UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K/A
                                (Amendment No. 2)

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

        Date of Report (Date of earliest event reported): March 27, 2003
                                                          --------------

                           Constellation Brands, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                                    001-08495
                            ------------------------
                            (Commission File Number)

               Delaware                                          16-0716709
     ----------------------------                            -------------------
     (State or other jurisdiction                            (IRS Employer
     of incorporation)                                       Identification No.)


              300 WillowBrook Office Park, Fairport, New York 14450
            ---------------------------------------------------------
            (Address of principal executive offices)       (Zip Code)


                                 (585) 218-3600
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


                                 Not Applicable
          -------------------------------------------------------------
          (Former name or former address, if changed since last report)



EXPLANATORY NOTE
     The  Registrant  is filing this Current Report on Form 8-K/A (Amendment No.
2)  to  amend  and  restate in its entirety Item 7 of its Current Report on Form
8-K/A  (Amendment No. 1) dated March 27, 2003 and filed on June 9, 2003 in order
to  amend the pro forma financial information and include an exhibit required by
Item  7. The Registrant's Current Report on Form 8-K/A (Amendment No. 1) amended
the  Registrant's  Current  Report on Form 8-K dated March 27, 2003 and filed on
April  9,  2003.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.

(a)   FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

      The financial statements required by this item and included in this Report
      are  the  BRL  Hardy  Limited  (now  known  as Hardy Wine Company Limited)
      consolidated  statements  of financial position as at 31 December 2002 and
      31  December  2001  and  the  related consolidated statements of financial
      performance  and consolidated statements of cash flows for each of the two
      years  in  the  period  ended  31  December  2002, together with the notes
      thereto, and the report of PricewaterhouseCoopers, chartered  accountants,
      thereon.

(b)   PRO FORMA FINANCIAL INFORMATION.

      The  pro forma financial information required by this item and included in
      this  Report  are the unaudited pro forma condensed combined balance sheet
      as  of  February  28,  2003, the unaudited pro forma combined statement of
      income for the year ended February 28, 2003, and the notes thereto.

(c)   EXHIBITS.

      The following exhibits are filed as part of this Form 8-K/A.

Exhibit  No.  Description
-----------   -----------


   2.1        Implementation Deed dated 17 January  2003  between  Constellation
              Brands,  Inc.  and  BRL  Hardy Limited.

   2.2        Transaction Compensation Agreement  dated 17 January 2003  between
              Constellation Brands, Inc. and BRL Hardy Limited.

   2.3        No   Solicitation   Agreement  dated   13  January  2003   between
              Constellation Brands, Inc. and BRL Hardy Limited.

   2.4        Backstop Fee Agreement dated 13 January 2003 between Constellation
              Brands, Inc. and BRL Hardy Limited.

   2.5        Letter  Agreement  dated  6 February  2003  between  Constellation
              Brands, Inc. and  BRL Hardy Limited.

   4.1        Amended and Restated Credit Agreement, dated as of March 19, 2003,
              among Constellation Brands, Inc.  and certain of its subsidiaries,
              the lenders named therein, JPMorgan Chase Bank, as  Administrative
              Agent, and JPMorgan Europe  Limited,  as  London Agent.

   4.2        Amended and Restated Bridge Loan Agreement, dated  as  of  January
              16, 2003  and  amended  and  restated  as of March 26, 2003, among
              Constellation Brands, Inc. and  certain  of  its subsidiaries, the
              lenders  named therein, and JPMorgan Chase Bank, as Administrative
              Agent.

  23.1        Consent  of  PricewaterhouseCoopers  dated  July 17,  2003.



                                BRL HARDY LIMITED


                               ABN 86 008 273 907


                          AND ITS CONTROLLED ENTITIES


                                      2002


                                FINANCIAL REPORT



CONTENTS OF FINANCIAL REPORT
----------------------------

Statements of financial performance
Statements of financial position
Statements of cash flows

Notes to the financial statements
     1   Statement of accounting policies
     2   Revenue
     3   Operating profit
     4   Income tax
     5   Dividends
     6   Dividend franking account
     7   Cash assets
     8   Receivables
     9   Inventories
    10   Other current assets
    11   Investments accounted for using the equity method
    12   Other financial assets
    13   Grape vines
    14   Property, plant and equipment
    15   Intangibles
    16   Deferred tax assets
    17   Payables
    18   Interest bearing liabilities
    19   Current tax liabilities
    20   Deferred tax liabilities
    21   Provisions
    22   Share capital - BRL Hardy Limited
    23   Reserves and retained profits
    24   Remuneration of directors and executives
    25   Remuneration of auditors
    26   Reconciliation of net cash inflow from operating activities to
         operating profit after income tax
    27   Outside equity interests
    28   Joint ventures
    29   Contingent liabilities
    30   Commitments for expenditure
    31   Superannuation commitments
    32   Related parties
    33   Particulars in relation to controlled entities
    34   Statement of operations of segments
    35   Earnings per share
    36   Financial instruments
    37   Significant event occurring after reporting date
    38   Reconciliations to U.S. GAAP


Directors' declaration
Independent audit report






STATEMENTS OF FINANCIAL PERFORMANCE
                                                                                              CONSOLIDATED
                                                                                          2002           2001
FOR THE YEAR ENDED 31 DECEMBER 2002                                           Notes      $'000          $'000
-----------------------------------                                          -------  -----------    -----------
                                                                                            
Revenue from operating activities                                               2         854,142        757,608
Other revenue                                                                   2          16,194         13,769
                                                                                      -----------    -----------
REVENUE FROM ORDINARY ACTIVITIES                                                          870,336        771,377

Cost of goods sold                                                                       (511,153)      (445,404)
Selling, distribution and marketing expenses                                             (208,353)      (174,358)
Administration and other expenses                                                         (29,484)       (29,652)
Share of net profits of associates and joint venture partnerships              11          23,280          2,285
                                                                                      -----------    -----------
Profit from ordinary activities before borrowing
costs and income tax expense                                                              144,626        124,248
Borrowing costs                                                                 3         (25,273)       (22,390)
                                                                                      -----------    -----------
PROFIT FROM ORDINARY ACTIVITIES BEFORE INCOME TAX EXPENSE                                 119,353        101,858
Income tax expense                                                              4         (35,191)       (29,699)
                                                                                      -----------    -----------
NET PROFIT                                                                                 84,162         72,159

Net (profit)/loss attributable to outside equity interests                     27             176             53
                                                                                      -----------    -----------

NET PROFIT ATTRIBUTABLE TO MEMBERS OF BRL HARDY LIMITED                                    84,338         72,212
                                                                                      -----------    -----------

Net increase/(decrease) in asset revaluation reserve                           23            (225)         6,678
Net increase/(decrease) in foreign currency translation reserve                23             295            896
                                                                                      -----------    -----------

TOTAL REVENUES, EXPENSES AND VALUATION ADJUSTMENTS ATTRIBUTABLE
TO MEMBERS OF BRL HARDY LIMITED RECOGNISED DIRECTLY IN EQUITY                                  70          7,574
                                                                                      -----------    -----------

TOTAL CHANGES IN EQUITY FROM NON-OWNER TRANSACTIONS                                        84,408         79,786
                                                                                      ===========    ===========


EARNINGS PER SHARE                                                             35           Cents          Cents

Basic earnings per share                                                                     48.2           45.5
Diluted earnings per share                                                                   47.7           44.7


The statements of financial performance are to be read in conjunction with the accompanying notes.

                                                                          Page 1





STATEMENTS OF FINANCIAL POSITION
                                                                                              CONSOLIDATED
                                                                                          2002           2001
AS AT 31 DECEMBER 2002                                                        Notes      $'000          $'000
----------------------                                                       -------  -----------    -----------
                                                                                            
CURRENT ASSETS
Cash assets                                                                     7          43,553         39,665
Receivables                                                                     8         215,271        181,043
Inventories                                                                     9         438,357        328,797
Other                                                                          10          12,109          4,977
                                                                                      -----------    -----------
Total current assets                                                                      709,290        554,482
                                                                                      -----------    -----------

NON-CURRENT ASSETS
Receivables                                                                     8          10,366         44,542
Inventories                                                                     9         119,829        114,273
Investments accounted for using the equity method                              11         233,576        231,498
Other financial assets                                                         12          26,452         26,194
Grape vines                                                                    13          43,676         38,811
Property, plant and equipment                                                  14         434,618        377,008
Intangibles                                                                    15          28,564         28,180
Deferred tax assets                                                            16           8,096          5,752
                                                                                      -----------    -----------
Total non-current assets                                                                  905,177        866,258
                                                                                      -----------    -----------

TOTAL ASSETS                                                                            1,614,467      1,420,740
                                                                                      -----------    -----------

CURRENT LIABILITIES
Payables                                                                       17         140,122        125,883
Interest bearing liabilities                                                   18         143,489        201,762
Current tax liabilities                                                        19           4,007          9,392
Provisions                                                                     21           8,763         26,652
                                                                                      -----------    -----------
Total current liabilities                                                                 296,381        363,689
                                                                                      -----------    -----------

NON-CURRENT LIABILITIES
Payables                                                                       17          10,338         43,617
Interest bearing liabilities                                                   18         463,408        293,530
Deferred tax liabilities                                                       20          59,402         43,673
Provisions                                                                     21           4,060          3,760
                                                                                      -----------    -----------
Total non-current liabilities                                                             537,208        384,580
                                                                                      -----------    -----------

TOTAL LIABILITIES                                                                         833,589        748,269
                                                                                      -----------    -----------


NET ASSETS                                                                                780,878        672,471
                                                                                      ===========    ===========


EQUITY
Contributed equity                                                             22         515,932        474,267
Reserves                                                                       23(a)       17,568         17,412
Retained profits                                                               23(b)      246,322        179,560
                                                                                      -----------    -----------
Total parent entity interest                                                              779,822        671,239

Outside equity interests in controlled entities                                27           1,056          1,232
                                                                                      -----------    -----------
TOTAL EQUITY                                                                              780,878        672,471
                                                                                      ===========    ===========

The  statements of  financial  position  are  to be read in conjunction with  the accompanying notes.

                                                                          Page 2





STATEMENTS OF CASH FLOWS
                                                                                              CONSOLIDATED
                                                                                          2002           2001
FOR THE YEAR ENDED 31 DECEMBER 2002                                           Notes      $'000          $'000
-----------------------------------                                          -------  -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES
                                                                                            
Receipts from customers                                                                   808,228        753,051
Payments to suppliers and employees                                                      (798,617)      (688,545)
                                                                                      -----------    -----------
                                                                                            9,611         64,506
Dividends received                                                                          1,289            864
Interest received                                                                             859            778
Borrowing costs paid                                                                      (29,210)       (24,011)
Income taxes paid                                                                         (27,696)       (20,295)
                                                                                      -----------    -----------
NET CASH FLOW FROM OPERATING ACTIVITIES                                        26         (45,147)        21,842
                                                                                      -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment                                                (85,301)       (85,441)
Payments for investments                                                                     (253)      (223,400)
Proceeds from sale of property, plant and equipment                                         2,470          2,581
                                                                                      -----------    -----------
NET CASH FLOW FROM INVESTING ACTIVITIES                                                   (83,084)      (306,260)
                                                                                      -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of shares                                                              41,613        172,259
Proceeds from borrowings                                                                  125,280        159,566
Payment of dividends                                                                      (36,576)       (29,360)
Payment of finance leases                                                                     (89)          (226)
                                                                                      -----------    -----------
NET CASH FLOW FROM FINANCING ACTIVITIES                                                   130,228        302,239
                                                                                      -----------    -----------

NET INCREASE/(DECREASE) IN CASH HELD                                                        1,997         17,821
Cash at the beginning of the financial year                                                38,087         19,786
Exchange rate adjustments to cash held at the
  beginning of the financial year                                                              74            480
                                                                                      -----------    -----------
CASH AT THE END OF THE FINANCIAL YEAR                                                      40,158         38,087
                                                                                      ===========    ===========

The  statements  of  cash  flows  are  to  be  read  in   conjunction  with  the
accompanying notes.




                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                              Notes      $'000          $'000
                                                                             -------  -----------    -----------

RECONCILIATION OF CASH

Cash at the end of the financial year as
shown in the statements of cash flows is
reconciled to the related items in the
balance sheets as follows:
                                                                                            

Cash                                                                            7          43,553         39,665
(Less) overdraft                                                                           (3,395)        (1,578)
                                                                                      -----------    -----------
                                                                                           40,158         38,087
                                                                                      ===========    ===========

                                                                          Page 3


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 1.  STATEMENT OF ACCOUNTING POLICIES

The  significant  policies  which  have been adopted in the preparation of these
general purpose financial statements are:

BASIS OF PREPARATION

The  financial  statements  of  the  parent  entity,  BRL Hardy Limited, and the
consolidated  financial  statements of the economic entity have been drawn up in
accordance  with  the Corporations Act 2001, Australian Accounting Standards and
other  authoritative pronouncements of the Australian Accounting Standards Board
and Urgent Issues Group Consensus Views. They have been prepared on the basis of
historical costs except where stated.

As  a result of applying the revised Accounting Standard AASB 1018 "Statement of
Financial  Performance",  revised  AASB  1034 "Financial Report Presentation and
Disclosures"  and AASB 1040 "Statement of Financial Position" for the first time
in  the 2001 financial year, a number of comparative amounts were represented or
reclassified to ensure comparability with the current reporting period.

PRINCIPLES OF CONSOLIDATION

The  consolidated  financial statements comprise the financial statements of BRL
Hardy  Limited  and   its  controlled  entities.   Inter-company  balances   and
transactions  have  been eliminated. Where a controlled entity has been acquired
during  the  year, its results are included in consolidated profit from the date
of  acquisition. Where a controlled entity has been disposed of during the year,
its  results  are  excluded  from consolidated profit from the date of disposal.
Outside  equity  interests  in the results and equity of controlled entities are
shown  separately  in  the  consolidated statements of financial performance and
financial position respectively.

Investments  in  associates  are  accounted  for  in  the consolidated financial
statements using the equity method. Under this method, the consolidated entity's
share  of  the profits or losses of associates is recognised in the consolidated
statement  of  financial  performance, and its share of movements in reserves is
recognised  in  consolidated  reserves. Associates are those entities over which
the consolidated entity exercises significant influence, but not control.

INVENTORIES

Inventories  are  stated  at  the  lower  of  cost or net realisable value. Cost
includes  direct  materials,  direct  labour  and  an  appropriate proportion of
variable  and  fixed overhead expense and borrowing costs which are allocated on
the  basis  of normal operating capacity. Costs are assigned to individual items
of inventory mainly on the basis of average costs. Harvested grapes are included
in  inventories  in  the  period of harvest at net market value. Wine and spirit
stocks include both work in process and finished goods.

GRAPE VINES

Grape  vines are valued at net market value. The net market value of grape vines
is  determined  as  the difference between the vineyard values and the values of
the  land and other vineyard improvements thereon. In determining the net market
values,  the directors have made certain assumptions about the yields and market
prices  of  grapes  in  current  and  future  vintages, the costs of running the
vineyards  and  the  quantity and quality of grapes growing on the vines at each
balance  date.  The  values of vineyards are based on the discounted net present
values of expected future cash flows.

