
And Mrs. A.S.Palihena
Tranz Dominion,L.L.C.
Mr. A.J. Johnpillai
Newgreens Limited
2010
No. of Shares
40,328,788
19,680,000
7,884,556
2,341,672
1,265,199
1,000,000
915,200
560,640
525,921
508,800
290,206
250,000
200,000
181,427
161,920
151,500
150,000
124,951
100,000
83,200
%
50.41
24.60
2009
No. of Shares
25,205,493
12,300,000
4,927,848
1,341,857
789,700
-
572,000
350,400
328,701
-
181,379
-
-
2,000
101,200
-
-
56,000
-
52,000
%
50.41
24.60
Annual report
The Board of Directors approved the Company’s Financial Statements together with the reviews which forms part of
the Annual Report on 7th May 2010. The appropriate number of copies of the Report would be submitted to the
Colombo Stock Exchange, Sri Lanka Accounting and Auditing Standard Monitoring Board and the Registrar of
Companies within the given time frames.
9.86
2.93
1.58
1.25
1.14
0.70
0.66
0.64
0.36
0.31
0.25
0.23
0.20
0.19
0.19
0.16
0.13
0.10
9.86
2.68
1.58
-
1.14
0.70
0.66
-
0.36
-
-
0.00
0.20
-
-
0.11
-
0.10
Annual General Meeting
14th Annual General Meeting of the Company will be held on Friday, the 11th of June 2010 at 2.30 p.m. at the
‘Samudra Hotel’,Sri Lanka Institute of Tourism & Hotel Management, Committee Room ‘ C’, 78, Galle Road,
Colombo 3.
The notice of Annual General Meeting is on page 58 of the Annual Report.
Signed on behalf of the Board,
(Sgd:)
D.C.R.Gunawardena
Director
7th May 2010
(Sgd:)
Suresh K. Shah
Director
18

AUDIT COMMITTEE REPORT
The Audit Committee of Carson Cumberbatch PLC
(CCPLC), the ultimate Parent Company, is the Audit
Committee of the Company, as provided for by the
Colombo Stock Exchange Listing Rules.
The members of the Audit Committee are as
follows :
Audit Committee members
Mr. Vijaya Malalasekera
Mr.Chandima Gunawardena
Mr.Faiz Mohideen
Executive / Non-Executive
Non-Executive, Independent (CCPLC)
Executive (CCPLC)
Non-Executive, Independent (CCPLC)
Mr.Vijaya Malalasekera is a Non-Executive,
Independent Director of Carson Cumberbatch PLC
and a Non-Executive Director of Ceylon Tobacco
Company PLC.
Mr.Chandima Gunawardena is a Director of Carson
Cumberbatch PLC and in most of its’ Group
Companies.
Mr.Faiz Mohideen, a Non-Executive, Independent
Director of Carson Cumberbatch PLC, was the former
Deputy Secretary to the Treasury and a former
Director of Bank of Ceylon and Securities and
Exchange Commission of Sri Lanka.
In addition, Mr.Ralph de Lanerolle is the Expert
Advisor to the Audit Committee for the Beverage
Sector.
The audit aspects of Lion Brewery (Ceylon) PLC are
conducted within the Agenda of Carson
Cumberbatch PLC-Audit Committee and the
Committee is advised by Mr.Ralph de Lanerolle as a
member of the Panel of Expert Advisors to the Audit
Committee of Carson Cumberbatch PLC, for the
Beverage Sector of the Group. Mr.Ralph de
Lanerolle is presently the Managing Director of
Mireka Capital Land (Pvt) Ltd.
Carson Cumberbatch PLC-Audit Committee held 06
Meetings during the financial year to discuss matters
relating to the Company and the attendance of the
Members of the Audit Committee was as follows :
Meetings attended (out of six)
In accordance with the audit plan formulated and
approved by the Audit committee for the financial
year 2009/2010, the Group Internal Audit (GIA)
carried out thirteen audits of processes of Beverage
Sector companies.
The findings and contents of the Group Internal Audit
reports have been discussed with the management
and subsequently the audit reports were circulated to
the Audit Committee and to the management.
The objectives of the GIA work was to have an
independent review of the system of internal controls
as established by the management, its adequacy and
integrity vis-à-vis objectives served and to determine
the extent of adherence to the controls by staff
responsible for the function and to take
corrective/preventive action where necessary.
The interim financial statements of Lion Brewery
(Ceylon) PLC have been reviewed by the Audit
Committee Members at Audit Committee Meetings.
The draft financial statements of Lion Brewery
(Ceylon) PLC for the year ended 31st March 2010
have also been reviewed at a Meeting of the Audit
Committee, together with the External Auditors,
Messrs. KPMG Ford Rhodes Thornton & Company,
prior to release of same to the Regulatory Authorities
and to the shareholders.
The Audit Committee was provided with
confirmations and declarations as required, by the
Managers, Carsons Management Services (Private)
Limited that the said financial statements were
prepared in accordance with the Sri Lanka
Accounting Standards and the information required
by the Companies Act No. 7 of 2007 therein and
presented a true and fair view of the Company’s
state of affairs as at that date and the Company’s
activities during the year under review.
The Audit Committee has determined that
Messrs.KPMG Ford Rhodes Thornton & Company,
Auditors are independent on the basis that they do
not carry out any special assignment on the
operations of the Company.
A u d i t C o m m i t t e e R e p o r t
Mr. Vijaya Malalasekera
Mr.Chandima Gunawardena
Mr.Faiz Mohideen
6
6
6
Mr.Ralph de Lanerolle, the Expert Advisor attended
05 of the above Audit Committee Meetings.
19

A u d i t C o m m i t t e e R e p o r t
AUDIT COMMITTEE REPORT
The Audit Committee has concurred to recommend to
the Board of Directors the re-appointment of Messrs.
KPMG Ford Rhodes Thornton & Company as
Auditors for the financial year ending 31st March
2011, subject to the approval of the shareholders of
Lion Brewery (Ceylon) PLC at the Annual General
Meeting.
The purpose of the Audit Committee of Carson
Cumberbatch PLC, the Audit Committee of Lion
Brewery (Ceylon) PLC is as follows :
To assist the Board of Directors in fulfilling its
oversight responsibilities for the financial reporting
process, the system of internal control over financial
reporting, the audit process and the process for
monitoring compliance with Company policies and
procedures, laws and regulations and the code of
conduct and the identification of and management of
risks that would impact on the Company/Group’s
business objectives.
(Sgd.)
Vijaya Malalasekera
Chairman – Audit Committee
Carson Cumberbatch PLC
th
7 May 2010
20

STATEMENT OF DIRECTOR'S
RESPONSIBILITIES
The responsibilities of the Directors, in relation to the
Financial Statements, are detailed in the following
paragraphs, whilst the responsibilities of the Auditors
are set out in the Report of the Auditors.
According to Companies Act No. 07 of 2007 and the
Sri Lanka Accounting and Auditing Standards Act No.
15 of 1995, the Directors are required to prepare
Financial Statements for each financial year, giving a
true and fair view of the state of affairs of the Company
as at the end of the financial year and of the results for
the said period.
In preparing these Financial Statements the Directors
are required to ensure that:
- appropriate accounting policies have been selected
and applied consistently, while material departures, if
any, have been disclosed and explained.
- all applicable Accounting Standards have been
complied with and,
- reasonable and prudent judgments and estimates
have been made.
The Directors are responsible for ensuring that the
Company maintains sufficient accounting records to
disclose with reasonable accuracy, the financial
position of the Company in order to ensure that the
Financial Statements of the Company meet with the
requirements of Companies Act No. 07 of 2007 and
the Sri Lanka Accounting and Auditing Standards Act
No. 15 of 1995. They are also responsible for taking
reasonable measures to safeguard the assets of the
Company and in this regard to give proper
consideration to the establishment of appropriate
systems of internal control with a view to prevent,
detect and rectify frauds and other irregularities.
These Financial Statements have been prepared on a
going concern basis, since the Directors are of the view
that the Company has adequate resources to continue
operations for the foreseeable future from the date of
signing these Financial Statements.
The Directors are also of the view that they have
discharged their responsibilities as set out in this
statement.
By Order of the Board,
(Sgd.)
D.C.R.Gunawardena
Director
Carsons Management Services (Private) Limited
th
7 May 2010
S t a t e m e n t o f D i r e c t o r ' s R e s p o n s i b i l i t i e s
21

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS
Financial Highlights
2010
Rs.'000
2009
Rs.'000
% Change
Fi F i n a n c i i a l l S t t a t e m e n t s
Revenue
7,919,292
6,094,726
29.94
Profit from operations
872,800
473,228
84.44
Profit after taxation
640,503
88,813
621.18
Preference dividend
43,750
43,750
-
Shareholders' funds
3,628,250
1,831,348
98.12
Total assets
6,123,047
5,542,629
10.47
Earnings per ordinary share (Rs.)
7.46
0.90
728.89
Net assets per ordinary share (Rs.)
45.35
36.63
23.82
Market capitalisation
6,920,000
2,750,000
151.64
Financial Calender
st
Financial year - 31 March 2010
Announcement of results
First quarter -
th
14 August 2009
th
Second quarter - 13 November 2009
Third quarter -
th
12 February 2010
th
th
14 Annual General Meeting 11 June 2010
20
23

Fi n a n c i a l S t a t e m e n t s
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF LION BREWERY (CEYLON) PLC
Report on the Financial Statements
We have audited the accompanying financial statements of Lion Brewery (Ceylon) PLC (the “Company”), which
st
comprise the balance sheet as at 31 March 2010 and the income statement, statement of changes in equity and
cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory
notes.
Management's Responsibility for the Financial Statements
KPMG Ford, Rhodes, Thornton & Co.
(Chartered Accountants)
32 A, Sir Mohamed Macan Markar Mawatha
P.O. Box 186
COLOMBO 3
Sri Lanka.
Telephone + 94 - 11 242 6426
Facsimile + 94 - 11 244 5872
+ 94 - 11 244 6058
+ 94 - 11 254 1249
+ 94 - 11 230 7345
Internet : www.lk.kpmg.com
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with Sri Lanka Accounting Standards. This responsibility includes: designing, implementing and maintaining internal
control relevant to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Scope of Audit and Basis of Opinion
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with Sri Lanka Auditing Standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit. We therefore believe that our audit provides a reasonable basis for our
opinion.
Opinion
In our opinion, so far as appears from our examination, the Company maintained proper accounting records for the
st
year ended 31 March 2010 and the financial statements give a true and fair view of the Company's state of affairs
st
as at 31 March 2010 and its profit and cash flows for the year then ended in accordance with Sri Lanka Accounting
Standards.
Report on Other Legal and Regulatory Requirements
T h e s e f i n a n c i a l s t a t e m e n t s a l s o c o m p l y w i t h t h e r e q u i r e m e n t s o f S e c t i o n 1 5 1 ( 2 )
of the Companies Act No. 07 of 2007.
(Sgd.)
KPMG Ford, Rhodes, Thornton & Company
CHARTERED ACCOUNTANTS
Colombo
th
07 May 2010
24