                                                                          Page 4


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 1.  STATEMENT OF ACCOUNTING POLICIES (CONTINUED)

DEPRECIATION

Depreciation  of  buildings, plant, machinery and equipment is provided at rates
estimated  to  ensure  that the cost of each item will be charged against profit
over  its  expected  useful  life. Straight line and reducing balance methods of
depreciation are used.  The expected useful lives are as follows:

          Buildings                              33 - 75 years

          Plant  machinery  and  equipment
          - Vineyard improvements                20 - 50 years
          - Stainless steel storage                   33 years
          - Oak barrels                           4 -  5 years
          - Other                                 3 - 20 years

REVENUE

Amounts  disclosed  as  revenue are net of returns, trade allowances, duties and
taxes paid.

INVESTMENTS

Interests  in listed and unlisted securities, other than controlled entities and
associates  in  the consolidated financial statements, are brought to account at
cost.  Dividend  income  is recognised in the statement of financial performance
when receivable.

FOREIGN CURRENCY TRANSLATION

Foreign  currency purchase transactions are translated to Australian currency at
the  rates of exchange ruling at the dates of the transactions. Foreign currency
sales  transactions  are  translated  at  average  exchange  rates for the year.
Amounts receivable and payable in foreign currencies are translated at the rates
of  exchange at balance date, and the resulting exchange differences are brought
to  account  in  determining the profit for the year. The accounts of integrated
controlled  entities  are  translated  using  the  temporal  method and exchange
differences  arising on consolidation are taken to the consolidated statement of
financial  performance.  The accounts of self-sustaining controlled entities are
translated  using  the  current  rate method and exchange differences arising on
translation are taken directly to the foreign currency translation reserve.

DERIVATIVES

Gains  and  losses  on  derivatives used as hedges are accounted for on the same
basis  as  the  underlying  physical  exposures  they  are hedging. Accordingly,
hedging  gains and losses are included in the statement of financial performance
when  the  gains  and  losses  arising  on  the  related  physical exposures are
recognised in the statement of financial performance.

Gains  and  losses  on  interest  rate  futures contracts, swaps and options are
deferred  and recognised in the statement of financial performance over the life
of the underlying hedged borrowing.

Gains and losses on forward foreign exchange contracts and options intended as a
specific  hedge  against  expected  future  transactions  are  deferred  and are
recognised when those transactions occur.

EMPLOYEE ENTITLEMENTS

Liabilities for employees' entitlements to wages, salaries and annual leave  are
accrued on the basis of current wage and salary rates.

Liabilities  for  long  service leave are accrued in respect of all employees at
the  present  values  of  future amounts expected to be paid, after allowing for
projected  increases  in  wage  and  salary rates. Present values are calculated
using  discount rates based on government guaranteed securities with appropriate
terms to maturity.

SUPERANNUATION

Contributions to employee superannuation  funds are charged as an expense on  an
accrual  basis.  In relation to the defined benefits payable under the BRL Hardy
Superannuation Fund, in the event of a shortfall in the net market value of fund
assets  when  compared to members' vested entitlements, the parent entity has an
obligation  to provide for the present value of the shortfall to the extent that
a present obligation exists to rectify the financial position of the fund.

INCOME TAX

Tax  effect accounting procedures are followed whereby the income tax expense in
the  statement  of  financial  performance is matched with the accounting profit
after allowing for permanent differences.

Legislation  reducing  the  company  tax  rate from 36% to 34% in respect of the
2000-2001 income tax year and then to 30% from the 2001-2002 income tax year was
announced  on  21  September  1999. As a consequence, deferred tax balances were
restated at 31 December 2000 using the rate of 30%.

No  future  tax benefit in relation to tax losses is carried forward as an asset
unless the benefit is virtually certain of realisation.

The  tax  benefit  arising from legislation providing accelerated write-offs for
certain  new  vineyard  development  expenditure  has been recognised during the
year.  The  corresponding  deferred tax liability has been brought to account at
present values.
                                                                          Page 5


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 1.  STATEMENT OF ACCOUNTING POLICIES (CONTINUED)

LEASED PLANT AND EQUIPMENT

Finance  leases  are  capitalised with a lease asset and corresponding liability
being  recorded  at  the  inception  of  the lease. Capitalised lease assets are
amortised on a straight line basis over the term of the relevant lease, or where
it  is  likely  the economic entity will obtain ownership of the asset, over the
life of the asset. Lease liabilities are reduced by repayments of principal. The
interest  component  of  the  lease  payments  is  charged  to  the statement of
financial  performance. Payments made under operating leases are charged against
profit as incurred.

GOODWILL

Goodwill, representing the excess of the purchase consideration  plus incidental
expenses over  the fair  value of  the identifiable net assets acquired  arising
upon the acquisition of a business entity, is amortised on a straight line basis
over  the  period  of  time during which benefits are expected to arise, but not
longer than 20 years.

NON-CURRENT ASSETS

Revaluation:
-----------
Land  is  valued at fair market value. Revaluation increments and decrements are
taken directly to the asset revaluation reserve, except that, to the extent that
a  decrement  exceeds  previous  revaluations  carried  in the asset revaluation
reserve,  it  is  recognised  as  an  expense  in  the  statement  of  financial
performance.  Land  revaluations occur with sufficient regularity to ensure that
the  carrying  amount  does  not  materially  differ  from its fair value at the
reporting  date.  Potential  tax  on  capital gains is not taken into account in
determining  revaluation amounts unless there is an intention to sell the assets
concerned.

Recoverable amount:
------------------
The carrying values of non-current assets  are reviewed annually to ensure  they
do  not  exceed  their  recoverable  amount.  Expected  net  cash  flows used in
determining  recoverable  amounts of non-current assets have not been discounted
to their present value.

Vineyard developments:
---------------------
Development  costs  for  new  vineyards,  which include direct materials, direct
labour  and  allocations  of  overhead  and borrowing costs, are capitalised and
recorded  as  capital  work in progress. Capitalisation of costs continues until
the  vineyard  is considered to be in commercial production, ordinarily a period
of three years after the planting of vines.

BRAND NAMES

Only purchased  brand names are included in the accounts.  These are included at
cost.  The  directors  consider  that  these brand names are identifiable assets
which, under  responsible  stewardship, do not ordinarily diminish in value over
time  and their useful lives are indeterminable. Accordingly, no amortisation is
necessary.  Nevertheless, the value of these brand names is reviewed annually to
ensure the directors are satisfied that there is no diminution in value.

CASH

For  the purpose of the statements of cash flows, cash includes deposits at call
which  are  readily  convertible  to  cash  on  hand,  net  of  outstanding bank
overdrafts.

EARNINGS PER SHARE

Basic earnings per share:

Basic  earnings  per share is determined by dividing the net profit attributable
to members  of  BRL  Hardy  Limited  by the weighted average  number of ordinary
shares outstanding during the financial year.

Diluted earnings per share:

Diluted  earnings  per  share  adjusts  the figures used in the determination of
basic  earnings  per  share  by  taking  into account amounts unpaid on ordinary
shares  and  any effect on earnings per share that would arise from the exercise
of outstanding options and entitlements to additional shares.

JOINT VENTURES

The proportion of assets, liabilities and expenses attributable to the interests
of  BRL  Hardy  Limited in joint venture operations has been incorporated in the
parent  entity  financial  statements.  Interests  in joint venture entities are
included in the consolidated financial report by applying the equity method.

                                                                          Page 6


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 1.  STATEMENT OF ACCOUNTING POLICIES (CONTINUED)

TRADE DEBTORS

Trade  debtors   are  recognised  as   amounts  receivable  as  at   settlement.
Collectability of trade debtors is reviewed on an ongoing basis. Debts which are
known  to  be  uncollectable  are written off. A provision for doubtful debts is
raised where some doubt as to collection exists.

TRADE AND OTHER CREDITORS

Trade  and other creditors represent liabilities for goods and services provided
to  the  economic  entity  prior  to the end of the financial year and which are
unpaid.

BORROWING COSTS

Borrowing  costs  attributable  to  assets  that  necessarily take a substantial
period  of  time  to get ready for intended use or sale are capitalised into the
value  of  the  assets.  The  amounts  capitalised  into  qualifying  assets are
disclosed  in Note 3 using a weighted average interest rate of 6.1% for the 2002
financial year (2001: 6.1%).

INTEREST BEARING LIABILITIES

Interest bearing  liabilities are  carried  at  their  principal  amounts  which
represent  the  present value of future cash flows associated with servicing the
debt. Interest is accrued over the period it becomes due and is recorded as part
of other creditors.

DIVIDENDS

Dividends  are  only  provided  for when the amount of the dividend is declared,
determined or publicly recommended by the directors.

ROUNDING OF AMOUNTS

The  company  is  of  a  kind  referred  to in Class Order 98/0100 issued by the
Australian  Securities  &  Investments  Commission  relating  to  "rounding off"
amounts  in  the  financial  report.  Amounts  in the financial report have been
rounded off in accordance with that Class Order to the nearest thousand dollars,
or in certain cases, to the nearest dollar.

COMPARATIVE INFORMATION

Where necessary, comparative  information has been  reclassified  to  facilitate
comparisons.
                                                                          Page 7


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 2.  REVENUE



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
REVENUE FROM OPERATING ACTIVITIES
Sales revenue                                                                             854,142        757,608
                                                                                      -----------    -----------

OTHER REVENUE
Interest                                                                                      859            778
Dividends                                                                                   1,113            864
Proceeds from sale of property, plant and equipment                                         2,184          2,581
Exchange gains                                                                              1,875          2,162
Self-generating and regenerating assets                                                     3,288          3,908
Functions                                                                                   2,220          1,716
Sundry                                                                                      4,655          1,760
                                                                                      -----------    -----------
                                                                                           16,194         13,769
                                                                                      ===========    ===========


NOTE 3.  OPERATING PROFIT



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
Operating profit been determined after:
                                                                                               
CHARGING AS EXPENSE

Borrowing costs attributable to:
  - Other persons                                                                          30,457         25,096
  - Interest paid on capitalised leases                                                         2              7
                                                                                      -----------    -----------
                                                                                           30,459         25,103
                                                                                      -----------    -----------

Less:  Interest capitalised - developing vineyards                                          1,267            701
Less:  Interest capitalised - inventory                                                     3,919          2,012
                                                                                      -----------    -----------
                                                                                            5,186          2,713
                                                                                      -----------    -----------

Borrowing costs                                                                            25,273         22,390
                                                                                      ===========    ===========

Depreciation of:
  - Buildings                                                                               2,394          2,011
  - Plant and equipment                                                                    24,053         21,214
Amortisation of leased assets                                                                  50            188
Provisions:
  - Employee entitlements                                                                  13,020         10,637
  - Net bad and doubtful debts                                                                845            637
Amortisation of goodwill                                                                      708            638
Write down of inventory to net realisable value                                             6,685          6,139
Rental expense on operating leases                                                          8,950          8,342
Exchange losses                                                                              -                38
Loss on sale of non-current assets:
  - Property, plant and equipment                                                             580            300

CREDITING AS INCOME

Profit on sale of non-current assets:
  - Property, plant and equipment                                                             453            288
                                                                                      ===========    ===========


                                                                          Page 8


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 4.  INCOME TAX



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
INCOME TAX EXPENSE
                                                                                               
Profit from ordinary activities before income tax expense                                 119,353        101,858
                                                                                      ===========    ===========
Prima facie income tax expense on operating profit
  - calculated at the Australian rate of 30%                                               35,806         30,557
                                                                                      -----------    -----------
Increase in income tax expense due to:
  - Depreciation                                                                              645            502
  - Tax losses not taken up                                                                   532            118
  - Non deductible entertainment                                                              401            322
  - Higher tax rates in overseas jurisdictions                                              2,231            144
  - Other items                                                                               697            996
                                                                                      -----------    -----------
                                                                                            4,506          2,082
                                                                                      -----------    -----------
Decrease in income tax expense due to:
  - Tax exempt dividend income                                                               -               286
  - Imputation credits received                                                               546           -
  - Property, plant and equipment allowances                                                  933            977
  - Uniform capital allowance                                                                 218           -
  - Other items                                                                             2,458          1,234
                                                                                      -----------    -----------
                                                                                            4,155          2,497
                                                                                      -----------    -----------
Add/(less):
  - Adjustment to prior year provisions                                                      (966)          (443)
                                                                                      -----------    -----------

Income tax expense                                                                         35,191         29,699
                                                                                      ===========    ===========

$1.1m of the future income tax  benefit shown in  Note 16 is attributable to tax
losses.  This benefit for tax losses will only be obtained if:
(i)   the consolidated entity  derives future assessable income of a  nature and
      an amount sufficient  to enable the  benefit  from the  deductions for the
      losses to be realised; or
(ii)  the  losses are  transferred  to an  eligible entity  in the  consolidated
      entity;
(iii) the  consolidated  entity  continues  to comply  with  the conditions  for
      deductibility imposed by tax legislation; and
(iv)  no  changes in tax  legislation  adversely  affect the consolidated entity
      in realising the benefit from the deductions for the losses.


NOTE 5.  DIVIDENDS



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
DIVIDENDS PROVIDED FOR OR PAID
                                                                                               
BRL Hardy Limited
Interim dividend paid - fully franked                                                      17,539         14,039
Final dividend provided - fully franked                           (Note 21)                  -            19,000
Dividends underprovided/(overprovided)                                                         37             (9)
                                                                                      -----------    -----------
TOTAL DIVIDENDS PROVIDED FOR OR PAID                                                       17,576         33,030
                                                                                      ===========    ===========


NOTE 6.  DIVIDEND FRANKING ACCOUNT

From  1  July  2002  the  New Business Tax System (Imputation)
Act 2002 requires measurement of franking credits based on the
amount of income tax paid, rather than on  after tax  profits.
This change in the  basis of  measurement does  not change the
value of franking credits to shareholders  who may be entitled
to franking credit benefits.