INCOME STATEMENT
For the year ended 31st March
In Rs.'000s
Revenue
Cost of sales
Gross profit
Other income
Distribution expenses
Administrative expenses
Other expenses
Profit from operations
Finance expenses
Profit before taxation
Income tax release
Profit for the year
Note
4
5
6
7
8
2010
7,919,292
(5,324,940)
2,594,352
2,624
2,596,976
(1,176,423)
(351,038)
(196,715)
872,800
(240,105)
632,695
7,808
640,503
2009
6,094,726
(4,145,532)
1,949,194
1,625
1,950,819
(1,097,204)
(285,526)
(94,861)
473,228
(391,339)
81,889
6,924
88,813
Fi F i n a n c i i a l l S t t a t e m e n t s
Earnings per ordinary share (Rs.)
- as originally reported
10
7.46
0.90
- as restated for rights issue
8.69
0.78
The Notes to the Financial Statements from page 29 to 46 form an integral part of these Financial Statements.
Figures in brackets indicate deductions.
25

Fi F i n a n c i i a l l S t t a t e m e n t s
BALANCE SHEET
As at 31st March
In Rs.'000s
ASSETS
Non-Current Assets
Property, plant & equipment
Intangible assets
Long-term investments
Total Non-Current Assets
Current Assets
Inventories
Trade and other receivables
Amounts due from related companies
Cash and cash equivalents
Total Current Assets
Total Assets
EQUITY AND LIABILITIES
Equity
Stated capital
Capital reserves
Note
12
13
14
15
16
17
18
19
2010
2,391,921
24,448
1,447,415
3,863,784
860,710
1,213,328
33,680
151,545
2,259,263
6,123,047
2,537,801
232,628
2009
2,398,093
38,007
1,091,677
3,527,777
915,118
1,014,226
16,192
69,316
2,014,852
5,542,629
1,337,801
232,479
Retained earnings
1,207,821
611,068
Total Equity
3,978,250
2,181,348
Non-Current Liabilities
Payables due after one year
20
650,102
626,824
Retirement benefit obligations
21
34,715
28,829
Deferred taxation
22
398,475
410,104
Total Non-Current Liabilities
1,083,292
1,065,757
Current Liabilities
Trade and other payables
23
210,414
166,134
Amounts due to related companies
24
33,183
92,731
Current taxation
25
475,547
329,618
Long-term loans repayable within one year
20.1
10,687
37,447
Short-term loan
-
400,000
Bank overdrafts (Unsecured)
331,674
1,269,594
Total Current Liabilities
1,061,505
2,295,524
Total Liabilities
2,144,797
3,361,281
Total Equity and Liabilities
6,123,047
5,542,629
Net assets per ordinary share (Rs.)
The Notes to the Financial Statements from page 29 to 46 form an integral part of these Financial Statements.
I certify that the above Financial Statements comply with the requirements of Companies Act No.07 of 2007.
(Sgd.)
D.R.P. Goonetilleke
Director - Finance
The Board of Directors is responsible for the preparation and presentation of these Financial Statements.
Approved and signed on behalf of the Managers
and signed on behalf of the Board
45.35 36.63
(Sgd.) (Sgd.) (Sgd.)
D.C.R.Gunawardena S.K. Shah C.P.Amerasinghe
Director Director Director
Carsons Management Services ( Private) Limited
Secretaries
th
7 May 2010
26

STATEMENT OF CHANGES IN EQUITY
In Rs.'000s
Balance as at 1st April 2008
Adjustment for deferred tax liability
Profit for the year
Preference dividend
Balance as at 31st March 2009
Right Issue
Adjustment for deferred tax liability
Profit for the year
Preference dividend
Balance as at 31st March 2010
Note
22.1
9
18.(b)
22.1
9
Stated
Capital
1,337,801
-
1,337,801
1,200,000
2,537,801
-
-
-
-
-
Capital
Redemption
Reserve
70,000
-
-
-
70,000
-
-
-
70,000
Revaluation
Reserve
162,330
149
162,479
-
-
149
162,628
-
-
Retained
Earnings
566,005
-
88,813
(43,750)
611,068
-
640,503
(43,750)
1,207,821
The Notes to the Financial Statements from page 29 to 46 form an integral part of these Financial Statements.
Figures in brackets indicate deductions.
Total
Equity
2,136,136
149
88,813
(43,750)
2,181,348
1,200,000
149
640,503
(43,750)
3,978,250
Fi F i n a n c i i a l l S t t a t e m e n t s
27

Fi F n i n a a n n c c i i a a l l S S t t a t t e m e n t s
CASH FLOW STATEMENT
For the year ended 31st March
In Rs.'000s
Cash Flows from Operating Activities
Profit before Taxation
Adjustments for:
Finance expenses
Depreciation on property, plant & equipment
Amortisation of intangible assets
Property, plant & equipments write back
Intangible assets write off
Interest cost capitalised
Adjustments made for Property plant & equipment
Provision for gratuity
Profit on disposal of property, plant & equipment
Interest income
Operating cash flow before working capital changes
(Increase) in inventories
Decrease / (Increase) in trade and other receivables
Increase in amounts due from related companies
Increase in trade and other payables
Increase / ( Decrease) in amounts due to related companies
Cash generated from operations
Finance expenses paid
Gratuity paid
Income tax paid
2010
632,695
240,105
125,357
2009
81,889
391,339
128,747
Inventory Provisions and write offs 15
56,435 31,180
Note
7
12
13
12
13
12
12
21
5
5
7
21
13,559
-
-
(5,587)
4,524
7,063
(926)
(1,606)
1,071,619
(2,027)
(184,871)
(17,488)
190,127
(59,548)
997,812
(240,105)
(1,177)
-
3,626
(1,599)
2,959
(15,264)
-
10,992
(919)
(533)
632,417
(338,523)
37,020
(15,801)
25,869
71,212
412,194
(391,339)
(1,668)
(2)
Economic service charge paid
(17,676)
(11,402)
Net cash generated from operating activities
738,854
7,783
Cash Flows from Investing Activities
Purchase of property , plant & equipment and intangible assets
12 & 13
(118,240)
(209,612)
Proceeds from sale of property,plant & equipment
1,044
1,020
Customer deposits received
20.3
59,931
168,185
Customer deposits refunded
Long term investment
20.3
14
(25,966)
(355,738)
(11,048)
(346,834)
Interest received
5
1,606
533
Net cash used in investing activities
(437,363)
(397,756)
Cash Flows from Financing Activities
Proceeds from right issue
18.b
1,200,000
-
Long term loan received
20.1
-
50,000
Repayments of long term borrowings
Dividend paid
20.1
(37,447)
(43,895)
(86,645)
(43,750)
Net cash generated from/ (used in) financing activities
1,118,658
(80,395)
Net increase/(decrease) in cash & cash equivalents
1,420,149
(470,368)
Cash & cash equivalents at the beginning of the year
(1,600,278)
(1,129,910)
Cash & cash equivalents at the end of the year
(180,129)
(1,600,278)
Analysis of cash & cash equivalents
Cash & cash equivalents
Short term loan
Bank overdraft
151,545
-
(331,674)
(180,129)
69,316
(400,000)
(1,269,594)
(1,600,278)
28
The Notes to the Financial Statements from page 29 to 46 form an integral part of these Financial Statements.
Figures in brackets indicate deductions

NOTES TO THE FINANCIAL STATEMENTS
1. Reporting Entity
Lion Brewery (Ceylon) PLC is a public limited liability
company incorporated and domiciled in Sri Lanka and
listed on the Colombo Stock Exchange.
The ultimate parent company is Carson Cumberbatch
PLC.
The registered office of the Company is situated at
No. 61, Janadhipathi Mawatha Colombo 1 and the
principal place business is situated at No. 254, Colombo
Road, Biyagama.
The principal activities of the Company are brewing
and bottling of high quality beers, under license, for
local and export markets and remained unchanged
during the year.
There were no significant changes in the nature of the
principal activities of the Company during the
financial year under review.
2 Basis of Preparation
2.1 Statement of Compliance
The Financial Statements of Lion Brewery
(Ceylon) PLC comprise the Balance Sheet,
Income Statement, Statement of Changes in
Equity, Cash Flow Statement and Notes to the
Financial Statements. These statements are
prepared in accordance with the Accounting
Standards laid down by the Institute of Chartered
Accountants of Sri Lanka and comply with the
requirements of Companies Act No 7 of
2007.
The Financial Statements are presented in
accordance with the SLAS 3 (Revised 2005) -
"Presentation of Financial Statements", to ensure
comparability both with the entity's financial
statements of previous periods and with the
Financial Statements of other entities.
The Financial Statements were authorised for issue
by the Directors on 7th May 2010.
2.2 Basis of Measurement
The Financial Statements have been prepared on
the historical cost basis and applied consistently
with no adjustments being made for inflationary
factors affecting the Financial Statements, except
for the following;
- Defined Benefit Asset is recognized as the net total
of the plan assets, plus unrecognized past service cost
and unrecognized actuarial losses, less unrecognized
actuarial gains and the present value of the defined
benefit obligation.
2.3 Functional Currency and Presentation
Currency
All values presented in the Financial Statements
are in Sri Lankan Rupees Thousands ( Rs.'000s)
which is the Company's functional currency,
unless otherwise indicated.
2.4 Comparative Information
The comparative information are reclassified
wherever necessary with current year's
presentation in order to provide a better
presentation.
2.5 Use of Estimates and Judgements
The preparation of Financial Statements requires
management to make judgements, estimates and
assumptions that affect the application of accounting
policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may
differ from these estimates.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
Information about significant areas of estimation and
uncertainty that have the most significant effect on the
amounts recognised in the Financial Statements are
described below.
2.5.1 Assessment of Impairment
The Company assesses at each Balance Sheet date
whether there is objective evidence that an asset or
portfolio of assets is impaired. The recoverable
amount of an asset or cash generating unit is the
greater of its value in use and its fair value less cost
to sell.
In assessing value in use, the estimated future cash
flows are discounted to present value using
appropriate discount rates that reflects the current
market assessments of the time value of money and
risks specific to the asset.
F i n a n Fi c n i a n l c i S a tl a S t t e a m t e m n e t n s t s
- Freehold Land and buildings are measured at
cost at the time of acquisition and subsequently at
revalued amounts, which are the fair values at the
date of revaluation less accumulated depreciation
and impairment losses, if any.
29