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------


                                                                                               
Class C franking account (30%)                                                             20,243         14,940
                                                                                      ===========    ===========

                                                                          Page 9


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 7.  CASH ASSETS



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
Cash at bank and on hand                                                                   43,553         39,665
                                                                                      ===========    ===========


NOTE 8.  RECEIVABLES



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
CURRENT
Trade debtors                                                                             180,450        143,396
(Less): provision for doubtful debts                                                       (3,336)        (2,591)
Other debtors                                                                              26,523         17,447
Deferred foreign exchange losses                                                           11,634         22,791
                                                                                      -----------    -----------
                                                                                          215,271        181,043
                                                                                      ===========    ===========

NON-CURRENT
Deferred foreign exchange losses                                                            9,495         43,617
Loans to other entities                                                                       871            925
                                                                                      -----------    -----------
                                                                                           10,366         44,542
                                                                                      -----------    -----------

TOTAL RECEIVABLES                                                                         225,637        225,585
                                                                                      ===========    ===========


NOTE 9.  INVENTORIES



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
CURRENT
Raw materials and stores                                                                   12,778         11,125
Wine and spirit stocks                                                                    419,718        314,667
Borrowing expenses capitalised                                                              5,861          3,005
                                                                                      -----------    -----------
                                                                                          438,357        328,797
                                                                                      ===========    ===========

NON-CURRENT
Wine and spirit stocks                                                                    111,448        106,955
Borrowing expenses capitalised                                                              8,381          7,318
                                                                                      -----------    -----------
                                                                                          119,829        114,273
                                                                                      -----------    -----------

TOTAL INVENTORIES                                                                         558,186        443,070
                                                                                      ===========    ===========


NOTE 10.  OTHER CURRENT ASSETS



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
PREPAYMENTS                                                                                12,109          4,977
                                                                                      ===========    ===========

                                                                         Page 10


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 11.  INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
SUMMARIES OF INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
                                                                                               
Summary of carrying value of equity accounted investments:
Carrying value of investments in associated entities                                        8,938          8,826
Carrying value of investment in joint venture partnerships                                224,638        222,672
                                                                                      -----------    -----------
Total carrying value of equity accounted investments                                      233,576        231,498
                                                                                      ===========    ===========

Summary of results attributable to equity accounted investments:
Operating profit in associates after income tax                                               287            487
Operating profit in joint venture partnerships before income tax                           22,993          1,798
                                                                                      -----------    -----------
Share of net profits of associates and joint venture partnerships                          23,280          2,285
                                                                                      ===========    ===========

INVESTMENTS IN ASSOCIATED ENTITIES

Name of entity:                     Principal activity:   Ownership interest:
--------------                      ------------------    ------------------
Barossa Valley Estate Ltd.          Wine manufacturers           50%                        4,869          5,125
Brookland Valley Estate Pty. Ltd.   Wine manufacturers           50%                        3,527          3,206
Churchill Cellars Ltd.              Wine marketers               20%                          468            436
Medallion Wine Marketing Inc.       Wine marketers               25% (2001: 18%)               74             59
                                                                                      -----------    -----------
TOTAL INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD                       8,938          8,826
                                                                                      ===========    ===========

MOVEMENT IN CARRYING AMOUNT OF INVESTMENT IN ASSOCIATED ENTITIES

Carrying amount of investments at beginning of the financial year                           8,826          5,993
Add/(less):
  - Share of operating profit after income tax                                                287            487
  - Share of dividend                                                                        (175)           (90)
  - Acquisition of ownership interest                                                        -             2,436
                                                                                      -----------    -----------
Carrying amount of investments at the end of the financial year                             8,938          8,826
                                                                                      ===========    ===========

SHARE OF RESULTS ATTRIBUTABLE TO ASSOCIATED ENTITIES

Operating profit before income tax                                                            408            693
Income tax expense                                                                           (121)          (206)
                                                                                      -----------    -----------
Operating profit after income tax                                                             287            487
                                                                                      ===========    ===========

SHARE OF RESERVES ATTRIBUTABLE TO ASSOCIATED ENTITIES

Retained profits at the beginning of the financial year                                       767            280
Current year operating profit after income tax                                                287            487
                                                                                      -----------    -----------
Retained profits at the end of the financial year                                           1,054            767
                                                                                      ===========    ===========
The voting power  in each associate is  equal to the  proportion of shares held.
There are no significant accounting policy dissimilarities.

                                                                         Page 11


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 11.  INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (CONTINUED)




                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------

INVESTMENTS IN JOINT VENTURE PARTNERSHIPS
                                                                                               
Name of entity:             Principal activity:               Ownership interest:
--------------              ------------------                ------------------
Pacific Wine Partners, LLC  Wine manufacturers and marketers          50%                 224,638        222,672
                                                                                      ===========    ===========

MOVEMENT IN CARRYING AMOUNT OF INVESTMENTS IN JOINT VENTURE PARTNERSHIPS

Carrying amount of investments at beginning of the financial year                         222,672           -
Add/(less):
  - Share of operating profit before income tax                                            22,993          1,798
  - Revaluation of investment at period end foreign exchange rate                         (21,027)          -
  - Acquisition of ownership interest                                                        -           220,874
                                                                                      -----------    -----------
Carrying amount of investments at the end of the financial year                           224,638        222,672
                                                                                      ===========    ===========

SHARE OF JOINT VENTURE PARTNERSHIP'S REVENUES, EXPENSES AND RESULTS

Revenues                                                                                  103,681         29,507
Expenses                                                                                  (80,688)       (27,709)
                                                                                      -----------    -----------
Operating profit before income tax                                                         22,993          1,798
                                                                                      ===========    ===========

BRL Hardy (USA) Inc., a 100% owned subsidiary within the
consolidated entity and the direct investor  in  Pacific
Wine   Partners,  LLC   is  liable  for   50%   of   the
partnership's tax liability. As a consequence, the share
of operating profit is disclosed only as  before  income
tax.   Applicable income tax is included in consolidated
income tax expense.

SHARE OF RESERVES ATTRIBUTABLE TO JOINT VENTURE PARTNERSHIPS

Retained profits at the beginning of the financial year                                     1,798           -
Current year operating profit before income tax                                            22,993          1,798
                                                                                      -----------    -----------
Retained profits at the end of the financial year                                          24,791          1,798
                                                                                      ===========    ===========

The income tax attributable to the current year share of
operating profit included within the consolidated income
tax expense is $9.1 million (2001: $0.8 million).

SHARE OF JOINT VENTURE PARTNERSHIP'S ASSETS AND LIABILITIES

Total assets                                                                              252,531        248,729
Total liabilities                                                                          27,893         26,057
                                                                                      -----------    -----------
Net assets                                                                                224,638        222,672
                                                                                      ===========    ===========


The voting power in the joint venture partnership is equal to the proportion of
shares held.

NOTE 12.  OTHER FINANCIAL ASSETS



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
NON-TRADED INVESTMENTS - AT COST
                                                                                               
Shares in other corporations                                                               26,452         26,194
                                                                                      -----------    -----------
Total other investments                                                                    26,452         26,194
                                                                                      ===========    ===========


Shares in other corporations include the  parent entity's  non-voting preference
shares in  GSI Holdings Pty Ltd, trading  as  GS Millenium Fund,  which  is  the
holder of 10,384,366 units in the International Wine Investment Fund.

NOTE 13.  GRAPE VINES



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
Net market value of grape vines and fruit on vine
                                                                                           43,676         38,811
                                                                                      ===========    ===========


BRL  Hardy  has,  for  self-generating   and   regenerating   assets   purposes,
approximately 2,107 hectares (2001: 1,927) of bearing grape vines located in the
principal  wine producing regions of Australia, and also has vineyards in France
and New Zealand totalling approximately 211 hectares (2001: 221).

                                                                         Page 12


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 14.  PROPERTY, PLANT AND EQUIPMENT



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
Freehold land
-------------
                                                                                               
At independent valuation, 2001                                                             59,240         57,652
At cost                                                                                     6,007           -
                                                                                      -----------    -----------
Total freehold land                                                                        65,247         57,652
                                                                                      -----------    -----------

Buildings
---------

At cost                                                                                   111,742         94,195
(Less): accumulated depreciation                                                          (11,086)        (8,626)
Capital work in progress                                                                    9,133          8,644
                                                                                      -----------    -----------
Total buildings                                                                           109,789         94,213
                                                                                      -----------    -----------

Plant, equipment and motor vehicles
-----------------------------------

At cost                                                                                   337,687        264,294
(Less): accumulated depreciation                                                         (104,481)       (84,209)
Capital work in progress                                                                   25,731         44,391
Borrowing expenses capitalised in work in progress                                            645            667
                                                                                      -----------    -----------
Total plant, equipment and motor vehicles                                                 259,582        225,143
                                                                                      -----------    -----------

Total property, plant and equipment                                                       434,618        377,008
                                                                                      ===========    ===========


RECONCILIATIONS

Reconciliations  of  the  carrying  amount  of each class of property, plant and
equipment  at  the  beginning  and end of the current financial year are set out
below:




                                                                                          PLANT,
                                                             FREEHOLD                 EQUIPMENT AND
                                                               LAND       BUILDINGS   MOTOR VEHICLES     TOTAL
                                                              $'000         $'000         $'000          $'000
                                                           -----------   -----------  --------------   ---------
                                                                                           
CONSOLIDATED - 2002
Carrying amount at the beginning of the financial year          57,652        94,213         225,143     377,008
Reclassification                                                    23            (2)            (21)       -
Additions                                                        5,926        17,847          58,927      82,700
Disposals                                                         -             (371)         (1,954)     (2,325)
Depreciation/amortisation expense                                 -           (2,397)        (24,100)    (26,497)
Foreign currency exchange differences                             1,646           499           1,587      3,732
                                                           -----------   -----------  --------------   ---------
Carrying amount at the end of the financial year                65,247       109,789         259,582     434,618
                                                           ===========   ===========  ==============   =========

CONSOLIDATED - 2001
Carrying amount at the beginning of the financial year          39,128        78,878         193,225     311,231
Transfer to grape vines                                           -             -             (2,287)     (2,287)
Reclassification                                                   245            73            (318)       -
Additions                                                       12,327        17,072          57,991      87,390
Disposals                                                         -              (29)         (2,699)     (2,728)
Revaluation increments                                           5,797          -               -          5,797
Depreciation/amortisation expense                                 -           (1,991)        (21,422)    (23,413)
Foreign currency exchange differences                              155           210             653       1,018
                                                           -----------   -----------  --------------   ---------
Carrying amount at the end of the financial year                57,652        94,213         225,143     377,008
                                                           ===========   ===========  ==============   =========


VALUATIONS OF LAND

The  basis of the valuations of land at 31 December 2001 is fair value, based on
independent valuations.
                                                                         Page 13


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 15.  INTANGIBLES




                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
GOODWILL
                                                                                               
Goodwill                                                                                   13,034         12,999
(Less): accumulated amortisation                                                           (3,503)        (2,788)
                                                                                      -----------    -----------
                                                                                            9,531         10,211
                                                                                      -----------    -----------

BRAND NAMES

Brand names at cost                                                                        19,033         17,969
                                                                                      -----------    -----------

TOTAL INTANGIBLES                                                                          28,564         28,180
                                                                                      ===========    ===========


NOTE 16.  DEFERRED TAX ASSETS



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
Future income tax benefit                                                                   8,096          5,752
                                                                                      ===========    ===========


NOTE 17.  PAYABLES



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
CURRENT
Trade creditors                                                                            54,250         46,911
Other creditors                                                                            74,238         56,181
Deferred foreign exchange hedge payable                                                    11,634         22,791
                                                                                      -----------    -----------
                                                                                          140,122        125,883
                                                                                      -----------    -----------

NON-CURRENT
Deferred foreign exchange hedge payable                                                    10,338         43,617
                                                                                      -----------    -----------
                                                                                           10,338         43,617
                                                                                      -----------    -----------

TOTAL PAYABLES                                                                            150,460        169,500
                                                                                      ===========    ===========

                                                                         Page 14


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 18.  INTEREST BEARING LIABILITIES



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
CURRENT
Secured:
-------
Commercial bills                                                                              557           -
Bank advances                                                                                  94           -
Loans from other entities                                                                   1,811           -
                                                                                      ------------   -----------
                                                                                            2,462           -
                                                                                      -----------    -----------

Unsecured:
---------
Commercial bills                                                                           96,443         17,042
Bank advances                                                                              38,415        177,943
Lease liabilities                                             (Note 30)                      -                56
Loans from other entities                                                                   6,169          6,721
                                                                                      -----------    -----------
                                                                                          141,027        201,762
                                                                                      -----------    -----------
                                                                                          143,489        201,762
                                                                                      ===========    ===========

NON-CURRENT
Unsecured:
---------
Commercial bills                                                                          447,824        285,000
Bank advances                                                                              15,584          8,530
                                                                                      -----------    -----------
                                                                                          463,408        293,530
                                                                                      ===========    ===========

TOTAL INTEREST BEARING LIABILITIES                                                        606,897        495,292
                                                                                      ===========    ===========

FINANCING ARRANGEMENTS

Access was available at balance date to the following lines of credit:

Total facilities:
----------------
Bank advances                                                                              62,456        217,916
Other bank facilities                                                                     730,374        432,942
                                                                                      -----------    -----------
                                                                                          792,830        650,858
                                                                                      -----------    -----------

Used at balance date:
--------------------
Bank advances                                                                              44,501        186,473
Other bank facilities                                                                     586,461        331,561
                                                                                      -----------    -----------
                                                                                          630,962        518,034
                                                                                      -----------    -----------

Unused at balance date:
----------------------
Bank advances                                                                              17,955         31,443
Other bank facilities                                                                     143,913        101,381
                                                                                      -----------    -----------
                                                                                          161,868        132,824
                                                                                      -----------    -----------

The bank facilities may  be drawn at any time on  appropriate notice, subject  to
meeting the facility  contract conditions  and undertakings, and have  maturities
up to 8 years (2001:9).

Interest rates on facilities are variable (refer Note 36).


SECURITY FOR BORROWINGS

Bank advances to joint venture entities are secured  by way of  first  charge or
mortgage over certain assets of those entities.
                                                                         Page 15


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------


NOTE 19.  CURRENT TAX LIABILITIES



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
Provision for income tax                                                                    4,007          9,392
                                                                                      ===========    ===========


NOTE 20.  DEFERRED TAX LIABILITIES



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
Provision for deferred income tax                                                          59,402         43,673
                                                                                      ===========    ===========


NOTE 21.  PROVISIONS



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
CURRENT
Employee entitlements                                                                       8,763          7,652
Dividend                                                          (Note 5)                   -            19,000
                                                                                      -----------    -----------
                                                                                            8,763         26,652
                                                                                      -----------    -----------

NON-CURRENT
Employee entitlements                                                                       4,060          3,760
                                                                                      -----------    -----------

TOTAL PROVISIONS                                                                           12,823         30,412
                                                                                      ===========    ===========

AGGREGATE EMPLOYEE ENTITLEMENTS

Current employee entitlements                                                               8,763          7,652
Non-current employee entitlements                                                           4,060          3,760
                                                                                      -----------    -----------
                                                                                           12,823         11,412
                                                                                      -----------    -----------

EMPLOYEE NUMBERS

Full time equivalent employees as at the
  end of the financial year                                                                 1,871          1,716
                                                                                      ===========    ===========

                                                                         Page 16


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 22.  SHARE CAPITAL - BRL HARDY LIMITED



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
(a)  PAID UP CAPITAL

Ordinary shares fully paid                                                                515,932        474,267
                                                                                      ===========    ===========





Movements in issued and paid up ordinary
  share capital during the past three years
  were as follows:
                                                                                       NUMBER       ISSUE PRICE
                                                                                     OF SHARES                $       $'000
                                                                                     -----------    -----------    -----------
                                                                                                    
BALANCE AT 31 DECEMBER 2000                                                          152,637,933                       302,008
20 April 2001                 Dividend reinvestment plan issues   (Note 22(a)(i))      1,666,768    $      9.19         15,323
1 January 2001 to
  31 December 2001            Option plan issues                  (Note 22(b)(i))        469,900    $      2.80          1,316
                                                                  (Note 22(b)(ii))       571,300    $      3.72          2,125
                                                                  (Note 22(b)(iii))      546,200    $      5.11          2,791
                                                                  (Note 22(b)(iv))        68,500    $      6.61            453
                                                                  (Note 22(b)(v))         11,100    $      7.45             83
                                                                  (Note 22(b)(ix))       117,510    $      3.40            399
                                                                  (Note 22(b)(x))         23,400    $      9.30            218
                              Consideration for options                                                                      2
16 October 2001               Dividend reinvestment plan issues   (Note 22(a)(i))        851,357    $      9.63          8,199
23 October 2001               Rights issue (net of $3.5m costs)   (Note 22(a)(ii))    15,579,278    $      9.30        141,350
                                                                                     -----------                   -----------
BALANCE AT 31 DECEMBER 2001                                                          172,543,246                       474,267
8 April 2002                  Dividend reinvestment plan issues   (Note 22(a)(i))      1,813,495    $     10.51         19,036
1 January 2002 to
  31 December 2002            Option plan issues                  (Note 22(b)(ii))       566,900    $      3.72          2,109
                                                                  (Note 22(b)(iii))      246,700    $      5.11          1,261
                                                                  (Note 22(b)(iv))       137,500    $      6.61            909
                                                                  (Note 22(b)(v))         16,800    $      7.45            125
                                                                  (Note 22(b)(ix))        55,770    $      3.40            190
                                                                  (Note 22(b)(x))         49,100    $      9.30            456
                                                                  (Note 22(b)(x))          4,207    $      9.30             39
                              Consideration for options                                                                      1
8 October 2002                Dividend reinvestment plan issues   (Note 22(a)(i))      2,286,844    $      7.68         17,539
                                                                                     -----------                   -----------
BALANCE AT 31 DECEMBER 2002                                                          177,720,562                       515,932
                                                                                     ===========                   ===========

(i)  Dividend reinvestment plan:
The  company has a dividend reinvestment plan (DRP) under which holders of fully
paid  ordinary  shares  may  elect  to  have  all  or  part  of  their  dividend
entitlements satisfied by the issue of new ordinary shares in lieu of payment in
cash.  Shares  are  issued  under  the  DRP  at a discount (currently 5%) to the
market  price.  The company appointed Deutsche Bank AG as underwriter of the DRP
for  the  dividends  paid  in  2002 so that any dividends not taken up as shares
under  the  DRP  were  taken  up  by the underwriter or its nominees at the same
price.  The interim dividend declared in September 2001 was not underwritten.

(ii)  Rights issue:
The company  made a renounceable rights issue to shareholders in  September 2001
on  a  one for 10 basis at an issue price of $9.30 per new share.  The issue was
underwritten by  Deutsche Bank AG and the allotment of new shares was made on 23
October  2001.  In March 2002, the company issued a small number of rights issue
shares to overseas shareholders whose acceptances had been received in 2002.

                                                                         Page 17


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 22.  SHARE CAPITAL - BRL HARDY LIMITED (CONTINUED)

(b)  THE BRL HARDY OPTION PLAN (OPTION PLAN)

Participation  in  the  company's  option  plan  is  offered  to  all  permanent
employees,  ordinarily on an annual basis.  Options issued under the option plan
are  over  unissued  ordinary shares and expire 59 months (for options issued in
2000  or earlier) and 60 months (for options issued in 2001 and later) after the
issue  date.  Options  may  not be exercised earlier than 36 months after issue,
unless  the employee's employment ceases sooner, provided that any preconditions
to their exercise have also been met.

(i)  2 June 2001 ($2.80) options:
During  2001,  469,900  ordinary  shares were issued at $2.80 on the exercise of
options  granted  in July 1996 under the option plan.  All preconditions for the
exercise  of these options had been met.  At 31 December 2000 there were 484,400
unissued  ordinary shares remaining under these options.  The options expired on
2 June 2001.  There were 14,500 unexercised options that expired under the rules
of the option plan on the expiry date.

(ii)  22 July 2002 ($3.72) options:
During 2002, 566,900 (2001: 571,300) ordinary shares were issued at $3.72 on the
exercise  of  options  granted  on  22  August  1997 under the option plan.  All
preconditions  for  the  exercise of these options had been met.  At 31 December
2001,  there  were  575,900 (2000: 1,147,200) unissued ordinary shares remaining
under  these  options.  The  options  expired on 22 July 2002.  There were 9,000
unexercised  options  that  expired  under  the  rules of the option plan on the
expiry date.

(iii)  28 July 2003 ($5.11) options:
During 2002, 246,700 (2001: 546,200) ordinary shares were issued at $5.11 on the
exercise  of  options  granted  on  28  August  1998 under the option plan.  All
preconditions  for  the exercise of these options have been met.  At 31 December
2002,  there  were  992,600 (2001: 1,239,300) unissued ordinary shares remaining
under these options.  The options expire on 28 July 2003.

(iv)  27 July 2004 ($6.61) options:
During  2002, 137,500 (2001: 68,500) ordinary shares were issued at $6.61 on the
exercise  of  options  granted  on  27  August  1999 under the option plan.  All
preconditions  for  the exercise of these options have been met.  At 31 December
2002,  there were 2,822,500 (2001: 2,960,000) unissued ordinary shares remaining
under these options.  The options expire on 27 July 2004.

(v)  24 October 2005 ($7.45) options:
On  24  November  2000,  the  company issued 2,315,500 options to 1,148 eligible
employees  and/or  associates  under  the  option  plan.  These included 196,000
options issued to executive directors or their associates as approved by special
resolution at the Annual General Meeting of the company held on 4 May 2000.

During 2002, 16,800 (2001: 11,100) ordinary shares were issued  at $7.45 on  the
early  exercise  (refer  Note  22(b)(ix)) of options granted on 24 November 2000
under  the  option  plan.  These  options  will not become otherwise exercisable
until  24 November 2003, but all other preconditions to their exercise have been
met.  At  31  December  2002,  there  were  2,287,600 (2001: 2,304,400) unissued
ordinary shares remaining under these options.  The options expire on 24 October
2005.

(vi)  8 November 2006 ($10.13) options:
On  9  November 2001 and 7 December 2001 the company issued 2,545,300 options to
1,376  eligible employees and/or associates under the option plan.  In addition,
a  further  7,050  options  were  issued  in February and April 2002.  The total
options  issued  (2,552,350)  included  260,000  options  issued  to   executive
directors  or  their  associates as approved by special resolution at the Annual
General  Meeting  of  the  company  held  on  3  May 2001.  These options may be
exercised  after  9  November  2004  at  an exercise price of $10.13.  All other
preconditions  to their exercise have been met.  At 31 December 2002, there were
2,552,350  (2001:  2,545,300)  unissued  ordinary  shares  remaining under these
options.  The options expire on 8 November 2006.

(vii)  23 September 2007 ($8.08) options:
On  24  September  2002  the  company issued 2,913,000 options to 1,529 eligible
employees  and/or  associates  under  the  option  plan.  These included 280,000
options  issued  to  executive  directors  or  their  associates  as approved by
resolution at the Annual General Meeting of the company held on 2 May 2002.  The
options  may  be exercised after 24 September 2005 at an exercise price of $8.08
per  share.  At  31 December 2002, there were 2,913,000 unissued ordinary shares
remaining under these options.  The options expire on 23 September 2007.

(viii)  Early exercise:
Where  the  exercise  period  for  an  option  has  not  commenced and all other
preconditions  for  exercise have been met but the employee's employment ceases,
the  options  may  then be exercised at any time before the expiry date, even if
the  date of exercise might be earlier than otherwise permitted under the option
plan.

(ix)  Additional shares ($3.40):
During  2002,  55,770  (2001: 117,510) additional ordinary shares were issued at
$3.40  in  connection  with  the  exercise  of  options.  Under the option plan,
optionholders  were  entitled  to apply for additional shares as a result of the
rights  issue  in  1997.  The  entitlement  was  for one additional share at the
rights  issue  price of $3.40 per share for every 10 options held at the time of
the  rights issue.  The additional shares could only be taken up when exercising
options  and  lapsed  if  not  taken up.  During 2002, the entitlements to 1,820
(2001:  1,560)  additional  shares  lapsed.  At  31 December 2002, there were no
further entitlements to unissued additional shares at $3.40.

                                                                         Page 18


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 22.  SHARE CAPITAL - BRL HARDY LIMITED (CONTINUED)

(b)  THE BRL HARDY OPTION PLAN (CONTINUED)

(x)  Additional shares ($9.30):
During  2002,  49,100  (2001:  23,400) additional ordinary shares were issued at
$9.30  in  connection  with  the  exercise  of  options.  Under the option plan,
optionholders  are  entitled  to  apply for additional shares as a result of the
rights issue in 2001.  The entitlement is for one additional share at the rights
issue  price  of  $9.30  per  share for every 10 options held at the time of the
rights  issue.  The  additional  shares  can  only  be  taken up when exercising
options  and  lapse  if  not  taken up.  During 2002, the entitlements to 57,250
(2001:  8,500)  additional  shares  lapsed.  At  31 December 2002, the number of
unissued additional shares at $9.30 was 610,270 (2001: 716,620).

(c)  THE NON-EXECUTIVE DIRECTORS' OPTION PLAN ('NED PLAN')

(i)  23 September 2007 ($8.08) options:
On  24  September  2002  the company issued options under the NED Plan which was
approved  by  shareholders  at the Annual General Meeting on 2 May 2002.  Except
for M.R. Davison, who elected to forfeit the options, the option price of $0.937
has  been paid to the company by all non-executive directors who participated in
the  NED  Plan.  The  options  may  be  exercised  from  24 September 2002 at an
exercise  price  of  $8.08  per  share.  At  31 December 2002, there were 92,818
unissued  ordinary  shares remaining under these options.  The options expire on
23 September 2007.


NOTE 23.  RESERVES AND RETAINED PROFITS



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
(a)  RESERVES
                                                                                               
Asset revaluation reserve                                                                  16,595         16,820
General reserve                                                                               101             15
Foreign currency translation reserve                                                          872            577
                                                                                      -----------    -----------
                                                                                           17,568         17,412
                                                                                      ===========    ===========

MOVEMENTS

Asset revaluation reserve:
-------------------------
Balance at the beginning of the financial year                                             16,820         10,142
Add/(less):
  2001 revaluation                                                                           -             6,678
  Amendment to prior valuation                                                               (225)          -
                                                                                      -----------    -----------
Balance at the end of the financial year                                                   16,595         16,820
                                                                                      -----------    -----------

General reserve:
---------------
Balance at the beginning of the financial year                                                 15             17
Add/(less):
  Share option consideration                                                                   87           -
  Transfer to paid up capital on issue of shares                                               (1)            (2)
                                                                                      -----------    -----------
Balance at the end of the financial year                                                      101             15
                                                                                      -----------    -----------

Foreign currency translation reserve:
------------------------------------
Balance at the beginning of the financial year                                                577           (319)
Current year movement                                                                         295            896
                                                                                      -----------    -----------
Balance at the end of the financial year                                                      872            577
                                                                                      -----------    -----------

(b)  RETAINED PROFITS

Retained profits at the beginning of the financial year                                   179,560        140,378

Net profit attributable to members of BRL Hardy Limited                                    84,338         72,212


Dividends provided for or paid                                    (Note 5)                (17,576)       (33,030)
                                                                                      -----------    -----------
Retained profits at the end of the financial year                                         246,322        179,560
                                                                                      ===========    ===========

                                                                         Page 19


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 24.  REMUNERATION OF DIRECTORS AND EXECUTIVES



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                       ----------     ----------
DIRECTORS

The number of directors, including executive
directors, who  received  or  in  respect of
whom  income is due and receivable from  the
parent  entity or  its  controlled  entities
including  retirement benefits  not required
to be approved in general meeting within the
following bands is:

                                                                                             
                                                $80,000  -     $89,999                          3              3
                                               $100,000  -    $109,999                          -              1
                                               $110,000  -    $119,999                          1              -
                                               $130,000  -    $139,999                          1              -
                                               $150,000  -    $159,999                          -              1
                                               $170,000  -    $179,999                          1              -
                                               $180,000  -    $189,999                          -              1
                                               $580,000  -    $589,999                          -              1
                                               $590,000  -    $599,999                          1              -
                                               $610,000  -    $619,999                          1              -
                                               $630,000  -    $639,999                          -              1
                                             $1,210,000  -  $1,219,999                          -              1
                                             $1,330,000  -  $1,339,999                          1              -

                                                                                                $              $
Total income received or due and receivable
by  the  directors  of  the  parent  entity
from the parent entity  and its  controlled
entities:                                                                               3,223,944      3,137,418
                                                                                       ----------     ----------


Benefits  received  by  directors  on  the  grant of options under the BRL Hardy
Option  Plan  as  valued under Division 13A of the Income Tax Assessment Act are
included  above. Information about options granted to and exercised by executive
directors during the period January 2001 to December 2002 is set out in Note 32.
Motor  vehicles and wine allowances are included at their salary package values.
Options  issued to non-executive directors during the year are not included as a
benefit  since  the Option Price paid is equal to the market value of an Option.

                                                                         Page 20


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 24.  REMUNERATION OF DIRECTORS AND EXECUTIVES (CONTINUED)



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                       ----------     ----------
EXECUTIVES

The  number of  executive  officers,  excluding
executive  directors,  who   received   or   in
respect of whom income  is due and  receivable,
including  retirement  benefits,  which  equals
or  exceeds  $100,000  from the  parent  entity
and controlled  entities, within  the following
bands is:
                                                                                              
                                                             $100,000 - $109,999                9             10
                                                             $110,000 - $119,999               12             13
                                                             $120,000 - $129,999                5              6
                                                             $130,000 - $139,999                5              1
                                                             $140,000 - $149,999                3              2
                                                             $150,000 - $159,999                1              -
                                                             $160,000 - $169,999                1              3
                                                             $170,000 - $179,999                2              3
                                                             $180,000 - $189,999                5              2
                                                             $200,000 - $209,999                1              4
                                                             $210,000 - $219,999                2              -
                                                             $240,000 - $249,999                -              1
                                                             $260,000 - $269,999                1              -
                                                             $320,000 - $329,999                1              2
                                                             $330,000 - $339,999                1              -
                                                             $350,000 - $359,999                1              -
                                                             $360,000 - $369,999                -              2
                                                             $380,000 - $389,999                1              -

                                                                                                $              $

Total income received or due and  receivable by
executive officers of the parent entity:                                                7,949,548      7,564,466
                                                                                       ----------     ----------


Benefits  received  by  executive officers on the grant of options under the BRL
Hardy  Option Plan as valued under Division 13A of the Income Tax Assessment Act
are  included  above.  Motor  vehicles and wine allowances are included at their
salary package values. Information about the options granted to employees is set
out  in  Note 22 (b)(vi)-(viii). There were 654,000 options granted to executive
officers  (with  income  of at least $100,000) during the year ended 31 December
2002  (2001: 565,000).  None  of  these  options  have  been  exercised.

Amounts paid to executive officers who worked wholly or mainly outside Australia
during  the  reporting  period  are  excluded  from  the  above  disclosures.

                                                                         Page 21


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 25.  REMUNERATION OF AUDITORS



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                             $              $
                                                                                      -----------     ----------
Amounts received, or due and receivable, by
the auditors for auditing the accounts and
consolidated accounts of BRL Hardy Limited
and the accounts of its controlled entities,
and for other services:

PricewaterhouseCoopers:
----------------------
                                                                                                
Audit or review of financial reports                                                      408,522        335,255
Other assurance services                                                                  511,291        506,619
Taxation services                                                                         423,048        136,399
Other taxation advisory services                                                          650,000         45,979
Other services                                                                             63,744         32,614
                                                                                       ----------     ----------
                                                                                        2,056,605      1,056,866
                                                                                       ==========     ==========


All audit fees  for controlled  Australian  entities  are  borne  by the  parent
entity.