Fi n a n c i a l S t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
2.5.2 Employee Retirement Benefits
The liability as at Balance Sheet date was actuarially
valued based on the assumptions set out in Note
No 21.1.
3. Significant Accounting Policies
The accounting policies set out below have been
applied by the Company consistent with the previous
year.
3.1 Foreign Currency Transactions
All foreign currency transactions are converted
at the rate of exchange prevailing at the time the
transactions were effected. Monetary assets and
liabilities denominated in foreign currencies have
been translated to Sri Lankan rupees at rates of
exchange prevailing at the Balance Sheet date.
The exchange differences arising there from
have been dealt within the Income Statement.
ASSETS AND BASES OF THEIR
VALUATION
Assets classified as Current Assets in the Balance
Sheet are cash and those which are expected
to be realised in cash during the normal operating
cycle of the Company's business or within one year
from the Balance Sheet date whichever is shorter.
Assets other than Current Assets are those which the
Company intends to hold beyond a period of one year
from the Balance Sheet date.
3.2 Property, Plant & Equipment
(a) Recognition and Measurement
Items of property, plant & equipment are
measured at cost or valuation less accumulated
depreciation and accumulated impairment loss , if
any, provided on the basis stated in
Note No 12. Cost of property, plant & equipment is
the cost of acquisition or construction together
with any expenses incurred in bringing the asset to its
working condition for its intended use.
The Company applies the revaluation model for
freehold land and buildings while the cost model is
applied for other catogories of Property, Plant and
Equipment.
Expenditure incurred for the purpose of acquiring,
extending or improving assets of a permanent nature
by means of which to carry on the business or to
increase the earning capacity of the business has
been treated as capital expenditure.
30

NOTES TO THE FINANCIAL STATEMENTS
(b) Revaluation of Land and Buildings
The freehold land and buildings of the Company have
been revalued and revaluation of these assets are
carried out at least once every five years in order to
ensure that the book values reflect the realisable values.
Any surplus or deficit arising there from is adjusted in
the revaluation reserve.
(c) Subsequent Expenditure
Expenditure incurred to replace a component of
an item of property, plant and equipment that is
accounted for separately is capitalised. Other
subsequent expenditure is capitalised only if it is
probable that the future economic benefits
embodied with the item will flow to the Company
and the cost of the item can be measured
reliable. All other expenditure is recognised
in the income statement as an expense as incurred.
(d) Depreciation
Depreciation is provided on a straight-line basis over
the periods appropriate to the estimated
useful lives of different types of assets, at
varying rates specified on their costs or revalued
amounts are as follows:
%
Freehold buildings 2
Plant & machinery 5 - 10
Furniture & fittings 10
Office equipment 10 - 33.33
Computer equipment 33.33
Computer equipment-software 20
Motor vehicles 20 - 25
Laboratory equipment 25
Assets are depreciated from the month of
purchase up to the month of disposal.
No depreciation is provided on freehold land.
(e) Capital Work - in- Progress
The cost of self constructed assets includes the cost of
materials and direct labour, any other costs directly
attributable to bringing the assets to a workable
condition of their intended use and capitalised
borrowing cost ( see below) . Capital Work-In-Progress
is transferred to the respective asset accounts when the
asset is available for use.
The Company capitalises borrowing costs directly
attributable to the acquisition, construction or
production of a qualifying asset as part of the cost of
that asset. The Company has capitalised borrowing
costs with respect to capital work in progress.
(f) Impairment of Property, Plant and
Equipment
The carrying value of property, plant and
equipment is reviewed for impairment when
events or changes in circumstances indicate the
carrying value may not be recoverable. If any
such indication exists and where the carrying
value exceed the estimated recoverable amount
the assets are written down to their recoverable
amount. Impairment losses are recognised in the
Income Statement unless it reverses a previous
revaluation surplus for the same asset.
3.3 Intangible Assets - Computer Application
Software
All software licensed for use by the Company, not
constituting an integral part of related hardware
are included in the Balance Sheet under the
category of Intangible Assets and carried at cost
less accumulated amortisation and accumulated
impairment losses, if any.
The initial acquisition cost comprises license
fee paid at the inception, import duties, nonrefundable
taxes and levies, cost of customising
the software to meet the specific requirements
of the Company and other directly attributable
expenditure in preparing the asset for its
intended use.
The initial cost is enhanced by subsequent
expenditure incurred by further customisation
to meet ancillary transaction processing and
reporting requirements tailor-made for the use of the
Company constituting an improvement to the
software.
The cost is amortised using the straightline
method, at the rate of 20% per annum
commencing from the date the application
software is available for use. The amortised
amount is based on the best estimate of its
useful life and the amortisation cost is recognised
as an expense in the Income Statement.
3.4 Inventories
Inventories are recognised at cost or net
realisable value whichever is lower after making
due allowance for obsolete and slow moving items.
Actual breakages of bottles are removed from
inventory and recognised as an expense in the
income statement.
The cost of each category of inventory is derived on
the following bases:
Fi n a n c i a l S t a t e m e n t s
31

Fi n a n c i a l S t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
Raw materials and containers (empty bottles
and crates) - cost of purchase together with
any incidental expenses.
Work-in-progress - raw material cost and a
proportion of manufacturing expenses.
Finished goods - raw material cost and
manufacturing expenses in full.
Maintenance stock - on a weighted average basis.
Appropriate provisions will be made for the value of
any stocks where there has been no movement for a
period greater than 365 days.
Net realisable value is the price at which inventories
can be sold in the normal course of
business after allowing for cost of realisation and
/ or cost of conversion from their existing state to
saleable condition.
3.5 Long Term Investments
Investments classified as long term are carried at cost.
If there is a decline other than temporary,
in the value of long term investment, the carrying
amount is reduced to recognise the decline.
3.6 Trade and Other Receivables
Trade and other receivables are stated at the
amounts estimated to be realised less provision
for bad and doubtful debts. A provision Is
recognised against the trade receivables when
there is an evidence that the Company will not be
able to collect all amounts due. The provision is
measured at the difference between the relevant
trade receivable's carrying amount and the estimated
realisable value and recognised in the Income
Statement under Distribution Expenses.
3.7 Cash & Cash Equivalents
Cash and cash equivalents comprise cash in
hand, bank demand deposits and short term
highly liquid investments readily convertible
to known amounts of cash and subject
to insignificant risk of changes in value.
LIABILITIES AND PROVISIONS
Liabilities classified as Current Liabilities in the
Balance Sheet are those obligations payable
on demand or within one year from the Balance
Sheet date. Items classified as Non - Current
Liabilities are those obligations which will be
repaid after a period of one year from the
Balance Sheet date.
All known liabilities have been accounted for in
preparing these Financial Statements.
3.9 Agent Deposits
Containers issued to agents are secured
against a refundable deposit representing the
cost. Refunding of deposits could arise due
to a discontinuance of an agency or due to a
contraction in sales.
3.10 Retirement Benefits
The Company is liable to pay gratuity in terms
of the Payment of Gratuity Act No. 12 of 1983.
The Gratuity Provision for employees has been
made on the basis of an actuarial valuation as
at 31st March 2010, which was carried out by
Mr M Poopalanathan, (AIA), Actuarial
and Management Consultants (Pvt.) Limited.
As recommended by the Sri Lanka Accounting
Standard No 16 " (Revised 2010) Employee
Benefits" , the 'Projected Unit Credit' (PUC)
method has been used in this valuation and the
premium for the year is charged as an expense
to the Income Statement in the period to which it
relates. The principal assumptions made are given
below:
- The Company will continue in business as a
going concern.
- The liability is not externally funded.
Defined Contribution Plans
Employees' Provident Fund and Employees'
Trust Fund
All employees who are eligible for Employees'
Provident Fund contributions and Employees' Trust
Fund contributions are covered by relevant
contribution funds in line with the respective statutes.
3.8 Impairment of Assets
Identifiable assets of the Company are reviewed
at each balance sheet date to determine
whether there is any indication of impairment.
If any such indication exists, the recoverable
amount of the asset is estimated and shown
in the Balance Sheet. The impairment loss is
recognised in the Income Statement.
Company contributions to the defined contribution
plans are recognised as an expense in the Income
Statement when incurred.
3.11 Provisions
A provision is recognised if the Company has a
legal or constructive obligation as a result of a
past event which can be estimated reliably and it
is probable that an outflow of economic benefits
will be required to settle the obligation.
32

NOTES TO THE FINANCIAL STATEMENTS
3.12 Capital Commitments and Contingent
Liabilities
All material capital commitments and
contingencies which exist as at the Balance
Sheet date are disclosed in the respective Notes
to these Financial Statements.
3.13 Trade and Other Payables
Trade and other payables are stated at their cost.
Income Statement
3.14 Revenue
The Revenue represents the amounts derived
from customers outside the Company, on the
provision of goods and services which fall within
the ordinary activities, net of trade discounts.
Value Added Tax is excluded in arriving at the
turnover.
3.15 Revenue Recognition
Revenue is principally accrued and matched with the
related expenditure and is recognised in accordance
with the Sri Lanka Accounting
Standard 29, "Revenue".
3.15.1 Sale of Goods
Revenue from sale is recognised upon delivery /
collection of products and customer acceptance,
if any, whereby significant risks and rewards
of ownership are passed on to the buyer, or
performance of services, net of sales taxes and
discounts.
(b) Finance Expenses
Interest expenses are recognised on an accrual
basis.
(c ) Borrowing Costs
All borrowing costs are recognised as an
expense in the period in which they are incurred,
except those that are directly attributable to the
acquisition/ construction of property, plant &
equipment which are capitalised as a part of the
cost of the asset during the period of construction
/ development.
3.17 Income tax expenses
Income tax expense comprises current and deferred
taxation.
(a) Income tax expenses
The Company's liability to taxation has been
computed in accordance with the provisions
of the Inland Revenue Act No. 10 of 2006 and
amendments made thereto, as stated in the
respective notes to these Financial Statements.
However, in terms of the Agreement entered into
with the Board of Investment of Sri Lanka, the
operating profits of the Company is exempt from
income tax for a period of twelve years commencing
1st of June 1998.
Fi n a n c i a l S t a t e m e n t s
3.15.2 Other Income
(a) Interest Income
Interest income is recognised on an accrual
basis.
(b) Gains or Losses on Disposal of
Property, Plant & Equipment
Net gains and losses of a revenue nature resulting
from the disposal of property, plant &
equipment have been accounted as other income
in the Income Statement. Where the gain is on
immovable property, such gain is appropriated to
the capital accretion reserve.
3.16 Expenditure Recognition
(a) Operating Expenses
All expenses incurred in day-to-day operations
of the business and in maintaining the property,
plant & equipment in a state of efficiency has
been charged to revenue in arriving at the profit
or loss for the year. Provision has also been
made for bad and doubtful debts, all known
liabilities and depreciation on property, plant &
equipment.
(b) Deferred Taxation
Deferred taxation is provided on the balance
sheet liability method for all temporary
differences as at the balance sheet date
between the tax bases of assets and liabilities
and their carrying amounts for financial reporting
purposes. The balance in the deferred taxation
account represents income tax applicable to
the difference between the written down values
for tax purposes of the assets on which tax
depreciation has been claimed and the net book
values of such assets, offset by the provision
for retirement benefit which is deductible for tax
purposes only on payment.
Deferred tax assets, including those related to
temporary tax effects of income tax losses
and credits available to be carried forward are
recognised only to the extent that it is probable
that future taxable profits will be available against
which the asset can be utilised. Deferred tax
assets are reviewed at each reporting date and
are reduced to the extent that it is no longer
probable that the related tax benefit will be
realised.
33