NOTE 26.  RECONCILIATION OF NET CASH INFLOW FROM OPERATING ACTIVITIES
          TO OPERATING PROFIT AFTER INCOME TAX



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
Operating profit after income tax                                                          84,162         72,159

Depreciation and amortisation                                                              26,497         23,413
Goodwill written off                                                                          708            638
Share of net profits of associates and joint venture partnerships                         (23,280)        (2,285)
Net (profit)/loss on disposal of property, plant and equipment                                127             12
Valuation of grape vines and grapes (SGARA)                                                (3,288)        (3,908)
Provision for doubtful debts                                                                  745            508
Capitalised interest                                                                       (5,186)        (2,713)

Changes in operating assets - (increase)/decrease
- receivables                                                                             (46,076)         6,781
- inventories                                                                            (109,895)       (78,309)
- prepayments                                                                              (7,132)           788
- future income tax benefit                                                                (1,038)        (1,892)

Changes in operating liabilities - increase/(decrease)
- payables                                                                                 26,084         (7,717)
- provisions                                                                               12,425         14,367
                                                                                      -----------    -----------
NET CASH INFLOW FROM OPERATING ACTIVITIES                                                 (45,147)        21,842
                                                                                      ===========    ===========



NOTE 27.  OUTSIDE EQUITY INTERESTS



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
Outside equity interests in controlled entities comprise:
                                                                                               
Share capital                                                                                 628            628
Equity held in partnerships                                                                   350            350
Retained profits                                                                               78            254
                                                                                      -----------    -----------
TOTAL OUTSIDE EQUITY INTERESTS                                                              1,056        - 1,232
                                                                                      ===========    ===========

                                                                         Page 22


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 28.  JOINT VENTURES

JOINT VENTURE OPERATIONS

BRL  Hardy  Limited  has  entered  into  several  joint venture arrangements, to
develop  and  operate  vineyards:

                                                          Participating interest
                                                          ----------------------

The Wegman/BRL Hardy Joint Venture Development                      25%
Elgin Valley Vineyards Joint Venture No. 1                          75%
The Gartner/BRL Hardy Coonawarra Joint Venture                      50%
The Pemberton Vineyards Joint Venture                               50%
The Ausvine Coonawarra Joint Venture                                19%
The Huntfield/BRL Hardy Joint Venture                               50%
The Martin/BRL Hardy Joint Venture                                49.3%
The Willunga Basin Water Users Group Joint Venture                  18%

BRL Hardy Limited's share of the assets employed  in joint ventures is  included
in the financial statements as follows:



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
FREEHOLD LAND
                                                                                               
At independent valuation, 2001                                                              6,260          6,260
At cost                                                                                       257            -
                                                                                      -----------    -----------
TOTAL FREEHOLD LAND                                                                         6,517          6,260
                                                                                      -----------    -----------

BUILDINGS
At cost                                                                                       173            173
(Less): accumulated depreciation                                                              (55)           (49)
                                                                                      -----------    -----------
TOTAL BUILDINGS                                                                               118            124

PLANT AND EQUIPMENT
At cost                                                                                     5,340          3,969
(Less): accumulated depreciation                                                             (403)          (276)
Capital work in progress                                                                     -             1,788
                                                                                      -----------    -----------
TOTAL PLANT AND EQUIPMENT                                                                   4,937          5,481
                                                                                      -----------    -----------

TOTAL PROPERTY, PLANT AND EQUIPMENT                                                        11,572         11,865
                                                                                      ===========    ===========

GRAPE VINES                                                                                 3,435          3,506
                                                                                      -----------    -----------

OPERATING PROFIT

Contribution to operating profit by joint ventures                                             73          1,149
                                                                                      -----------    -----------

JOINT VENTURE ENTITY

BRL Hardy Limited has a 50% interest in the
Brookland Valley Estate Joint Venture which
makes and markets wine.

CONSOLIDATED
Movement in carrying amount of investment:
-----------------------------------------
Carrying amount at the beginning of the financial year                                      3,207          3,013
Share of operating profits after tax                                                          320            194
                                                                                      -----------    -----------
Carrying amount at the end of the financial year                                            3,527          3,207
                                                                                      ===========    ===========


Contingent liabilities and capital expenditure commitments relating to the joint
ventures are included in Notes 29 and 30.

                                                                         Page 23


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 29.  CONTINGENT LIABILITIES



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
Service agreements under which termination benefits
may, in certain circumstances, become payable to
directors and senior executives.                                                            5,855          5,295
                                                                                      -----------    -----------

There are no contingent liabilities with respect to
the economic entity's share of associates and
investments in joint venture partnerships.                                                   -              -
                                                                                      -----------    -----------


The  company  is  jointly  and  severally  liable for all the liabilities of the
Brookland Valley Joint Venture.


NOTE 30.  COMMITMENTS FOR EXPENDITURE



                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
CAPITAL EXPENDITURE
Total capital expenditure contracted for
at balance date but not provided for in
the financial statements:

- not later than 1 year                                                                    19,300         32,352
                                                                                      -----------    -----------

CAPITAL EXPENDITURE - JOINT VENTURES
Total capital expenditure contracted for
at balance date but not provided for in
the financial statements:

- not later than 1 year                                                                      -              -
                                                                                      -----------    -----------

CAPITAL EXPENDITURE - ASSOCIATES
AND JOINT VENTURE PARTNERSHIPS

Total capital expenditure contracted for
at balance date but not provided for in
the financial statements:

- not later than 1 year                                                                     2,323          1,690
                                                                                      -----------    -----------

FINANCE LEASE COMMITMENTS

Lease commitments in respect of capitalised
finance leases are payable as follows:

- not later than 1 year                                                                      -                56
- later than 1 year but not later than 5 years                                               -              -
                                                                                      -----------    -----------
                                                                                             -                56
Less: future finance charges                                                                 -              -
                                                                                      -----------    -----------
                                                                                             -                56
                                                                                      -----------    -----------

Comprising lease liabilities:

- Current                                                                                    -                56
- Non-current                                                                                -              -
                                                                                      -----------    -----------
                                                                                             -                56
                                                                                      -----------    -----------

RENTAL COMMITMENTS
Analysis of non-cancellable rental commitments
not provided for in the financial statements:

- not later than 1 year                                                                     8,926          8,052
- later than 1 year but not later than 5 years                                             28,866         26,060
- greater than 5 years                                                                     19,096         18,228
                                                                                      -----------    -----------
                                                                                           56,888         52,340
                                                                                      ===========    ===========

                                                                         Page 24


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 31.  SUPERANNUATION COMMITMENTS

The  economic  entity  contributes  to  a  number  of superannuation funds which
provide benefits for employees and their dependants on retirement, disability or
death.  The  funds  comprise  one  fund  sponsored  by the economic entity and a
number of multi-employee industry funds.



                                                                                         2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
THE BRL HARDY SUPERANNUATION FUND

The financial position of the economic entity's defined benefit and accumulation
plan measured as at 30 June is as follows:
                                                                                               
Present value of employees' accrued benefits                                               22,164         19,295
Net market value of assets held by the fund to
  meet future benefit payments                                                             24,593         22,240
                                                                                      -----------    -----------
Excess of assets held to meet future
  benefits payments                                                                         2,429          2,945
                                                                                      ===========    ===========

Employer contributions to the fund                                                          5,159          2,791
                                                                                      ===========    ===========

Vested benefits                                                                            24,441         22,045
                                                                                      ===========    ===========


The  BRL  Hardy  Superannuation  Fund  provides cumulative and defined benefits.
Defined lump sum benefits are based on years of service and final average salary
and  contributions  are  part  legally  enforceable.  Employer contributions for
accumulation  benefits  are  legally  enforceable.

An  actuarial  review of the BRL Hardy Superannuation Fund as at 1 July 2000 was
completed  by  L.McMahon  BA,  FIAA.  Based on calculations made as part of this
assessment  and  subsequently,  the directors are of the view that the assets of
the  fund  were  sufficient  to satisfy all benefits that would have been vested
under  the  fund  in  the event of termination of the fund or termination of the
employment  of  each  employee as at 30 June 2002, being the fund's last balance
date.

However, it is believed that the poor financial performance of the fund's assets
since  30  June  2002  may  have  resulted  in  a shortfall if the fund had been
terminated  or  the  employment  of  each  employee had been terminated as at 31
December  2002.  The  financial  position  of the fund is being monitored by the
directors,  and  provision  is  being made by the economic entity to ensure that
there will be no shortfall at 30 June 2003 (the fund's next balance date), after
taking into account the financial performance of the fund's assets to that date.

INDUSTRY FUNDS

The  multi-employee industry funds provide accumulation benefits where the basis
of contribution is an enforceable employer contribution based on a percentage of
the  member's  wage.  The industry funds to which contributions were made by the
economic  entity  are:
-  Statewide Superannuation Trust
-  Host-Plus Superannuation
-  Superannuation Trust of Australia

                                                                         Page 25


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 32.  RELATED PARTIES

DIRECTORS AND DIRECTOR-RELATED ENTITIES

(i)  The  names of  persons who were directors of the  parent entity during  the
     financial year are:

     I.J. Pendrigh AM              M.R. Davison                   R.H. Searby QC
     R.G. Chabrel                  Sir James G. Hardy OBE         A.W. Whatmore
     S.B.  Millar                  A.M.  Kennedy                  D.Woods



                                                                                             CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
(ii) Loans to directors
                                                                                               
S.B. Millar                                                                                  -             -
A.M. Kennedy                                                                                 -             -
                                                                                             -             -
                                                                                      -----------    -----------
                                                                  (Note 8)                   -             -
                                                                                      ===========    ===========


Secured  loans were made to Messrs Millar and Kennedy by the parent entity (then
Berri  Renmano  Limited)  in 1991, prior to the appointment of either of them as
directors.  Monthly  repayments included interest at the rate of 5.75% per annum
and  were  secured  by  a  lien  over  units  issued  by  The International Wine
Investment  Fund.  The loans were for a period of 10 years and were repaid at 30
June 2001.



                                                                                             CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
Loan repayments received                                                                     -            13,245

Interest received                                                                            -               381


(iii) Directors' holdings of shares and share options

The  directors  were  involved  in  share  and  option  transactions  which  are
summarised  below.  The shareholdings include all  shares held  beneficially  by
directors and director-related entities.



                                                                        NUMBER OF SHARES
                                              ------------------------------------------------------------------
                                               BALANCE       PURCHASES      OPTIONS      DISPOSALS       BALANCE
                                              31.12.01                     EXERCISED                    31.12.02
                                              --------       ---------     ---------     ---------      --------
                                                                                         
I.J. Pendrigh AM                               155,182           8,000          -           (8,000)      155,182
R.G. Chabrel                        (1)         17,717             169          -             -           17,886
S.B. Millar                                    115,024          73,131        82,600       (51,546)      219,209
M.R. Davison                        (1)           -               -           15,000       (15,000)         -
Sir James G. Hardy OBE                         368,840            -             -             -          368,840
A.M. Kennedy                                   250,547           5,032        50,000       (30,000)      275,579
R.H. Searby QC                                  43,034           1,018          -             -           44,052
A.W. Whatmore                                   66,350            -             -             -           66,350
D.Woods                                        126,750           5,000        50,000       (85,967)       95,783

                                                                        NUMBER OF SHARES
                                              ------------------------------------------------------------------
                                               BALANCE       PURCHASES      OPTIONS      DISPOSALS       BALANCE
                                              31.12.00                     EXERCISED                    31.12.01
                                              --------       ---------     ---------     ---------       --------
I.J. Pendrigh AM                                91,074          18,508        80,000       (34,400)      155,182
R.G. Chabrel                        (1)          6,357          10,760        66,600       (66,000)       17,717
S.B. Millar                                    233,017          25,833         4,000      (147,826)      115,024
M.R. Davison                        (1)           -              2,000        20,000       (22,000)         -
Sir James G. Hardy OBE                         365,173           3,667          -             -          368,840
A.M. Kennedy                                   196,906           8,641        65,000       (20,000)      250,547
R.H. Searby QC                                  25,611           7,423        20,000       (10,000)       43,034
A.W. Whatmore                                   38,500           7,850        20,000          -           66,350
D.Woods                                        105,000          26,750        50,000       (55,000)      126,750

Notes:
(1)   Messrs R.G. Chabrel and  M.R. Davison are also directors of  Berren  Asset
      Management Limited, the manager of The International Wine Investment Fund,
      which had  relevant  interests in 18,555,094 (2001: 20,538,581) fully paid
      ordinary shares  and  exchange-traded  bought  call options over 4,450,000
      (2001: nil) fully paid ordinary shares of the parent entity at 31 December
      2002.


At 31  December 2002 directors and  director-related entities held  in aggregate
1,242,881  ordinary shares, 188,200 July 2003 ($5.11) options, 485,000 July 2004
($6.61)  options,  197,000  October  2005 ($7.45) options, 261,000 November 2006
($10.13)  options,  and  280,000 September 2007 ($8.08) options.  At 31 December
2001  directors  and  director-related  entities  held  in  aggregate  1,143,444
ordinary  shares,  97,600  July  2002 ($3.72) options, 273,200 July 2003 ($5.11)
options, 500,000 July 2004 ($6.61) options, 196,000 October 2005 ($7.45) options
and 260,000 November 2006 ($10.13) options.

The  number  of options granted during the year to executive directors under the
BRL Hardy Option Plan and the terms and conditions under which they were granted
were  approved  by  resolution at the annual general meeting of the company (see
Note 22(b)(vi)-(viii) for the terms and conditions applicable to these options).
During  2002, 92,818 September 2007 ($8.08) options were issued to non-executive
directors under the NED Plan (see Note 22(c)).

                                                                         Page 26


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 32.  RELATED PARTIES (CONTINUED)

(iv)  Other transactions with directors and director-related entities

The  parent  entity  has  retained  the  services of Sir James G. Hardy OBE as a
consultant  for  the  marketing of its products.  The parent entity also pays an
annuity and royalties on the sale of wine under the Sir James brand to Sir James
Hardy  and  the J.G. Hardy Retirement Fund in consideration of the granting of a
licence  to  register  and  use the trade mark 'Sir James'.  The amounts paid or
accrued are included in the remuneration of directors disclosed in Note 24.

Mr  R.G. Chabrel  is  a  director and active  member of CCW Co-operative Limited
(CCW) which supplies grapes to the parent entity on commercial terms.  An entity
associated  with  Mr Chabrel holds 300 shares in CCW, and supplied grapes to the
parent entity through CCW.

Entities associated with Messrs R.G. Chabrel and M.R. Davison sold 285 tonnes of
grapes  in  2002  (2001:  109)  to  the  parent  entity  on commercial terms and
conditions under an agreement dated 12 December 1996.

Other  transactions  entered  into  during  the year with the directors or their
director-related  entities were within normal employee, customer, shareholder or
supplier  relationships  on  terms  and conditions no more favourable than those
available to other employees, customers, shareholders or suppliers.

OTHER ENTITIES

(i)   Barossa Valley Estate Ltd. (BVE)

The  parent  entity  holds  50%  of the issued shares of BVE.  The parent entity
provides  packaging  services to BVE at commercial rates and is sole distributor
of BVE's wines purchased at commercial rates.

(ii)  Brookland Valley Estate Pty. Ltd.

The parent entity holds 50% of the issued shares in Brookland Valley Estate Pty.
Ltd.  The parent entity purchases wine from Brookland Valley Estate Pty. Ltd. at
commercial rates and provides winemaking, packaging and distribution services at
commercial rates.

(iii) Churchill  Cellars  Ltd.

The  parent entity holds 20% of the issued shares in Churchill Cellars Ltd.  The
parent entity sells wine at commercial rates to Churchill Cellars Ltd.

(iv)  Medallion Wine Marketing Inc.

The  parent  entity holds 25% (2001: 18%) of the issued shares in Medallion Wine
Marketing  Inc.  The  parent  entity sells wine at commercial rates to Medallion
Wine Marketing Inc.

(v)  Pacific Wine Partners, LLC

BRL  Hardy  (USA)  Inc., a 100% owned subsidiary within the consolidated entity,
holds 50% of the issued shares in Pacific Wine Partners, LLC.  The parent entity
sells wine at commercial rates to Pacific Wine Partners, LLC.