Fi n a n c i a l S t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
3. 18. Dividend Distribution
Dividend distribution is recognised as a liability in the
period in which the dividends are approved by
the Company's Shareholders.
3.19. Related Party Transactions
Disclosures are made in respect of the
transactions in which one party has the ability to
control or exercise significant influence over the
financial and operating decisions/polices of the
other, irrespective of whether a price is being
charged or not.
3.20. Segment Reporting
A segment is a distinguishable component of
an enterprise that is engaged in either providing
products or services (Business Segment) or in
providing products or services within a particular
economic environment (Geographical Segment)
which is subject to risk and rewards that are
different from those of the other segment.
Sri Lanka Accounting Standard 45 - Financial
Instruments:
Recognition and Measurement provides the principles
for recognizing and measuring financial assets and
financial liabilities, including derivative
financial instruments. Previously certain instruments, in
particular derivatives, were held by enterprises
without being reflected in the Balance Sheet.
The Company is currently in the process of evaluating
the potential effect of these Standards on its Financial
Statements. However, the impact of the above
requirements has not been quantified as at Balance
Sheet date.
3.21 New Accounting standards issued but
not effective as at balance sheet date
The Institute of Chartered Accounts of Sri Lanka has
issued the two new standards given below, which
become effective for annual periods beginning on or
after 1st January 2011.
Accordingly these standards have not been applied in
preparing these Financial Statement as they are not
effective for the year ended 31st March 2010.
?Sri Lanka Accounting Standard 44 - Financial
Instruments: Presentation (SLAS 44)
?Sri Lanka Accounting Standard 45 - Financial
Instruments: Recognition and Measurement (SLAS 45)
These Standards require application of fair value
measurement techniques for financial instruments.
Sri Lanka Accounting Standard 44 - Financial
Instruments:
Presentation provides guidance regarding the
classification of Financial Instrument as equity or debt,
and for the accounting for compound instruments with
characteristics of both equity and debt instruments
based on the substance of the contractual
arrangements.
34

NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March
In Rs.'000s
4 REVENUE
Local revenue
Export revenue
5 OTHER INCOME
Interest income - FCBU deposits
Interest income - Other
Profit on disposal of property, plant & equipment
Other income
6 PROFIT FROM OPERATIONS
Operating profit is stated after charging all expenses including the following :
2010 2009
7,761,951
157,341
7,919,292
160
1,446
926
92
2,624
5,948,873
145,853
6,094,726
96
437
919
173
1,625
Fi F n i n a a n n c c i i a l l S t t a t e m e n t s
Directors' fees and emoluments
Auditors' remuneration - Audit services
- Other audit services
Internal audit fee
Audit Committee fees
Depreciation on property, plant & equipment (Note 12)
Amortisation of intangible assets (Note 13)
Royalty
Management & Secretarial fees
Breakages - bottles and crates
Research & development
19,669
715
-
4,972
200
125,357
13,559
179,393
108,770
106,123
6,357
16,318
640
40
6,674
200
128,747
3,626
153,186
88,666
105,413
5,651
Personnel expenses - (Note 6.1)
373,024
273,447
6.1 Personnel expenses
Salaries, wages and other related expenses
Defined benefit plan costs - Gratuity (Note 21)
Defined contribution plan cost - EPF & ETF
347,648
7,063
18,313
373,024
246,016
10,992
16,439
273,447
7 FINANCE EXPENSES
Interest expenses - financial institutions
Interest expenses - related companies
230,886
9,219
240,105
374,939
16,400
391,339
35

Fi F n i n a a n n c c i i a l l S t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March
In Rs.'000s
8 INCOME TAX RELEASE
Income tax expense / (release) on other income (Note 8.1)
Economic service charge
Net deferred tax income - (Note 22.1 & Note 22.2)
Total income tax
8.1 Reconciliation of the accounting profit and tax expenses.
Accounting profits before taxation
Aggregate of disallowable expenses
Aggregate of allowable claims
Tax adjusted profit
Less- Exempt operational profit
Exempt interest income
Assessable income
Utilisation of tax loss (Note 8.2.3)
Taxable income
2010
1,038
2,634
(11,480)
(7,808)
632,695
421,944
(122,453)
932,186
(930,572)
(160)
1,454
(509)
945
2009
(902)
-
(6,022)
(6,924)
81,889
182,964
(121,250)
143,603
(143,021)
(96)
486
(170)
316
Current tax (Note 8.2.2)
(Over) / under provision in respect of prior years
Social responsibility levy
Total income tax expense / (release)
331
702
5
1,038
110
(1,014)
2
(902)
8.2 Income Tax
8.2.1 The operating profit and income of the Company is exempt from income tax for a period of twelve years,
commencing from 1st of June 1998, in terms of the agreement with the Board of Investment
th
of Sri Lanka under Section 17 of the BOI Law No 4 of 1978.
8.2.2 However, in terms of the Inland Revenue Act No. 10 of 2006 and amendments thereto, the profits &
income from other sources are liable to income tax at the rate of 35% (2009 - 35%). 1.5% of income tax is
payable as a social responsibility levy (2009 - 1.5%).
No tax liability arises on interest earned on FCBU deposits as such is exempt from income tax.
8.2.3 The Company has a tax loss of Rs.8,825,328/- as at 31 st March 2010 (2009 - Rs.9,334,494/-).
Utilisation of the same is restricted to 35% of the statutory income during the year. Any part of loss that cannot be
deducted, can be carried forward indefinitely.
8.2.4 The Company is liable to pay Economic Service Charge at 0.25% of operational turnover and payments
made for the year amounts to Rs.19,509,099/- ( 2009 - 11,402,111/-). Payment made hereunder is available
as income tax credit for a period of 5 years.
36
5

NOTES TO THE FINANCIAL STATEMENTS
9 DIVIDEND
For the year ended 31st March
In Rs.'000s
On preference shares - 12.5% (2009 - 12.5%)
2010
43,750
43,750
2009
43,750
43,750
(a) A preference dividend of 12.5% per annum on redeemable cumulative preference shares was paid on 30th
June 2009, 30th September 2009, 31st December 2009 and 31st March 2010.
(b) The board of Directors has recommended the payment of a first and final dividend of Rs.3/- per share for
the year ended 31st March 2010 ( 2009 - Nil) which is to be approved at the Annual General Meeting to be
held on 11th of June 2010. In Accordance with Sri Lanka Accounting Standards No12 - Events after the Balance
Sheet Date (Revised 2006), this proposed dividend has not been recognise as a liability as at 31st March 2010.
Currently, dividends declared by the Company out of exempt profits during the period of the tax holiday and
one year thereafter, are exempt from income tax.
10 EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share of Rs.7.46 (2009 - Rs.0.90) is based on profit for the year
attributable to the ordinary shareholders divided by the weighted average number of ordinary shares
outstanding during the year and without the effects of Rights issue.
Fi F n i n a a n n c c i i a l l S t t a t e m e n t s
The following reflects the income and share data used for the computation of Earnings Per Ordinary Share:
Profit after taxation
Less : Dividends on redeemable cumulative preference shares
Profit attributable to ordinary shareholders (as the Numerator)
Number of ordinary shares used (as the Denominator)
Earnings per ordinary share (Rs.)
640,503
(43,750)
596,753
80,000
7.46
88,813
(43,750)
45,063
50,000
0.90
11 FOREIGN CURRENCY TRANSACTIONS
The principle exchange rates used for conversion of foreign currency transactions/balances are as follows:
Closing Rate
Average Rate
31st March
2010
Rs
2009
Rs
2010
Rs
2009
Rs
US Dollar
114.84
116.28
115.95
111.12
Euro
154.52
154.59
164.51
157.89
37

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Fi F n i n a a n n c c i i a l l S t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
In Rs.'000s
Freehold
Land
Freehold
Buildings
Plant &
Machinery
Furniture
& Fittings
Office
Equipment
Computer
Equipment
Capital Work
in -Progress
Laboratory
Equipments
Motor
Vehicles
Cost / Valuation
Beginning of the year
Additions
Transfers
Transfers to Intangible
Assets
Disposals
Write offs
Interest Capitalised
Adjustments
End of the year
Depreciation
Beginning of the year
Charge for the year
Disposals
Transfers to Intangible
Assets
Adjustments
End of the year
Net Book Value
As at 31st March 2010
As at 31st March 2009
450,146
-
-
-
-
-
-
-
450,146
-
-
-
-
-
-
450,146
450,146
582,526
-
-
-
-
-
-
-
582,526
38,881
13,290
-
-
-
52,171
530,355
543,645
1,908,488
1,991
67,509
-
-
-
-
(978)
1,977,010
721,417
100,447
-
-
-
821,864
1,155,146
1,187,071
13,365
9
-
-
-
-
-
-
13,374
10,121
764
-
-
-
10,885
2,489
3,244
9,179
323
-
-
-
-
-
-
9,502
8,113
543
-
-
-
8,656
846
1,066
39,787
7,469
-
-
(645)
-
-
(52)
46,559
32,977
4,648
(527)
-
-
37,098
9,461
6,810
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12 PROPERTY, PLANT & EQUIPMENT
31st March
2009
31st March
2010
3,098,105
3,253,429
184,693
28,061
37,184
203,433
118,240
108,448
(67,787)
278
(54,304)
(3,728)
(3,574)
(2,929)
(5,341)
15,264
5,587
5,587
(4,524)
(3,494)
3,253,429
3,369,158
227,447
28,061
34,533
768,529
855,336
25,847
17,980
128,747
125,357
1,467
4,198
(3,628)
(3,456)
(2,929)
(31,372)
(6,940)
855,336
977,237
27,314
19,249
2,391,921
227,447
747
15,284
2,398,093
19,204 2,214 184,693
38

NOTES TO THE FINANCIAL STATEMENTS
12.1 Freehold land and buildings of the Company were revalued in the books to conform with the market
values as at 31st March 2006, which were assessed on a going concern basis by Messrs. A.Y.Daniel & Son,
professional valuers and the resultant surplus arising there from were transferred to the revaluation reserve
and included under capital reserves.
12.2 Reconciliation of the carrying amount of the revalued assets, if they were carried at cost:
In Rs.'000s Land Buildings
Cost - as at first April 2009
Additions during the year
st
Cost - as at First 31 March
Accumulated depreciation
Appreciation due to revaluation
Revaluation amount
Accumulated depreciation on cost as at revaluation
Revaluation surplus
Accumulated depreciation on revaluation amount
Net appreciation
Carrying amount
324,824
-
324,824
324,824
-
125,322
125,322
125,322
450,146
-
-
611,896
-
611,896
(124,943)
486,953
(29,370)
70,710
41,340
2,062
43,402
530,355
Fi F n i n a a n n c c i i a l l S t t a t e m e n t s
13 INTANGIBLE ASSETS
As at 31st March
In Rs.'000s
Cost
Opening balance
Additions during the year
Transfers from PPE
Write offs
Closing balance
Amortisation
Opening balance
Amortisation for the year
Transfers from PPE
Closing balance
Net Book Value
2010
77,303
-
-
-
77,303
39,296
13,559
-
52,855
24,448
2009
19,779
6,179
54,304
(2,959)
77,303
4,298
3,626
31,372
39,296
38,007
39
33

Fi F n i n a a n n c c i i a l l S t t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
14 LONG TERM INVESTMENT
In Rs.'000s
Name of the company
South Asian Breweries (Pte) Ltd
%
Holding
Cost as
at 31st
March
2010
Directors'
value as
at 31st
March
2010
%
Holding
22.5%
1,447,415 1,447,415
22.5%
1,447,415
1,447,415
Cost as at
31st March
2009
1,091,677
1,091,677
Directors'
value as at
31st March
2009
1,091,677
1,091,677
A consortium comprising of Carlsberg A/S, The Industrialization Fund for Developing Nations, SA Lion Holdings
(Pte) Limited and Lion Brewery (Ceylon) PLC incorporated a company based in Singapore, South Asian Breweries
Pte Ltd - Singapore , (SABL) which in turn wholly owns Carlsberg India Private Limited, India. The latter company
was formed for the purpose of investing in breweries across the various states of India. The Company owns 22.5%
of the share capital of SABL. The Board of SABL comprises of nine Directors two of whom represent the Company on
the Board of SABL. Consequent to a comprehensive assessment carried out by the management, based on Sri Lanka
Accounting Standard 27 “Investment in Associates” (Revised 2005), this investment has been classified as a Long
Term Investment by the Company due to its limited influence over SABL because of its minority position both in
ownership and on the Board.
During the year the Company invested Rs.355,738,000 /- (2009 - Rs. 346,833,725/-) in South Asian Breweries
Pte Ltd - Singapore.
The Directors have carried out a detailed assessment of the investment taking in to consideration the future projection
and are of the view that there was no impairment as at the Balance Sheet date and the classification under Long
term Investment was appropriate.
As at 31st March
In Rs.'000s
15 INVENTORIES
Raw and packing materials
Work in progress
Finished goods
Bottles and crates
Maintenance spares
Others
Provision for obsolete & slow moving items (Note 15.1)
15.1 Provision for obsolete & slow moving items
Balance as at beginning of the year
Provisions during the year
Write offs during the year
Balance as at end of the year
2010
151,339
46,406
127,696
402,791
99,767
123,474
951,473
(90,763)
860,710
34,328
83,115
(26,680)
90,763
2009
164,432
70,024
167,545
368,654
88,485
90,306
949,446
(34,328)
915,118
3,148
39,184
(8,004)
34,328
40

NOTES TO THE FINANCIAL STATEMENTS
As at 31st March
In Rs.'000s
16 TRADE AND OTHER RECEIVABLES
Trade receivables
Provision for doubtful debts ( Note 16.1)
Containers with distributors
Advances, prepayments & other receivables
Loans to Company employees (Note 16.2)
16.1 Provision for doubtful debts
Balance as at beginning of the year
Provisions during the year
Write-offs against provisions during the year
Balance as at end of the year
2010
303,930
(14,538)
716,123
207,813
1,213,328
-
2,689
11,849
-
14,538
2009
156,696
(2,689)
719,219
140,960
40
1,014,226
1,519
2,689
(1,519)
2,689
Fi F n i n a a n n c c i i a l l S t t a t e m e n t s
16.2 Loans to Company Employees
Balance as at beginning of the year
Loans granted during the year
Recovered during the year
Balance as at end of the year
40
-
(40)
-
86
-
(46)
40
-.
17 AMOUNTS DUE FROM RELATED COMPANIES
Ceylon Brewery PLC
CBL Retailers (Pvt) Limited
Carsons Management Services (Pvt) Limited
25,979
2,074
5,627
33,680
-
16,192
-
16,192
18 STATED CAPITAL
80,000,000 Ordinary shares (2009 -50,000,000) (Note 18 a & b)
35,000,000, 12.5% Redeemable Cumulative Preference Shares
(Note 18c)
2,187,801
350,000
2,537,801
987,801
350,000
1,337,801
Note 18a - The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at shareholder meetings of the Company. All ordinary shares rank equally with regard
to the right to the Company's residual assets, at the point of distribution.
Note 18b - As per the approval received from the shareholders at the Extraordinary General Meeting held on
28th August 2009 , the Company made a Rights Issue of 30,000,000 fully paid ordinary shares on the basis of
Three (3) shares to Five (5) shares at Rs. 40/- each, held as at 28th August 2009 to the existing ordinary share
holders. The issue was fully subscribed and Rs. 1,200,000,000/- was received as Rights Issue proceeds.
41

Fi F n i n a a n n c c i i a l l S t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
Note 18c - The redeemable cumulative preference shares (non-voting) were issued on 1st April 1998. The
dividend thereon is paid quarterly, whilst its redemption is to be made after 31st March 2010. No appropriation
has been made to the capital redemption reserve for the purpose of redeeming the preference shares as the
Company intends to transfer the required value for the redemption from the revenue reserve at the time the
redemption is to be made.
As at 31st March
In Rs.'000s
19 CAPITAL RESERVES
Balance as at beginning of the year
Deferred tax on revaluation of property (Note 22.1)
Balance as at end of the year
Represented by
Revaluation reserve (Note 19a)
Capital redemption reserve (Note 19b)
2010
232,479
149
232,628
162,628
70,000
232,628
2009
232,330
149
232,479
162,479
70,000
232,479
19aThe revaluation reserve relates to revaluation of land and buildings and comprises of the increase in the fair
value of land and buildings at the date of revaluation.
19b The capital redemption reserve is for the purpose of redeeming the non- voting 12.5% redeemable
cumulative preference shares.
20 PAYABLES DUE AFTER ONE YEAR
Long term loans repayable after one year (Note 20.1)
Customer deposits (Note 20.3)
22,264
627,838
650,102
32,951
593,873
626,824
20.1 Long-Term Loans repayable after one year
Balance as at the beginning of the year
Loan obtained during the year
Repayments during the year
Balance as at the end of the year (Note 20.2)
70,398
-
(37,447)
32,951
107,043
50,000
(86,645)
70,398
Less:
Repayable within one year
Repayable after one year
.
10,687
22,264
37,447
32,951
42

NOTES TO THE FINANCIAL STATEMENTS
Name of the Lender
In Rs.'000s
Interest
Rate p.a
20.2 Details of Long-Term Borrowings
Long-Term Loan Rs.146.9 million
DFCC Bank
Long-Term Loan Rs.40.7 million
DFCC Bank
Long-Term Loan Rs.50 million
DFCC Bank
10.50%
10.50%
10.50%
31st
March
2010
-
-
32,951
31st
March
2009
19,977
6,784
43,637
Repayment Terms
6 months grace and payable in
30 equal monthly instalments
commencing from
February 2007
Payable in 24 equal monthly
instalments commencing from
September 2007
Payable in 57 equal monthly
instalments commencing from
August 2008
Security
Offered
Unsecured
Unsecured
Unsecured
Fi F n i n a a n n c c i i a l l S t t a t e m e n t s
32,951 70,398
As at 31st March
In Rs.'000s
20.3 Customer Deposits
Balance as at the beginning of the year
Deposits received during the year
Deposits refunded during the year
Balance as at the end of the year
2010
593,873
59,931
(25,966)
627,838
2009
436,736
168,185
(11,048)
593,873
Refundable deposits are taken from Agents as security against the containers held with them.
21 RETIREMENT BENEFIT OBLIGATIONS
Balance as at the beginning of the year
Provision for the year
Payments during the year
Balance as at the end of the year
28,829
7,063
(1,177)
34,715
19,505
10,992
(1,668)
28,829
21.1 The gratuity liability as at 31st March 2010 amounting to Rs.34,715,186/- (2009 - Rs. 28,828,548/-) is
based on an Actuarial Valuation carried out by Mr M Poopalanathan, AIA, M/s. Actuarial and Management
Consultants ( Pvt) Limited, a firm of professional actuaries.
The principal assumptions made are given below:
- Rate of discount 12% p.a.
- Rate of pay increase 10% p.a.
- Retirement age 55 years
43

Fi F n i n a a n n c c i i a l l S t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
As at 31st March
In Rs.'000s
22 DEFERRED TAXATION
Deferred tax liability (Note 22.1)
Deferred tax asset (Note 22.2)
Balance as at the end of the year
22.1 Deferred tax liability
Balance as at the beginning of the year
Reversal during the year
Impact on revaluation of property
Balance as at the end of the year
22.2 Deferred tax asset
Balance as at the beginning of the year
Reversal during the year
Balance as at the end of the year
2010
401,564
(3,089)
398,475
413,371
(11,658)
(149)
401,564
3,267
(178)
3,089
2009
413,371
(3,267)
410,104
419,602
(6,082)
(149)
413,371
3,327
(60)
3,267
22.3 Unused tax losses
The deferred tax asset was recognised in respect of carried forward tax loss amounting to Rs. 8,825,325/-
(2009 - Rs.9,334,494/- ) which do not expire under current tax law, since it is probable that future taxable profits
will be available, against which the unused tax losses can be utilised.
23 TRADE AND OTHER PAYABLES
Trade payables
Others, including accrued expenses
Unclaimed dividends
45,075
165,105
234
210,414
53,647
112,109
378
166,134
24 AMOUNTS DUE TO RELATED COMPANIES
Carlsberg A/S
Carsons Management Services (Pvt) Limited
25 CURRENT TAXATION
Excise Duty
Value Added Tax
Income tax
Social Responsibility Levy
Nation Building Tax
33,183
-
33,183
306,192
138,237
336
4,593
26,189
475,547
75,041
17,690
92,731
213,784
105,348
110
3,207
7,169
329,618
44