(vi) Nobilo Wines Limited (NWL)

                                                                         Page 27


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 32.  RELATED PARTIES (CONTINUED)




OTHER ENTITIES (CONTINUED)

The aggregate of each different type of transaction with related parties, other
than wholly owned controlled entities and transactions with directors set out
in Note 32, were as follows:
                                                                                             CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               

Outgoings:
---------
Purchases of wine                                                                           9,789          9,366
Crushing/contract processing expenses                                                           6            269
Marketing                                                                                   5,527            680
Investment                                                                                   -             2,436
Purchase of grapes                                                                            451            145
Recharges (net)                                                                               301           -
Loans                                                                                         599            602
Exchange rate adjustments (net)                                                             1,219           -

Inflows:
-------
Sale of wine                                                                               41,463         17,079
Contract crushing                                                                             393            218
Dividends                                                                                     124             90
Management                                                                                     68             64
Marketing                                                                                     130             16
Packaging expenses                                                                          1,047          1,288
Recharges (net)                                                                              -               559
Loans                                                                                        -                31
Interest                                                                                       33             26
Exchange rate adjustments (net)                                                              -             1,779
Other                                                                                          27             25


SUPERANNUATION  FUND

Information relating to superannuation funds is set out in Note 31.

                                                                         Page 28


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 33.  PARTICULARS IN RELATION TO CONTROLLED ENTITIES



                                                                                                           Investment
                                                                         Class        Holding         2002            2001
                                                    Incorporated        of Share         %               $               $
                                                    ------------     --------------   -------     ------------    ------------
PARENT ENTITY
                                                                                                   
BRL Hardy Limited                                            SA

CONTROLLED ENTITIES

Vineyards (Australasia) Pty. Ltd.                            SA           Ord.            100           48,500          48,500

BRL Hardy Finance Pty. Ltd.                                  SA           Ord.            100      176,863,773     176,863,773
- BRL Hardy (USA) Inc.                      (3)             USA           Ord.             20
                                                                     Fixed Rate Pref.     100
- BRL Hardy Investments (USA) Inc.                          USA           Ord.            100
    - BRL Hardy (USA) Inc.                  (3)             USA           Ord.             80
- Hardy TransTasman LLP                     (6)             VIC           Ord.              1

Thomas Hardy Hunter River Pty. Ltd.                          SA           Ord.            100            2,553           2,553

The Stanley Wine Company Pty. Ltd.                           SA           Ord.            100        5,583,804       5,583,804

Houghton Wines (Western Australia) Pty. Ltd.                 WA           Ord.            100        9,946,706       9,946,706
- The WA Winegrowers Association Pty. Ltd.                   WA           Ord.            100
                                                                      10% Cum. Pref       100

International Cellars (Aust) Pty. Ltd.                      ACT           Ord.            100        9,366,029       9,366,029
- Walter Reynell & Sons Wines Pty. Ltd.                      SA           Ord.            100

BRL Hardy (Canada) Limited                  (1)          Canada           Ord.            100                1               1

BRL Hardy Europe Limited                    (2)              UK           Ord.            100        3,659,689       3,659,689

BRL Hardy (Investments) Limited             (2)              UK           Ord.            100       21,738,641      21,738,641

La Baume SA                                 (4)          France           Ord.             90        5,647,738       5,647,738

Nobilo Wine Group Limited                   (5)              NZ           Ord.            100       36,796,774      36,802,097
- Nobilo Vintners Limited                   (5)              NZ           Ord.            100
    - Valleyfield Vineyard Partnership      (5)              NZ           Ord.             60
    - Mohaka Vineyard Partnership           (5)              NZ           Ord.             90
- Selaks Wines Limited                      (5)              NZ           Ord.            100
- National Liquor Distributors Limited      (5)              NZ           Ord.            100
    - Hardy TransTasman LLP                 (6)             VIC           Ord.             99
                                                                                                  ------------    ------------
                                                       (Note 12)                                   269,654,208     269,659,531
                                                                                                  ============    ============

(1)   Audited by PricewaterhouseCoopers in Canada.
(2)   Audited by PricewaterhouseCoopers in the United Kingdom.
(3)   Audited by PricewaterhouseCoopers in Australia (2001: audited
      by PricewaterhouseCoopers in the United States of America).
(4)   Audited by PricewaterhouseCoopers in France.
(5)   Audited by PricewaterhouseCoopers in New Zealand.
(6)   Incorporated 30 December 2002


                                                                         Page 29


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 34.  STATEMENT OF OPERATIONS OF SEGMENTS

The  economic  entity  operates  predominantly  in the wine making and marketing
industry.  Inter-segment  pricing is on commercial terms and inter-segment sales
are  disclosed  based on the geographical location of the segment acquiring wine
products.



                                                                                                   Unallocated
                                                                                                    and inter-
                                                                            North      Rest of       segment
                                                 Australasia     Europe     America    the world   eliminations    Consolidated
                                                    $'000        $'000       $'000       $'000         $'000           $'000
                                                 -----------   ----------  ---------  -----------  ------------    ------------
                                                                                                
31 DECEMBER 2002
REVENUE (BY LOCATION OF CUSTOMER)
Sales to external customers                          401,890      377,629     55,659       18,964          -            854,142
Inter-segment sales                                   18,903      268,102       -            -         (287,005)           -
                                                 -----------   ----------  ---------  -----------  ------------   -------------
Total sales revenue                                  420,793      645,731     55,659       18,964      (287,005)        854,142
Share of net profits of associates and
joint venture partnerships                               226         -        23,054         -             -             23,280
Other revenue                                         14,333        1,859          2         -             -             16,194
                                                 -----------   ----------  ---------  -----------  ------------   -------------
TOTAL SEGMENT REVENUE                                435,352      647,590     78,715       18,964      (287,005)        893,616
                                                 -----------   ----------  ---------  -----------  ------------   -------------

SEGMENT RESULT (BY LOCATION OF CUSTOMER)
Profit from ordinary activities before
  interest and tax                                    46,297       74,079     32,444        1,739        (9,933)        144,626
Borrowing costs                                      (11,975)      (8,899)    (3,715)        (684)         -            (25,273)
                                                 -----------   ----------  ---------  -----------  ------------   -------------
PROFIT FROM ORDINARY ACTIVITIES BEFORE TAX            34,322       65,180     28,729        1,055        (9,933)        119,353
                                                 -----------   ----------  ---------  -----------  ------------

Income tax expense                                                                                                      (35,191)
                                                                                                                  -------------
NET PROFIT                                                                                                               84,162
                                                                                                                  =============

Segment assets (by physical location)              1,282,776      197,848    226,199         -          (92,356)      1,614,467
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Segment liabilities (by physical location)           750,873      134,505     40,712         -          (92,501)        833,589
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Acquisition of property, plant and equipment
  and intangibles (by physical location)              80,512        3,250       -            -             -             83,762
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Depreciation and amortisation of segment
  assets (by physical location)                       24,680        1,817       -            -             -             26,497
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Other non-cash expenses (by location of assets)        1,602          189       -            -             -              1,791
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Investments in associates/other investees
  accounted for by the equity method
  (by location of assets)                              8,396         -       225,180         -             -            233,576
                                                 -----------   ----------  ---------  -----------  ------------   -------------

31 DECEMBER 2001
REVENUE (BY LOCATION OF CUSTOMER)
Sales to external customers                          357,556      323,453     56,412       20,187          -            757,608
Inter-segment sales                                      701      212,605     12,890         -         (226,196)           -
                                                 -----------   ----------  ---------  -----------  ------------   -------------
Total sales revenue                                  358,257      536,058     69,302       20,187      (226,196)        757,608
Share of net profits of associates and
joint venture partnerships                               464         -         1,821         -             -              2,285
Other revenue                                         10,616        2,151      1,002         -             -             13,769
                                                 -----------   ----------  ---------  -----------  ------------   -------------
TOTAL SEGMENT REVENUE                                369,337      538,209     72,125       20,187      (226,196)        773,662
                                                 -----------   ----------  ---------  -----------  ------------   -------------

SEGMENT RESULT (BY LOCATION OF CUSTOMER)
Profit from ordinary activities before
  interest and tax                                    46,794       71,589      5,282        1,776        (1,193)        124,248
Borrowing costs                                      (10,324)      (7,629)    (3,412)      (1,025)         -            (22,390)
                                                 -----------   ----------  ---------  -----------  ------------   -------------
PROFIT FROM ORDINARY ACTIVITIES BEFORE TAX            36,470       63,960      1,870          751        (1,193)        101,858
                                                 -----------   ----------  ---------  -----------  ------------

Income tax expense                                                                                                      (29,699)
                                                                                                                  -------------
NET PROFIT                                                                                                               72,159
                                                                                                                  =============

Segment assets (by physical location)              1,117,526      156,617    226,508         -          (79,911)      1,420,740
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Segment liabilities (by physical location)           533,935      101,160    169,718         -          (56,544)        748,269
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Acquisition of property, plant and equipment
  and intangibles (by physical location)              76,147       11,312        237         -             -             87,696
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Depreciation and amortisation of segment
  assets (by physical location)                       21,945        1,319        149         -             -             23,413
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Other non-cash expenses (by location
  of assets)                                           1,139          180       -            -             -              1,319
                                                 -----------   ----------  ---------  -----------  ------------   -------------

Investments in associates/other investees
  accounted for by the equity method
  (by location of assets)                              8,332         -       223,166         -             -            231,498
                                                 -----------   ----------  ---------  -----------  ------------   -------------

                                                                         Page 30


NOTES TO FINANCIAL STATEMENTS
-----------------------------

NOTE 35.  EARNINGS PER SHARE



                                                                                             CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
                                                                                               
Basic earnings per share                                                               48.2 cents     45.5 cents

Diluted earnings per share                                                             47.7 cents     44.7 cents

Weighted average number of shares used as the denominator:
Weighted average number of ordinary shares used as the
  denominator in calculating basic earnings per share                                 175,087,735    158,622,020

Weighted average number of ordinary shares and potential
  ordinary shares used as the denominator in calculating
  diluted earnings per share                                                          176,993,717    161,673,629


In  2002, 2,552,350 (2001:2,545,300) $10.13  options  (see  Note 22(b)(v))  were
excluded  from  the diluted earnings per share calculation as the exercise price
of these options did not exceed the average market price.

NOTE 36.  FINANCIAL INSTRUMENTS

Derivative  financial  instruments  are  used  by  the  economic entity to hedge
against risks arising from changes in foreign exchange rates and interest rates.
Instruments  used  include  forward  foreign  exchange  contracts, interest rate
swaps,  forward  rate  agreements  and  options.  The  economic  entity does not
undertake  speculative trading in these instruments. All derivative transactions
are  undertaken  to  hedge  the  risks relating to existing or expected physical
positions.  Consequently, any gain or loss under derivative transactions arising
as a result of foreign currency or interest rate movement is recognised when the
underlying physical transaction occurs.

FOREIGN EXCHANGE RISK

The economic entity enters into foreign exchange contracts to hedge the exchange
rate  risk  on  expected  future receivables and payables denominated in foreign
currencies.

The  economic  entity  is  a  substantial exporter and distributor of wines into
world  markets and is expecting significant growth in its international business
in the future, as product availability expands and world markets develop. One of
the  key determinants of market growth is the ability to provide quality product
at  appropriate prices in each market with certainty as to both supply and price
over  time.  Accordingly,  the  economic entity has established a board-approved
risk  management  policy  for  the  identification,  management and reporting of
exposure to foreign currency exchange rate transactions.

The  principal  purposes  of  the  foreign  currency  hedging  activities are to
minimise  the  volatility  of  the profit and cash flows arising from changes in
exchange rates, to protect the entity from adverse exchange rate shock, to avoid
positions  which may threaten market competitiveness and to protect the entity's
viability.  The  policy  outlines  maximum  and  minimum proportions of expected
future  transactions  that  may  be covered in any period and limits the maximum
forward cover to 63 months.

The  amounts  of  anticipated  future  foreign  currency sales and purchases are
forecast  taking  into account market conditions, commitments from customers and
experience.  Hedging  is  only  effected after considering the level of currency
exposures,  historical  exchange rates, financial market volatility and expected
future currency rate movements.

                                                                         Page 31


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 36.  FINANCIAL INSTRUMENTS (CONTINUED)

FOREIGN EXCHANGE RISK (CONTINUED)

The  following  table  sets  out  the  gross  value to be received or paid under
foreign currency derivative contracts at 31 December 2002, based on the contract
forward  rates  or  in the case of options the strike rates, within the maturity
bands for the settlement dates of the contracts:



                                                                                             CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
EXPORTS
                                                                                               
Sell English pounds (GBP)/buy Australian dollars (AUD):
 0 - 12 months                                                                            163,470        150,493
13 - 24 months                                                                            143,199        158,781
25 - 36 months                                                                            134,746        132,022
37 - 48 months                                                                             75,289        112,393
49 - 63 months                                                                             11,177         49,726
                                                                                      -----------    -----------
                                                                                          527,881        603,415
                                                                                      -----------    -----------
Sell American dollars (USD)/buy AUD:
 0 - 12 months                                                                             54,708         59,463
13 - 24 months                                                                             70,650         69,499
25 - 36 months                                                                             63,599         85,027
37 - 48 months                                                                             37,009         83,957
49 - 63 months                                                                             24,707         20,538
                                                                                        ---------      ---------
                                                                                          250,673        318,484
                                                                                        ---------      ---------
Sell Canadian dollars (CAD)/buy AUD:
 0 - 12 months                                                                             14,744         18,114
13 - 24 months                                                                             16,019         14,850
25 - 36 months                                                                             12,077         16,019
37 - 48 months                                                                              6,439         12,077
49 - 63 months                                                                              1,880          3,932
                                                                                        ---------      ---------
                                                                                           51,159         64,992
                                                                                        ---------      ---------
Sell New Zealand dollar (NZD)/buy AUD:
 0 - 12 months                                                                              9,000         10,002
13 - 24 months                                                                              9,019          7,718
25 - 36 months                                                                              8,183          4,468
37 - 48 months                                                                              5,772          3,215
49 - 63 months                                                                              1,660            804
                                                                                        ---------      ---------
                                                                                           33,634         26,207
                                                                                        ---------      ---------
Sell Euro dollars (EUR)/buy AUD:
 0 - 12 months                                                                             41,826         18,222
13 - 24 months                                                                             41,451         17,376
25 - 36 months                                                                             38,994         14,470
37 - 48 months                                                                             26,605         12,013
49 - 63 months                                                                             11,049          6,566
                                                                                        ---------      ---------
                                                                                          159,925         68,647
                                                                                        ---------      ---------
Sell CAD, USD and GBP/buy NZD:
 0 - 12 months                                                                             12,356          8,751
13 - 24 months                                                                              8,940          5,515
25 - 36 months                                                                              3,768          1,720
                                                                                        ---------      ---------
                                                                                           25,064         15,986
                                                                                        ---------      ---------
Sell other currencies/buy AUD:
 0 - 12 months                                                                               -              -
                                                                                        ---------      ---------
Total exports                                                                           1,048,336      1,097,731
                                                                                        =========      =========
IMPORTS
Sell AUD/buy other currencies:
 0 - 12 months                                                                                297           -
                                                                                        ---------      ---------
Sell NZD/buy AUD:
 0 - 12 months                                                                              -                336
                                                                                        ---------      ---------
Total imports                                                                                 297            336
                                                                                        =========      =========
FINANCING
Sell American dollars (USD)/buy AUD:
49 - 63 months                                                                            132,375           -
                                                                                        =========      =========

                                                                         Page 32


NOTES TO THE FINANCIAL STATEMENT
--------------------------------

NOTE 36.  FINANCIAL INSTRUMENTS (CONTINUED)

FOREIGN EXCHANGE RISK (CONTINUED)

The  effective  exchange  rates of the contracts have not been disclosed because
the  information  is commercially sensitive. In any event, the actual settlement
rates  on  certain option contracts cannot be determined with any accuracy until
the  date  of  settlement or some other future time or as a result of some other
future event.