NOTES TO THE FINANCIAL STATEMENTS
26 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
Subsequent to the Balance Sheet date, no circumstances have arisen which required adjustment to or disclosure
in the Financial Statements.
27 COMPARATIVE FIGURES
Certain comparative figures have been restated to conform to the classifications and presentations as at 31st
March 2010.
28 SEGMENTAL ANALYSIS
The Company does not distinguish its products into significant components for different geographical segments
as the differentiations are insignificant.
29 CONTINGENT LIABILITIES
(I) Contingent liabilities as at 31st March 2010 amount to Rs. 37,138,035/- (2009 - Rs.21,870,806/-), being
bank guarantees given to government bodies for operational purposes.
(ii) Following legal matters are outstanding against the company and no provision has been made in the
financial statements to this regard.
(a) The Customs Department instituted a prosecution in the Magistrate's Court of Kaduwela in Case No.
11303/Customs against the company and its directors to recover Excise Duty amounting to Rs.
58,753,582/94 comprising of disputed Excise Duty of Rs. 29,376,791/47 and its penalty of Rs.
29,376,791/47. The Company and the directors have filed an application for Writ in the Court of Appeal to
quash the Certificate Excise Duty in Default issued by the DG of Customs and Excise Duty to recover the said
sum and obtained a Stay Order in respect of the proceedings of the MC Kaduwela Case. The Court of Appeal
matter is currently pending.
Fi n a n c i a l S t a t e m e n t s
(b) 14 cases have been filed in the District Court of Balapitiya against the Company and two others (Case
numbers 2816/M to 2819/M, 2682/MR, 3031/M to 3038/M and 3058/M) claiming damages for injuries
and deaths caused due to a road accident which occurred at Induruwa, Balapitiya on 10th April 2007
involving a truck transporting products of the company and a passenger bus. The aggregate of all the claims of
said 14 cases amounts to Rs 46,000,000/-. All the cases are currently pending.
(iii) The gratuity liability as at 31st March 2010 amounting to Rs. 34,715,186/- (2009 - Rs. 28,828,548/-) is
based on an Actuarial Valuation carried out by Mr M Poopalanathan, AIA, Messrs. Actuarial Management
Consultants ( Pvt) Limited. If the Company had provided for gratuity for employees on the basis of a half month
salary for each completed year of service, the liability would have been Rs.39,207,862/- (2009 - Rs.
33,960,404/-). A contingent liability of Rs.4,492,676/- (2009 - Rs.1,995,997/-) would arise if the Company
ceases to be a going concern; as in that event the amount payable as per the Payment of Gratuity Act would be
Rs. 34,658,834/- (2009 - Rs.30,824,544/-). The principle assumptions made are given under Note 21 to
these financial statements. The Company is of the view that no provision is required for the contingent liability.
Apart from the above, there were no other material contingent liabilities which would require adjustments to or
disclosure in the Financial Statements.
30 CONTRACTS FOR CAPITAL EXPENDITURE
As at the Balance Sheet date, the Company had no contracts entered in to with regard to capital expenditure
c ommitments. However the company has incurred an amount of Rs.227,449,531/- (2009 - Rs.184,694,714/-)
being the payments made on capital work in progress.
31 RELATED PARTY TRANSACTIONS
(A) Transactions with parent company - Ceylon Brewery PLC
Messrs. L.C.R.de C.Wijetunge, H.Selvanathan, M.Selvanathan (Resigned w.e.f. 02.09.2009), S.K.Shah,
D.C.R.Gunawardena, Directors of the Company are also Directors of Ceylon Brewery PLC, with which the
following contracts / transactions have been entered into during the year by the Company in the normal course of
business.
(I) The Company has paid Rs.61,949,353/- (2009 - Rs.53,974,735/-) as royalty in accordance with the licensed
brewing agreement with the Company.
42 45

Fi n a n c i a l S t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
(ii) The Company has paid Rs.43,750,000/- (2009 - Rs.43,750,000/-) as preference dividend at the rate
of 12.5% (2009 - 12.5%) per annum .
(iii) The Company has advanced a sum of Rs.32,000,000/- from the Company which remained outstanding
as at 31st March 2010. Interest has been paid on the monthly outstanding balance at the rate of 9.25% per
annum.
(B) Transactions with Fellow Susidiary - CBL Retailers (Private) Limited
Messrs. S.K. Shah, C.P. Amerasinghe and D.R.P. Goonetilleke, Directors of the Company are also Directors of
CBL Retailers (Private) Limited, to which the Company sold beer for a total value of Rs 23,582,349/-
( 2009 - Rs. 16,189,180/- ) during the year.
(C) Transactions with group entities
Messrs. H.Selvanathan, M.Selvanathan (Resigned w.e.f. 02.09.2009), S.K.Shah,D.C.R.Gunawardena and K.
Selvanathan Directors of the Company, are also Directors of Carsons Management Services (Private) Ltd.,
which provides management and secretarial services to the Company. During the year management &
secretarial fees amounting to Rs.108,770,391/- (2009 - Rs.88,666,248/-) was paid by the Company to
Carsons Management Services (Private) Limited.
An amount of Rs. 4,799,222/- is payable as management & secretarial fees to Carsons Management
Services (Private) Ltd. as at 31st March 2010 (2009 - Rs.17,690,346/-).
(D) Transactions with other related entities
Messrs. Dato'Voon Loong Chin D.S.P.N and R. E. Bagattini Directors of the Company , represent Carlsberg
Brewery Malaysia Berhad, while R.E. Bagattini also represent Carlsberg A/S with which the following
contracts / transactions have been entered into during the year by the Company in the normal course of
business.
(i) As per the licensed brewing agreement, a sum of Rs. 117,443,332/- (2009 - Rs 99,211,239/-) was paid
as royalty during the year to Carlsberg A/S.
(ii) The Company also purchased Carlsberg beer cans from Carlsberg Brewery Malaysia Berhad for the
purpose of resale, for a total value of Rs 1,559,400 /- (2009 - Rs.7,474,801/-)
(iii) An amount of Rs. 33,183,403 /- (2009 - Rs.75,041,479/-) is payable to Carlsberg A/S as at 31st
March 2010.
(iv) The Company purchases a part of its requirement of the raw material rice from Ran Sahal (Pvt) Limited.
The entire production of Ran Sahal (Pvt) Limited is exclusively sold to the Company. Towards this the Company
advances funds to Ran Sahal (Pvt) Limited from time to time in lieu of future purchases. As at the Balance Sheet
date an amount of Rs. 53,038,038/- (2009 - Nil) has been advanced to Ran Sahal (Pvt) Limited which
remains to be settled from future purchases..
(v) Messrs. H.Selvanathan (K. Selvanathan - alternate Director to H. Selvanathan in Calsberg India Private
Limited), M. Selvanathan , Directors of the Company, are also Directors of South Asian Breweries Pte Ltd.-
Singapore and Carlsberg India Private Limited. R. E. Bagattini is a Director of Carlsberge India Private Limited.
During the year the Company invested Rs. 355,738,000/- ( 2009 - Rs.346,833,725/-) on equity shares of
South Asian Breweries Pte Ltd - Singapore.
(E) Transactions with key management personnel
(I) According to Sri Lanka Accounting Standard 30 (Revised 2006) "Related Party Disclosures", key
management personnel are those having authority and responsibility for planning and controlling the activities
of the entity. Accordingly, the Directors of the Company and its parent company (including executive and non
executive directors) and their immediate family members have been classified as KMP of the Company.
(ii) The compensation paid to key management personnel as short-term employment benefits is disclosed in
aggregate in Note 6 to the Financial Statements. No other payments such as post-employment benefits,
termination benefits and share based payments have been paid to key management personnel during the
year.
46
32 DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors takes the responsibiity for the preparation and presentation of these Financial Statements.
Please refer page 21 for the Statement of Directors' Responsibilities for financial reporting.

VALUE ADDED STATEMENT
For the year ended 31st March
In Rs.'000s
Net Revenue
Other Income
Cost of material & services bought from
outside
Value Added
Distributed as follows:
To Employees:
as remuneration and other employee costs
To Government
Value Added Tax
as Excise Duty
as Income Tax/deferred tax
as Social Responsibility Levy
as Economic Service Charge
as Nation Building Tax
To Providers of Capital
as preference dividends
as finance expenses
Retained in the Business
as depreciation/amortisation
as profit for the year
2010 2009
7,919,292
2,624
9,513,896
(3,332,105)
6,181,791
6,094,726
Value Added Tax 1,591,980 1,236,045
373,024
1,591,980
2,918,917
(6,022)
45,025
17,676
221,667
43,750
240,105
138,916
596,753
6,181,791
6.03
25.75
47.22
(0.10)
0.73
0.29
3.59
0.71
3.88
2.25
9.65
100.00
1,625
7,332,396
(2,780,151)
4,552,245
273,447
1,236,045
2,378,788
(7,219)
36,683
11,402
10,574
43,750
391,339
132,373
45,063
4,552,245
6.01
27.15
52.26
(0.16)
0.81
0.25
0.23
0.96
8.60
2.91
0.99
100.00
V a V l u a e l u A e d A d d e d e S d t a S t t e a m t e m n te n t
1. The Statement of Value Added shows the quantum of wealth generated by the activities of the Company and its
applications.
2. Value Added Tax is excluded in arriving at the above Net Revenue. Therefore, tax liability / payment made to the
Government during the year include the following:
For the year ended 31st March
In Rs.'000s
Value Added Tax (paid but not included under Net Revenue)
Excise Duty (included under Net Revenue)
Income Tax
Social Responsibility Levy
Economic Service Charge
Nation Building Tax
Total taxes paid to the Government
2010
1,591,980
2,918,917
-
45,025
17,676
221,667
4,795,265
2009
1,236,045
2,378,788
2
36,683
11,402
10,574
3,673,494
44
47