Where the contracts are hedging expected future sales or purchases, any gains or
losses  arising on the contracts, together with the costs of the contracts, will
be  recognised   in  the  financial  statements  at  the  time  the   underlying
transactions  occur.  The  net  unrecognised  loss  on  these  contracts,  on  a
mark-to-market   basis,  at  31  December  2002  was  $41,372,779   (2001:  loss
$67,447,000).

INTEREST RATE RISK

The  economic  entity uses interest rate contracts to hedge against movements in
interest rates on its short term and long term debt. The key purpose of interest
rate  hedging  activities is to minimise the volatility of the economic entity's
profit  and  net cash flows arising from changes in interest rates. The terms of
the  interest  rate  contracts are intended to match the maturity profile of the
underlying debt.

The economic entity uses swaps, forward rate agreements and options to hedge its
exposure.  It operates under a board-approved risk management policy that allows
it  to  cover certain percentages of its exposure out to 48 months. In addition,
specific  interest rate cover has been taken for amounts with maturities ranging
up to 8 years. Hedging is only effected after taking into account expected debt,
financial  market  volatility,  historical  rates  and  alternative  methods  of
funding.

As these interest rate contracts are hedging expected debt, any unrealised gains
and  losses  on the contracts, together with the costs of the contracts, will be
recognised  in  the financial statements at the time the underlying transactions
occur.  The net unrecognised loss on these contracts, on a mark-to-market basis,
as at 31 December 2002 was $11,997,999 (2001: loss $3,985,788).

The  economic  entity's exposure to interest rate risk and the effective average
interest  rate  for  classes  of  financial  assets and financial liabilities by
period in which they are contracted to mature or be repriced is set out below:




                                                                   FIXED INTEREST MATURING IN:
                                                              -------------------------------------
2002                                              FLOATING                                                NON
                                                  INTEREST      1 YEAR     OVER 1 YEAR      OVER        INTEREST
                                                    RATE       OR LESS      TO 5 YEARS     5 YEARS       BEARING      TOTAL
                                          NOTES    $'000        $'000         $'000         $'000        $'000        $'000
                                          -----   --------    ---------    -----------    ---------    ----------   ---------
                                                                                               
FINANCIAL ASSETS
Cash assets                                   7     43,553         -              -            -             -         43,553
Receivables                                   8       -            -              -            -          225,637     225,637
Other financial assets - investments         12       -            -              -            -           26,452      26,452
                                                  --------    ---------    -----------    ---------    ----------   ---------
                                                    43,553         -              -            -          252,089     295,642
                                                  --------    ---------    -----------    ---------    ----------   ---------
Weighted average interest rate (pa)                   3.73%        -              -            -             -
                                                  --------    ---------    -----------    ---------    ----------

FINANCIAL LIABILITIES
Trade and other creditors                    17       -            -              -            -          150,460     150,460
Commercial bills                             18       -         282,285        217,539       45,000          -        544,824
Bank advances                                18       -          38,509         15,584         -             -         54,093
Other loans                                  18       -           7,980           -            -             -          7,980
                                                  --------    ---------    -----------    ---------    ----------   ---------
                                                      -         328,774        233,123       45,000       150,460     757,357
                                                  --------    ---------    -----------    ---------    ----------   ---------
Weighted average interest rate (pa)                   -            4.92%          6.09%        6.27%         -
                                                  --------    ---------    -----------    ---------    ----------


                                                                         Page 33


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 36.  FINANCIAL INSTRUMENTS (CONTINUED)




                                                                   FIXED INTEREST MATURING IN:
                                                              -------------------------------------
2001                                              FLOATING                                                NON
                                                  INTEREST      1 YEAR     OVER 1 YEAR      OVER        INTEREST
                                                    RATE       OR LESS      TO 5 YEARS     5 YEARS       BEARING      TOTAL
                                          NOTES    $'000        $'000         $'000         $'000        $'000        $'000
                                          -----   --------    ---------    -----------    ---------    ----------   ---------
                                                                                               
FINANCIAL ASSETS
Cash assets                                   7     39,665         -              -            -             -         39,665
Receivables                                   8       -            -              -            -          225,585     225,585
Other financial assets - investments         12       -            -              -            -           26,194      26,194
                                                  --------    ---------    -----------    ---------    ----------   ---------
                                                    39,665         -              -            -          251,779     291,444
                                                  --------    ---------    -----------    ---------    ----------   ---------
Weighted average interest rate (pa)                   3.52%        -              -            -             -
                                                  --------    ---------    -----------    ---------    ----------

FINANCIAL LIABILITIES
Trade and other creditors                    17       -            -              -            -          169,500     169,500
Commercial bills                             18       -         157,042         55,000       90,000          -        302,042
Bank advances                                18       -         177,943          8,530         -             -        186,473
Other loans                                  18       -           6,721           -            -             -          6,721
Lease liabilities                            18       -              56           -            -             -             56
                                                  --------    ---------    -----------    ---------    ----------   ---------
                                                      -         341,762         63,530       90,000       169,500     664,792
                                                  --------    ---------    -----------    ---------    ----------   ---------
Weighted average interest rate (pa)                   -            4.57%          6.12%        6.22%         -
                                                  --------    ---------    -----------    ---------    ----------   ---------


CREDIT RISK EXPOSURES

On-balance sheet financial instruments:
--------------------------------------
The  credit  risk  on  financial  assets, excluding investments, of the economic
entity which have been recognised on the statement of financial position, is the
carrying amount, net of any provision for doubtful debts.

The  economic  entity  minimises  concentration  of  credit  risk by undertaking
transactions  with  a large number of customers in various countries. The parent
entity  also  takes out insurance on certain overseas debts to reduce its credit
risk.

Off-balance sheet financial instruments:
------------------------------------------
The economic entity operates under a risk management policy which determines the
levels  of  hedging,  the  types  of financial instruments that can be used, the
authorisation limits and counterparty risk. The results of hedging are monitored
to maintain financial control over the application of the policy.

There  was  no  material counterparty risk exposure to the economic entity at 31
December 2002 or 2001.

                                                                         Page 34


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 36.  FINANCIAL INSTRUMENTS (CONTINUED)

NET FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Net  fair  values  of  financial  assets  and  liabilities are determined by the
economic entity on the following bases:

On-balance sheet:
----------------
The  net  fair value of cash and cash equivalents, non-interest bearing monetary
financial  assets  and  liabilities  and  other financial assets and liabilities
approximates  their  carrying  value.  Unlisted  equity  investments  have  been
assessed based on  the underlying net assets and  future maintainable  earnings.

Off-balance sheet:
-----------------
The  valuation of off-balance sheet financial instruments reflects the estimated
amounts  which the economic entity would have to pay or receive to terminate the
contracts  (net  of transaction costs) or replace the contracts at their current
market  rates  as  at  reporting  date.  This  is  based  on  independent market
quotations and determined using standard valuation techniques.

NET FAIR VALUES

Financial  assets and liabilities included in current and non-current assets and
liabilities  in  the statement of financial position are carried at amounts that
approximate net fair value.

NOTE 37.  SIGNIFICANT EVENT OCCURRING AFTER REPORTING DATE

On 17 January 2003, BRL Hardy Limited ("BRL" or "the Company") and Constellation
Brands,  Inc.  ("Constellation")   announced  that  they  had  entered  into  an
Implementation  Deed  ("ID")  to  merge  the  respective  businesses through two
schemes of arrangement pursuant to Part 5.1 of the Corporations Act 2001.

Under the merger proposal:

-     a wholly owned subsidiary of Constellation will acquire all  of the shares
      in BRL by way of the scheme of arrangement ("Share Scheme"); and
-     all of the options over shares in BRL  ("Options") granted pursuant to the
      BRL Hardy Option Plan  ("Option Plan") will be cancelled  by way of scheme
      of arrangement ("Option Scheme").

Pursuant to the  Share Scheme, the consideration offered  to the shareholders in
BRL ("BRL Shareholders") for each BRL share held is either:

-     cash of $10.50 per share; or
-     Constellation shares; or
-     any combination of cash and Constellation shares.

Pursuant to the Option Scheme, the consideration  offered to  BRL  optionholders
("Optionholders") for each option is:

-     the cash amount equal to the difference between  $10.50 and  the  exercise
      price of the Options; and
-     an additional cash amount of $0.12 for Options on issue as at 19 September
      2001.

The  Share Scheme  and  the  Option Scheme were both  approved by  the requisite
majorities of BRL Shareholders and Optionholders at general meetings held on  20
March 2003  and  final  approval  was  granted  by  the  Supreme Court of  South
Australia  on 27 March 2003, which is the effective date for  both  schemes,  on
which  date trading in BRL shares ceased on the Australian Stock Exchange (ASX).
BRL  has  become a wholly owned subsidiary of Constellation and will be delisted
from the ASX after the schemes have been implemented according to their terms.

     The  financial  effects  of  the above transaction have not been brought to
account at 31 December 2002, as it related to an event occurring after reporting
date which does not relate to conditions existing at 31 December 2002.

                                                                         Page 35


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 38.  RECONCILIATIONS TO U.S. GAAP

BRL  Hardy  Limited prepares its consolidated financial statements in accordance
with  generally  accepted  accounting principles in Australia ("A GAAP"). A GAAP
differs  in  certain  material  respects  from  generally  accepted   accounting
principles  in  the  United States ("U.S. GAAP"), as they relate to the Company.
These  differences  and  the  effect of the adjustments necessary to present BRL
Hardy  Limited's  consolidated net profit attributable to members, shareholders'
equity  and  cash  flows in accordance with U.S. GAAP as at 31 December 2002 and
2001  and  for  the  years  then  ended,  are  detailed  below.



                                                                                             CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------
(i) NET PROFIT ATTRIBUTABLE TO MEMBERS
                                                                                            
Net profit attributable to members in accordance
  with A GAAP                                                                              84,338         72,212
                                                                                      -----------    -----------

U.S. GAAP adjustments:

  (a) Superannuation                                                                        1,272           (204)
  (b) Stock compensation                                                                     (311)        (3,023)
  (c) Insurance receivable                                                                 (9,148)          -
  (d) Capitalisation of borrowing costs to inventory                                       (3,918)        (2,012)
  (e) Grape vines and inventory                                                              (507)        (2,346)
  (f) Goodwill                                                                                708           -
  (g) Revenue recognition                                                                    (444)          -
  (h) Purchase accounting for Nobilo                                                         -            (1,141)
  (i) Derivative instruments                                                               16,811        (28,471)
  (i) Hedge of net investments - FRPS mark to market                                       (3,518)          -
  (j) Investment in GSI Holdings                                                           (1,897)        (1,298)
  (k) Deferred income taxes                                                                  (610)          (936)
  (k) Tax impact of U.S. GAAP adjustments                                                     405         10,642
                                                                                      -----------    -----------
Total U.S. GAAP adjustments to net profit
  attributable to members                                                                  (1,157)       (28,789)
                                                                                      -----------    -----------

Net profit attributable to members in accordance
  with U.S. GAAP                                                                           83,181         43,423
                                                                                      ===========    ===========




                                                                                              CONSOLIDATED
                                                                                          2002           2001
                                                                                             $              $
                                                                                      -----------    -----------
                                                                                               
EARNINGS PER SHARE

Basic net profit attributable to members per share in accordance with U.S. GAAP             $0.48          $0.28
                                                                                      ===========    ===========

Diluted net profit attributable to members per share in accordance with U.S. GAAP           $0.48          $0.28
                                                                                      ===========    ===========

Basic weighted average number of shares outstanding                                   171,774,892    154,648,864
Diluted weighted average number of shares outstanding                                 173,680,874    157,700,473


                                                                         Page 36


NOTE TO THE FINANCIAL STATEMENTS
--------------------------------

NOTE 38.  RECONCILIATIONS TO U.S. GAAP (CONTINUED)




(ii)  SHAREHOLDERS' EQUITY
                                                                                             CONSOLIDATED
                                                                                          2002           2001
                                                                                         $'000          $'000
                                                                                      -----------    -----------

                                                                                               
Shareholders' equity in accordance with A GAAP                                            780,878        672,471
                                                                                      -----------    -----------

U.S. GAAP adjustments:

  (a) Superannuation                                                                        3,576          2,304
  (c) Insurance receivable                                                                 (9,148)          -
  (d) Capitalisation of borrowing costs to inventory                                      (14,241)       (10,323)
  (e) Grape vines                                                                          (5,602)        (4,532)
  (e) Inventory                                                                            (3,116)        (3,679)
  (f) Goodwill                                                                                708           -
  (g) Revenue recognition                                                                    (444)          -
  (h) Purchase accounting for Nobilo                                                         (970)          (970)
  (i) Derivative instruments                                                              (53,439)       (70,838)
  (i) Hedge of net investments - FRPS mark to market                                       (1,520)          -
  (j) Investment in GSI Holdings                                                          (22,380)       (24,370)
  (k) Deferred income taxes                                                                (7,087)        (6,477)
  (k) Tax impact of U.S. GAAP adjustments C/F                                              26,529         26,384
  (l) Revaluation of property, plant and equipment                                        (16,595)       (16,818)
  (m) Minority interest                                                                    (1,056)        (1,232)
  (n) Dividends                                                                              -            19,000
                                                                                      -----------    -----------
Total U.S. GAAP adjustments to
  shareholders' equity                                                                   (104,785)       (91,551)
                                                                                      ------------   -----------
Shareholders' equity in accordance
  with U.S. GAAP                                                                           676,093       580,920
                                                                                      ============   ===========

(iii) CHANGES IN U.S. GAAP SHAREHOLDERS' EQUITY

Shareholders' equity at the beginning of the year                                          580,920       395,109

Net profit attributable to members                                                          83,181        43,423

Other comprehensive income:

      Movement in foreign currency translation                                                 295           896
  (i) Hedge of net investments - reversal of amounts
        in foreign currency translation                                                      1,998          -
  (i) SFAS 133 transition liability, net of tax                                               -           (2,492)
  (i) Current period movement in transition liability, net of tax                              412           525
                                                                                      ------------   -----------
Total comprehensive income                                                                  85,886        42,352
                                                                                      ------------   -----------
  (b) Additional paid in capital - employee
        stock compensation                                                                     311         3,023
  (j) (Purchase)/Sale of BRL shares by the IWIF                                              3,205        (3,139)
      Issuance of shares for cash (change in issued share capital)                          41,665       172,259
      Dividends                                                                            (35,894)      (28,684)
                                                                                      ------------   -----------
Shareholders' equity at the end of the year                                                676,093       580,920
                                                                                      ============   ===========


                                                                         Page 37


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 38.  RECONCILIATIONS TO U.S. GAAP (CONTINUED)

(a)  Superannuation

The  Company  recognises  defined  benefit  superannuation expense on an accrual
basis in accordance with actuarial recommendations.

Under  U.S.  GAAP,  SFAS  87  "Employers'  Accounting  for   Pensions"  requires
superannuation  expense  to  be  recognised on an accrual basis over the service
period  of  the employees.  Superannuation expense is determined using actuarial
assumptions  and  includes  service costs, interest costs and expected return on
plan  assets.  The difference between the cumulative expense recognised in prior
periods  and  the  contributions  made  by  the Company is reflected as either a
prepaid  asset  or  liability  in  the statement of financial position.  For the
purpose  of  preparing  these  statements, the Company adopted the provisions of
SFAS  87  effective  1 January 2000, the beginning of the first period for which
U.S. GAAP financial information has been presented.  It was not feasible for the
Company  to  adopt  SFAS 87 at 1 January 1989, the standard's effective date for
the  Company.  On  1  January 2000, the Company recognised a transition asset of
$2.3  million  and  a  deferred tax liability of $0.7 million with corresponding
adjustments  to  shareholders'  equity.  The  remaining  unrecognised transition
asset  will  be  recognised  during  the  next  four years.  The reconciliations
include  adjustments  to reflect the prepaid pension asset, to recognise pension
benefits  (expense) in the statement of financial performance in accordance with
U.S.  GAAP  offset  by  the  reversal of the pension expense of $3.6 million and
$1.9 million recorded under A GAAP in 2002 and 2001 respectively.