F i v F e i v e Y e Y a e a r r S S u u m m a r y
FIVE YEAR SUMMARY
Year ended 31st March
In Rs.'000s
Revenue
Other income
Total expenditure
Profit from operating activities
before finance expenses
Finance expenses
Profit from ordinary activities
before tax
Income tax
Profit for the period
Dividends - Ordinary
Dividends - Preference
2010
7,919,292
2,624
7,921,916
(7,049,116)
872,800
(240,105)
632,695
7,808
640,503
-
43,750
2009
6,094,726
1,625
6,096,351
(5,623,123)
473,228
(391,339)
81,889
6,924
88,813
-
43,750
2008
5,207,004
6,631
5,213,635
(4,829,707)
383,928
(229,964)
153,964
24,433
178,397
-
43,750
2007
4,365,261
19,983
4,385,244
(4,244,223)
141,021
(61,495)
79,526
(65,643)
13,883
150,000
50,750
2006
3,841,710
8,985
3,850,695
(3,465,572)
385,123
(33,188)
351,935
247
352,182
150,000
50,750
As at 31st March
In Rs.'000s
2010
2009
2008
2007
2006
Balance Sheet
Stated capital
2,537,801
1,337,801
1,337,801
1,337,801
1,337,801
Capital reserves
232,628
232,479
232,330
232,181
232,032
Retained profits
1,207,821
611,068
566,005
431,358
618,225
Long-term borrowings repayable
after one year
3,978,250
22,264
2,181,348
32,951
2,136,136
27,893
2,001,340
78,369
2,188,058
-
Capital employed
4,000,514
2,214,299
2,164,029
2,079,709
2,188,058
Represented by
Non-current assets
3,863,784
3,527,777
3,089,900
2,622,595
2,296,200
Current assets
2,259,263
2,014,852
1,827,303
1,287,058
1,111,038
Current liabilities
(1,061,505)
(2,295,524)
(1,880,658)
(969,286)
(469,509)
Customer deposits
(627,838)
(593,873)
(436,736)
(415,285)
(360,190)
Retirement benefit obligations
(34,715)
(28,829)
(19,505)
(21,730)
(18,768)
Deferred tax liabilities
(398,475)
(410,104)
(416,275)
(423,643)
(370,713)
4,000,514
2,214,299
2,164,029
2,079,709
2,188,058
48

FIVE YEAR SUMMARY
Year ended 31st March
In Rs.'000s
CASH FLOW STATISTICS
Net cash inflows / (outflows) from
operating activities
Net cash inflows / (outflows) from
investing activities
Net cash inflows/ outflows from
Financing activities
Net cash movement for the year
RATIOS & STATISTICS
Return on shareholders' funds
Assets turnover (times)
Equity to total assets (times)
Interest cover (times)
Gearing ratio (% )
Current ratio (times)
Earnings/(loss) per share
Price earnings ratio (times)
Market price per share (Rs)
2010
738,854
(437,363)
1,118,658
1,420,149
16.45
1.29
1.69
3.64
16.46
2.13
7.46
11.60
86.50
2009 200 8 2007 2006
7,782 (129,917) 20,862 439,285
(397,756) (572,555 ) (384,794) (200,782)
(80,395) (73,868 ) (63,488) (200,681)
(470,369) (776,340) (427,420) 37,822
2.4 6 7.54 (2.23) 16.40
1.1 0 1.06 1.12 1.13
3.0 3 2.75 2.37 1.85
1.2 1 1.67 2.29 11.60
53.30 49.72 37.12 14.56
0.88 0.97 1.33 2.37
0.90 2.69 (0.74) 6.03
61.11 22.30 (84.76) 11.57
55.00 60.00 62.50 69.75
F i v F e i v e Y e Y a e r a r S S u u m m a r y
Net assets per share (Rs)
Market capitalisation (Rs’000)
Dividends - Preference %
- Ordinary %
45.35
6,920,000
12.50
-
36.63 35.72 33.03 36.76
2,750,000 3,000,000 3,125,000 3,487,500
12.50 12.50 14.50 14.50
- - 30.00 30.00
49

USD FINANCIALS
PREPARATION OF US DOLLAR FINANCIALS
The translation of the Sri Lankan Rupee amounts into
US Dollars is included solely for the convenience of Shareholders,
Investors, Bankers and other users of Financial Statements.

INCOME STATEMENT
For the year ended 31st March
In USD '000s Note
Revenue
Cost of sales
Gross profit
Other income
Distribution expenses
Administrative expenses
Other expenses
Profit from operations
Finance expenses
Profit before taxation
Income tax
Profit for the period
Figures in brackets indicate deductions.
Note
2
2010
68,299
(45,924)
22,375
23
22,398
(10,146)
(3,027)
(1,697)
7,528
(2,071)
5,457
67
5,524
2009
54,848
(37,307)
17,541
15
17,556
(9,874)
(2,570)
(854)
4,258
(3,522)
736
62
798
U U S S D D Fi F n i n a a n n c c i a i a l l S t t a t t e m e n t s
51

U S D Fi F n i n a a n n c c i i a a l l S t t a t t e m e n t s
BALANCE SHEET
As at 31st March
In USD '000s
ASSETS
Non- Current Assets
Property, plant & equipment
Intangible Assets
Long-term investment
Total Non-Current Assets
Current Assets
Inventories
Trade and other receivables
Amounts due from related companies
Cash and cash equivalents
Total Current Assets
Total Assets
EQUITY AND LIABILITIES
Equity
Stated capital
Capital reserves
Currency fluctuations
2010
20,828
213
12,604
33,645
7,495
10,565
294
1,320
19,674
53,319
23,070
2,026
(9,115)
2009
20,623
327
9,388
30,338
7,870
8,722
139
596
17,327
47,665
23,070
1,999
(19,825)
Retained profits
18,662
13,515
Total Equity
34,643
18,759
Non-Current Liabilities
Payables due after one year
Retirement benefit obligations
5,661
302
5,391
248
Deferred taxation
3,470
3,527
Total Non-Current Liabilities
9,433
9,166
Current Liabilities
Trade and other payables
1,832
1,429
Amounts due to related companies
289
797
Current taxation
4,141
2,835
Long-term loans repayable within one year
93
321
Short-term loan
-
3,440
Bank overdrafts (unsecured)
2,888
10,918
Total Current Liabilities
9,243
19,740
Total Liabilities
18,676
28,906
Total Equity and Liabilities
53,319
47,665
52

FINANCIAL HIGHLIGHTS
Year ended 31st March
In USD '000s
Revenue
Other income
Total Expenditure
Profit from operating activities before
finance expenses
Finance expenses
Profit from ordinary activities before
tax
Income tax (expense) / release
Profit for the period
Dividends - Ordinary
Dividend - Preference
As at 31st March
In USD '000s
2010
68,299
23
68,322
(60,794)
7,528
(2,071)
5,457
67
5,524
-
377
2010
2009
54,848
15
54,863
(50,605)
4,258
(3,522)
2009
736
62
798
-
394
2008
46,855
60
46,915
(43,460)
3,455
(2,069)
1,386
220
1,606
-
394
2008
2007 2006
41,322 37,634
189 88
41,511 37,722
(40,176) (33,950)
1,335 3,772
(582) (325)
753 3,447
(621)
2
132 3,449
1,364 1,447
480 497
2007 2006
U U S S D D Fi F n i n a a n n c c i a i a l l S t t a t t e m e n t s
Balance Sheet
Stated capital
23,070
23,070
23,070
23,070
23,070
Capital reserves
2,026
1,999
2,137
2,111
2,239
Currency fluctuations
(9,115)
(19,825)
(10,762)
(10,909)
(10,163)
Retained profits
18,662
13,515
5,207
3,921
5,965
34,643
18,759
19,652
18,193
21,111
Long-term borrowings repayable after one
year
193
285
257
712
-
Capital Employed
34,836
19,044
19,909
18,905
21,111
REPRESENTED BY
Non-current assets
33,645
30,339
28,425
23,840
22,153
Current assets
19,673
17,328
16,811
11,699
10,719
Current liabilities
(9,243)
(19,740)
(17,301)
(8,810)
(4,530)
Customer deposits
(5,467)
(5,108)
(4,018)
(3,775)
(3,473)
Retirement benefit obligations
(302)
(248)
(179)
(198)
(181)
Deferred tax liabilities
(3,470)
(3,527)
(3,830)
(3,851)
(3,577)
34,836
19,044
19,909
18,905
21,111
53

U S D Fi F i n a n c i i a l l S t t a t e m e n t s
NOTES TO THE FINANCIAL STATEMENTS
1 BASIS OF CONVERSION
The translation of Sri Lankan Rupee amounts into US Dollar amounts is solely for the convenience of the
shareholders,investors,bankers and other users of the Financial Statements.
The translation of the Financial Statements into US Dollars were effected based on the following exchange rates:
Income Statement
Monetary assets and liabilities
Non-current assets and liabilities
Preference share capital
Ordinary share capital
For the year ended 31st March
In USD '000s
2. REVENUE
Local revenue
Export revenue
Average rate
Closing rate
Closing rate
Closing rate
Historical rate
2010
115.95
114.84
114.84
114.84
57.99
2010
66,942
1,357
68,299
2009
2009
111.12
116.28
116.28
116.28
57.99
53,535
1,313
54,848
54

INFORMATION TO SHAREHOLDERS &
INVESTORS
1 STOCK EXCHANGE LISTING
Lion Brewery (Ceylon) PLC, is a Public Quoted Company, the issued ordinary shares of which are listed with the
Colombo Stock Exchange of Sri Lanka.
2 SHARE VALUATION
The market price of the Company's share as at 31st March 2010 was Rs.86.50 per share ( 2009 - Rs.55.00).
As at 31st March
Number of shareholders
(a) Frequency distribution of shareholdings as at 31st March 2010
Distribution of Shares
1 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 -1,000,000
Above 1,000,000
Total
No. of
share
holders
1,131
378
51
11
2
1,573
2010
1,607
Residents Non- Residents Total
No. of
No. of
No. of shares % share No. of shares % share No. of shares %
holders
holders
335,757
1,295,960
1,335,924
4,733,694
0.42
1.62
1.67
5.92
42,670,460 53.34
50,371,795 62.96
Categories of Shareholders No. of Shareholders No. of Shares %
Individuals
Institutions
Total
8
9
12
2
3
34
1,498
109
1,607
4,000
26,579
481,000
286,871
28,829,755
0.01
0.03
0.60
0.36
36.04
1,139
387
63
13
5
2009
978
339,757
1,322,539
1,816,924
5,020,565
71,500,215
0.42
1.65
2.27
6.28
89.38
29,628,205 37.04 1,607 80,000,000 100.00
2,745,309
77,254,691
80,000,000
3.43
96.57
100.00
(b) The number of shares held by non-residents as at 31st March 2010 was 29,628,205 which amounts to
37.04%.
( c) Percentage of shares held by the public as at 31st March 2010 was 18.99%.
4 PREFERENCE SHARES
Ceylon Brewery PLC holds 35,000,000 redeemable cumulative preference shares of Lion Brewery (Ceylon) PLC.
Redemption of these shares is to be made after 31st March 2010.
I n f o r m I n a f t o i r o m n a t o i o S n h t a o r S e h a h r o e l d h e o r l d s e & r s I & n v I e n s v t e o s r t s o r s
55

I n f I n o f r o m r a m t a i t o i o n n t o t o S h S a h r a e r e h o h l o d l e d r e s r s & & I n I n v v e e s s t t o o r r s s
INFORMATION TO SHAREHOLDERS &
INVESTORS
5 MARKET PERFORMANCE - ORDINARY SHARES
For the year ended 31st March
Highest (Rs.)
Lowest (Rs.)
Value of Shares traded (Rs’000)
No. of shares traded
2010
93.00
74.50
385,816
4,599,100
2009
61.00
41.00
1,954
34,100
6 MARKET CAPITALIZATION
The market capitailsation of the Company, which is the number of ordinary shares in issue multiplied by the market
value of a share was Rs. 6,920,000,000/- as at 31st March 2010 ( 2009 - Rs 2,750,000,000/-).
7 DIVIDENDS
Preference
A preference dividend of 12.5% per annum on redeemable cumulative preference shares was paid on 30th June
2009, 30th September 2009, 31st December 2009 and 31st March 2010.
Ordinary
The board of Directors has recommended the payment of a first and final dividend of Rs.3/- per share for the year
ended 31st March 2010 ( 2009 - Nil) which is to be approved at the Annual General Meeting to be held on 11th
of June 2010.
8 NUMBER 0F EMPLOYEES
There were 195 (2009 -193) employees as at the Balance Sheet date.
56

GLOSSARY OF FINANCIAL TERMS
Appropriations
Apportioning of earnings as dividends, capital and
revenue reserves
Capital reserves
Reserves identified for specified purposes and
considered not available for distribution.
Cash equivalents
Liquid investments with original maturities of six
months or less.
Contingent liabilities
Conditions or situations at the Balance Sheet date,
the financial effects of which are to be determined
by future events which may or may not occur.
Current ratio
Current assets divided by current liabilities.
Debt
Total fixed interest bearing capital.
Dividend cover (Ordinary)
Post tax profit after preference dividend, divided
by gross ordinary dividend. It measures the
number of times ordinary dividends are covered by
distributable profits.
Dividend per ordinary share
Dividends paid and proposed, divided by the
number of ordinary shares in issue which ranked
for those dividends.
Earnings per ordinary share
Profits attributable to ordinary shareholders divided
by the number of ordinary shares in issue and
ranking for dividend.
Equity
Ordinary share capital plus reserves.
Gearing
Ratio of Borrowings to capital employed.
Borrowings include all interest bearing long term
liabilities
Interest cover
Profits before tax and interest charges divided by
interest charges.
Market capitalisation
The Market value of a company at a given date
obtained by multiplying the market price of a share
by the number of issued ordinary shares.
Net assets per ordinary share
Total assets less liabilities excluding preference
share capital divided by the number of ordinary
shares in issue. This represents the theoretical value
per share if the Company is broken up.
Price earning ratio - (P/E)
Market price of a share divided by earnings per
share
Related parties
Parties who could control or significantly influence
the financial and operating decisions / policies of
the company.
Revenue reserves
Reserves considered as being available for future
distribution and appropriations.
Value addition
The quantum of wealth generated by the activities of
the Company
Working capital
Capital required to finance the day-to-day
operations ( current assets less current
liabilities).
Gl o s s a r y o f F i n a n c i a l T e r m s
Events occurring after Balanced Sheet
date Significant events that occur between the
Balance Sheet date and the date on which
financial statements are authorised for issue.
54 57

N o t i c e o f M e e t i n g
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that the Fourteenth Annual General Meeting of LION BREWERY PLC will be held on
Friday the 11th day of June 2009 at 2.30 pm at the 'Samudra Hotel', Sri Lanka Institute of Tourism & Hotel
Management, Committee Room 'C', 78, Galle Road, Colombo 3 for the following purposes :
1. To receive and adopt the Annual Report of the Board of Directors and the Financial Statements for the year
ended 31st March 2010, together with the Report of the Auditors thereon.
2. To declare a dividend as recommended by the Directors.
3. To re-elect Mr. S. K. Shah, who retires in terms of Articles 88 and 90 of the Articles of Association of the
Company.
4. To re-elect Mr. K. Selvanathan, who retires in terms of Articles 87 and 94 of the Articles of Association of the
Company.
5. To re-elect Mr. R. E. Bagattini, who retires in terms of Articles 87 and 94 of the Articles of Association of the
Company.
6. To re-appoint Mr. L.C.R. de C. Wijetunge as a Director of the Company who is over Seventy years of age and to
consider and if deemed fit to pass the following resolution :
"IT IS HEREBY RESOLVED that the age limit stipulated in Section 210 of the Companies Act No. 7of 2007 shall
not be applicable to Mr. L.C.R. de C. Wijetunge who is 71 years of age and that he be re-appointed a Director
of the Company from the conclusion of the Annual General Meeting for a further period of one year."
7. To re-appoint Messrs KPMG Ford, Rhodes, Thornton & Company, Chartered Accountants as Auditors of the
Company as set out in Section 154 (1) of the Companies Act No. 7 of 2007 and to authorise the Directors to
determine their remuneration.
By Order of the Board
CARSONS MANAGEMENT SERVICES (PRIVATE) LIMITED
Secretaries
Colombo, 7th May 2010
Notes
1. A member is entitled to appoint a proxy to attend and vote instead of him/her. A proxy need not be a member of
the Company. A Form of Proxy accompanies this notice.
2. The completed Form of Proxy must be deposited at the Registered Office, No.61, Janadhipathi Mawatha,
Colombo 1, not later than 2.30 p. m. on 9th June 2010.
3. A person representing a Corporation is required to carry a certified copy of the resolution authorising him/her to
act as the representative of the Corporation. A representative need not be a member.
4. The transfer books of the Company will remain open.
5. Security Check
We shall be obliged if the shareholders/proxies attending the Annual General Meeting, produce their National
Identity Card to the security personnel stationed at the entrance lobby.
58

LION BREWERY (CEYLON) PLC FORM OF
PROXY
Form of Proxy
* I/We……………………………………………………………………………………………………………...................
of…………………………………………………………………………………………………………………....................
being *a Member/Members of LION BREWERY (CEYLON) PLC
hereby appoint ………………………………………………………………………………………………........................
of ………………………………………………………………………………………………….....................bearing NIC
No./Passport No…………………………………..................................................................... or failing him/her.
Lionel Cuthbert Read De Cabraal Wijetunge
Or Failing Him,
Hariharan Selvanathan Or Failing Him,
Suresh Kumar Shah Or Failing Him,
Dato Voon Loong Chin D.S.P.N. Or Failing Him,
Don Chandima Rajakaruna Gunawardena
Or Failing Him,
Dilkushan Ranil Pieris Goonetilleke Or Failing Him,
Chandraratne Talpe Liyanage
Or Failing Him,
Chitta Prasanna Amerasinghe
Or Failing Him,
Krishna Selvanathan
Or Failing Him,
Roy Enzo Bagattini
As *my/our proxy to attend at the Fourteenth Annual General Meeting of the Company to be held on Friday the 11th day of June
2010 at 2.30 p.m. at the 'Samudra Hotel', Sri Lanka Institute of Tourism & Hotel Management, Committee Room 'C', 78 Galle
Road, Colombo 3 and any adjournment thereof and at every poll which may be taken in consequence thereof.
F o r m o f P r o x y
To adopt the Annual Report of the Board of Directors and the Financial Statements for the year
ended 31st March 2010, together with the Report of the Auditors thereon.
For
Against
To declare a dividend of Rs 3/-per share as a First & Final dividend for the financial year ended
31st March 2010 as recommended by the Directors
To re-elect Mr. S. K. Shah who retires by rotation in terms of Articles 88 & 90 of the Articles
of Association of the Company.
To re-elect Mr. K. Selvanathan who retires by rotation in terms of Articles 87 & 94 of the
Articles of Association of the Company.
To re-elect Mr. R. E. Bagattini who retires by rotation in terms of Articles 87 & 94 of the
Articles of Association of the Company.
To re-appoint Mr. L.C.R. de C. Wijetunge who is over Seventy years of age as a Director
of the Company.
To re-appoint M/s KPMG Ford, Rhodes, Thornton & Company, Chartered Accountants as
Auditors of the Company as set out in Section 154 (1) of the Companies Act No. 7 of 2007
and to authorise the Directors to determine their remuneration.
Signed this ……… day of ……………………………….Two Thousand and Ten.
……………………………………….
Signature/s
Notes
1.* Please delete the inappropriate words.
2. A shareholder entitled to attend and vote at a General Meeting of the Company, is entitled to appoint a proxy to
attend and vote instead of him/her and the proxy need not be a shareholder of the Company.
A proxy so appointed shall have the right to vote on a show of hands or on a poll and to speak at the General Meeting of the
shareholders
3. A shareholder is not entitled to appoint more than one proxy on the same occasion.
4. Instructions are noted on the reverse hereof.
56 59

F o r m o f P r o x y
LION BREWERY (CEYLON) PLC FORM OF
PROXY
INSTRUCTIONS AS TO COMPLETION
1. Kindly perfect the form of proxy after filling in legibly your full name and address, by signing in the space
provided. Please fill in the date of signature.
2.If you wish to appoint a person other than the Directors as your proxy, please insert the relevant details in the
space provided overleaf.
3. In terms of Article 67 of the Articles of Association of the Company:
The instrument appointing a proxy shall be in writing and :
(I)
(ii)
in the case of an individual shall be signed by the appointor or by his attorney; and
in the case of a Corporation shall be either under its common seal or signed by its attorney or by an Officer on
behalf of the Corporation.
The Company may, but shall not be bound to, require evidence of the authority of any such attorney or officer.
A proxy need not be a member of the Company.
4. In terms of Article 62 of the Articles of Association of the Company:
In the case of joint-holders of a share, the senior who tenders a vote, whether in person or by proxy or by attorney
or by representative, shall be accepted to the exclusion of the votes of the other joint-holders and for this purpose
seniority shall be determined by the order in which the names stand in the Register of Members in respect of the
joint holding.
5. To be valid the completed form of proxy should be deposited at the Registered Office of the Company situated at
No. 61, Janadhipathi Mawatha, Colombo 1, not later than 2.30 p.m., on 9th June 2010.
Please fill in the following details:
Name
Address
:………………………………………………………….
:………………………………………………………….
………………………………………………………….
Jointly with
Share folio No.
………………………………………………………….
:………………………………….............................
60