(b)  Stock compensation

The  Company  grants  options  to  permanent  employees, executive directors and
employees  of associates under the BRL Hardy Option Plan.  The options vest upon
grant and are exercisable three years after grant if the weighted average market
price  of  an  ordinary  share  increases  by 10% over the exercise price of the
option.

In  2001  the  Company  granted  ordinary   shareholders  and   option   holders
renounceable  rights  on  a  one  for ten basis to purchase additional shares at
$9.30  per  new  share.   The  rights  granted  to  the  option  holders  become
exercisable  if  the  preconditions for the exercise of the related options have
been met.

Under  A  GAAP, no compensation costs are recognised in the financial statements
for shares and options granted to employees.

The  Company  has  elected  to  account  for  the plan in accordance with APB 25
"Accounting  for  Stock  Issued  to  Employees" (APB 25) for U.S. GAAP purposes.
Under  APB  25, options granted under the plan are considered variable until the
weighted average market price increases by 10% over the exercise price, at which
time  the  compensation  element becomes fixed.  For variable plans compensation
expense  is recognised as the difference between the market price of an ordinary
share  and the exercise price of the option over the vesting period.  Under U.S.
GAAP,  compensation  expense  is  also  recognised  for  the renounceable rights
granted  to  employees,  in  a  similar  manner  to  that  described above.  The
reconciliations  include  adjustments  to recognise compensation cost under U.S.
GAAP and the corresponding increase to paid in capital.

(c)  Insurance Receivable

In 2002 the Company recognised an insurance receivable for loss of inventory and
related  costs  resulting  from  faulty  taps  provided by a third party vendor.
Under  A  GAAP, a receivable is recorded when recovery is considered more likely
than  less  likely to be received.  Under U.S. GAAP, an insurance receivable for
losses  incurred  is  recognised  in the statement of financial performance only
when  realisation  of  the  claim  is  deemed  likely to be received.  Insurance
receivables  for  losses  not  yet  recognised  in  the  consolidated  financial
statements   are  recognised   when  received.   The   reconciliation   includes
adjustments  to  reverse the insurance receivables and income recognised under A
GAAP in 2002.

(d)  Capitalisation of borrowing costs to inventory

The  Company  capitalises  interest  costs to wine stocks that take greater than
twelve  months  to  be  prepared for sale in accordance with the requirements of
AASB 1036 "Borrowing Costs".

Under U.S. GAAP, interest  costs  are  not  capitalised to inventory unless  the
inventory  is  constructed or produced as a discrete project for which costs are
separately  accumulated  and  where construction of the asset takes considerable
time  and  entails substantial expenditures.  The preparation and ageing process
for  wine  stocks  does  not  meet  this  criteria.  The reconciliations include
adjustments  to  remove  the  amount of interest capitalised to inventory and to
reverse the net impact to profits.

(e)  Grape vines and inventory

Effective  1  January  2000  the Company changed its accounting policy for grape
vines  from  historical  cost  to  net market value in accordance with AASB 1037
"Self-Generating  and  Regenerating  Assets".  Any  change  in  market  value is
recognised  in  the statement of financial performance.  At harvest the fruit is
transferred to inventory at net market value.

Under  U.S.  GAAP,  grape  vines  and  inventory  are recorded at acquisition or
production  cost.   The  reconciliations  include  adjustments  to  reverse  the
cumulative  effect  of  the  adoption  of  AASB  1037  in  2000;  to restore the
historical  carrying  value of the assets; to reverse the mark-to-market impacts
on  the  statement  of financial performance; and to include depreciation of the
grape vines.
                                                                         Page 38


NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 38.  RECONCILIATIONS TO U.S. GAAP (CONTINUED)

(f)  Goodwill amortisation

Under  A GAAP, goodwill is amortised on a straight line basis over the period of
time  during  which  benefits  are  expected  to arise but no longer than twenty
years.

Under  U.S. GAAP, the Company  would  have  been  required to  cease  amortising
goodwill  effective  1  January  2002  as goodwill is no longer amortised but is
reviewed annually for impairment in accordance with the requirements of SFAS No.
142  "Goodwill  and  Other  Intangible Assets".  The Company's assessment of the
carrying value of goodwill did not indicate an impairment in its carrying value.
The  reconciliations  include  an adjustment to reverse the amortisation expense
recognized under A GAAP in 2002.

(g)  Revenue recognition

The Company recognises revenue for domestic sales upon despatch to the customer.

Under  U.S.  GAAP, SAB 101 "Revenue Recognition in Financial Statements" revenue
cannot  be  recognised  until legal title and the risks and rewards of ownership
have  been  transferred.  The reconciliations include adjustments to reverse the
revenue  recognised under A GAAP; to reverse the corresponding trade debtors; to
restore inventory; and to reverse the cost of sales.

In the normal course of business the Company provides customers with  volume and
quantity  discounts,  retail  display  allowances  and  cooperative  advertising
allowances.  The  cost of these programs are recognised in selling, distribution
and marketing expenses in the statement of financial performance.

Under  U.S. GAAP and in accordance with EITF 01-09 "Accounting for Consideration
Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products)"
these  expenditures  have  been  reclassified  as  a  reduction  of revenue.  In
applying EITF 01-09 the Company's total revenues for the years ended 31 December
2002 and 2001 would be reduced by $88.9 million and $56.8 million, respectively,
with  corresponding  decreases  to selling, distribution and marketing expenses.
This  difference in treatment does not impact net profit attributable to members
or shareholders' equity.

(h)  Purchase accounting for Nobilo

During  2000, the Company purchased in several stages the remaining 75% interest
in  Nobilo Wine Group Limited for $4.6 million and 4.1 million BRL Hardy shares.
Under  A  GAAP,  the  fair  value  of  the 4.1 million shares issued as purchase
consideration  was  determined  at  each  share exchange date.  The costs of the
acquisition  are  allocated  to  the  assets and liabilities acquired, including
inventory,  using  the  purchase  method  and  measured  at their estimated fair
values.  A  GAAP  is  not  prescriptive in the method used to determine the fair
values of individual assets and liabilities acquired.

Under  U.S. GAAP, the fair value of securities issued for purchase consideration
is  equal to the market price of the shares a few days before and after the date
the  terms of the acquisition are agreed to and announced. The purchase price is
allocated  to  the  assets  acquired  and  liabilities  assumed  based  on their
estimated  fair  values.  APB  16 "Business Combinations" provides that the fair
value  of  finished goods inventory is calculated as the estimated selling price
less  the  sum  of  costs  of disposal and a reasonable profit allowance for the
selling  effort  of  the  acquiring  entity.   The fair value of work in process
inventory  is  calculated  as the estimated selling price of finished goods less
the  sum  of  costs  to  complete,  costs  of  disposal, and a reasonable profit
allowance for the completing and selling effort of the acquiring entity based on
profit for similar finished goods.

The  reconciliations  include adjustments to reflect the increased purchase cost
under U.S. GAAP, resulting from the difference in the method used in determining
the  fair  value  of  the shares issued, the difference in the fair value of the
inventory  acquired  and  the recognition of derivative contracts at fair value,
net of goodwill amortisation.

(i)  Derivative instruments

The Company enters into forward foreign exchange contracts and options to  hedge
the  exchange  rate  risk  on  foreign  currency receivables and payables and on
anticipated  foreign  currency sales and purchases.  Gains and losses on forward
foreign  exchange  contracts that qualify for hedge accounting are accounted for
on  the  same  basis as the underlying physical exposures being hedged.  Foreign
currency receivables and payables that are hedged under forward foreign exchange
contracts are translated at the end of the reporting period at the exchange rate
fixed in the hedge contract.

Gains  or  losses  on  foreign  currency receivables and payables are recognised
currently in the statement of financial performance.  Gains or losses arising on
forward foreign exchange options and contracts intended as hedges of anticipated
transactions are deferred and recognised when the underlying transactions occur.
As  at  31  December  2002, the Company recognised on the statement of financial
position  for  the  first  time, deferred  gains and losses arising from forward
foreign  exchange  options  and  contracts  intended  as  hedges  of anticipated
transactions as a net asset or liability with a corresponding equal and opposite
net  asset  or  liability  in  accordance  with  AASB  1012   "Foreign  Currency
Translation".

The  Company  enters  into  interest  rate contracts, swaps and options to hedge
against  movements  in  interest  rates  and  to  minimise the volatility of the
Company's  profit and net cash flows arising from changes in interest rates. The
terms  of the interest rate contracts are intended to match the maturity profile
of the underlying debt.

The cash flows required under interest rate swaps are settled on a net basis and
either  recognised in the statement of financial performance as interest expense
as  they  occur  or  included  in  the  carrying  amount  of  assets  through
capitalisation of borrowing costs.

                                                                         Page 39



NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 38.  RECONCILIATIONS TO U.S. GAAP (CONTINUED)

(i)  Derivative instruments (continued)

Effective  1  January  2001,  the  Company  adopted SFAS No. 133 "Accounting for
Derivative  Instruments  and  Hedging  Activities",  as  amended.  SFAS  No. 133
requires  derivatives  to  be recorded at their fair value as either an asset or
liability  in  the  statement  of  financial  position.   Gains  or  losses   on
derivatives  which qualify and are effective as cash flow hedges are accumulated
in  equity  as other comprehensive income and are recognised in the statement of
financial  performance  when  the hedged transaction occurs.  Gains or losses on
non-qualifying  derivatives  are  recognised  in  the  statement  of   financial
performance  immediately.  Gains  or  losses  on  fair  value  hedges and on the
underlying  item  being  hedged  are also recorded in the statement of financial
performance.  Although  SFAS  No.  133  permits  hedge  accounting for hedges of
forecasted  transactions, the Company had not met the restrictive documentation,
designation  and  effectiveness  assessments  required under SFAS No. 133.  As a
result,  the derivative contracts used to hedge forecasted transactions continue
to be marked to market through the statement of financial performance.

The  Company  did  not  meet  the  restrictive  documentation,  designation  and
effectiveness  assessments  required  under  SFAS  No. 133 for its interest rate
contracts.  As  a  result,  upon  adoption  of SFAS 133, a transition adjustment
equal  to  the  fair  value  of  the  interest  rate  contracts  was recorded in
shareholders'  equity.  Subsequent  movements  in the fair value of the interest
rate  contracts  are  recognised in the statement of financial performance.  The
transition adjustment is reclassified from shareholders' equity to the statement
of  financial performance over the life of the contracts existing at transition.

The  application  of  U.S.  GAAP,  results  in the recording on the statement of
financial  position  of  liabilities of $56.5 million and $70.8 million as at 31
December  2002  and 2001, respectively, and assets of $3.0 million and nil as at
31  December  2002 and 2001, respectively.  In reconciling to U.S. GAAP, the net
liability  in  relation  to  deferred  losses  and  the corresponding  equal and
opposite  asset  arising  on  forward  foreign  exchange  options  and contracts
intended  as  hedges  of anticipated transactions recognised on the statement of
financial  position  under  A  GAAP  of $22.0 million and $66.4 million as at 31
December  2002  and  2001,  respectively,  would have been reversed, with no net
impact in reconciling to U.S. GAAP net profit or shareholders equity.

During  June  2002,  the  Company  entered into a foreign currency derivative to
hedge  its  investment  in a foreign subsidiary.  At the inception of the hedge,
the  Company  did  not  meet  the  restrictive  designation  and   effectiveness
requirements  of  SFAS  No.  133.  The  reconciliations  include  adjustments to
recognise  the  derivative  instrument  at fair value and to reverse the amounts
recognised in the currency translation reserve and earnings under A GAAP.

(j)  Investment in GSI Holdings

The  Company has recorded its investment in 100% of the preference shares in GSI
Holdings  at  historical  cost.  Dividend  income  is  recognised when declared.

Under  U.S.  GAAP,  the  assets  and  liabilities  of  GSI  Holdings  would   be
consolidated  as  the  ordinary  shareholder  has not made a substantive capital
investment and substantially all the risks and rewards of ownership are retained
by  the Company.  In addition, GSI Holdings' significant asset, consisting of an
approximate  17.9%  interest in the International Wine Investment Fund, would be
accounted  for  using  the  equity method.  As at 31 December 2002 and 2001, the
International  Wine  Investment  Fund  held   approximately   10.4%  and  11.6%,
respectively, of the outstanding ordinary shares of the Company.

Under U.S. GAAP, the cross shareholding would  be treated  as treasury stock and
recorded  in shareholders' equity.  Corresponding adjustments would also be made
to  dividends  paid  and the weighted average number of shares outstanding.  The
U.S.  GAAP  reconciliations include adjustments to record the cross shareholding
as  treasury  stock;  to  account  for  the  interest  in the International Wine
Investment   Fund using  the  equity  method; to  reverse  the  dividend  income
recognised  under  A  GAAP for dividends received from GSI Holdings; to increase
the carrying value of the equity investment in the International Wine Investment
Fund for dividends paid on Company shares; and to record the purchase or sale of
additional  shares   by  the  International  Wine  Investment  Fund  as   equity
transactions.  The  treasury  stock  method  decreases  the  basic  and  diluted
weighted average number of shares outstanding for earnings per share purposes by
3,312,843 shares in 2002 and 3,973,156 shares in 2001.

(k)  Deferred income taxes

The  Company  recognises  deferred  income  taxes  using the liability method of
tax-effect   accounting,   adjusting  for   permanent   differences.   Tax  loss
carry forwards are  recognised  when  realisation is virtually certain.  Certain
deferred  tax liabilities which do not reverse for many years are discounted and
recognised at net present value.

Under U.S. GAAP, SFAS 109 "Accounting for Income Taxes" requires the recognition
of  deferred  tax  assets and liabilities for temporary differences between book
and  tax  balances  and  the  recognition  of  deferred  tax assets for tax loss
carry forwards and  credits if realisation is more likely than not.  Discounting
of deferred tax assets or liabilities is not permitted.  Deferred tax assets and
liabilities are adjusted for changes in tax rates in the period of enactment.

The  U.S.  GAAP  reconciliations  include  adjustments  to reverse the impact of
discounting;  to  recognise  as  temporary   differences   certain   adjustments
classified  as  permanent under A GAAP; and to recognise the change in tax rates
in the period of enactment.

In addition, the U.S. GAAP  reconciliations include  adjustments to reflect  the
SFAS 109 tax impact of the U.S. GAAP differences.

                                                                         Page 40



NOTES TO THE FINANCIAL STATEMENTS
---------------------------------

NOTE 38.  RECONCILIATIONS TO U.S. GAAP (CONTINUED)

(l)  Revaluation of property, plant and equipment

The Company periodically revalued land and buildings to the directors' valuation
based  on  independent  valuers' estimates of fair value in accordance with AASB
1041  "Revaluation  of  Non-Current Assets" which permits use of either the cost
basis  or  the  fair value basis to measure non-current assets. Under U.S. GAAP,
property,  plant  and  equipment are recorded at acquisition cost.  Revaluations
are  not  permitted.  The  reconciliations  include  adjustments  to  remove the
effects  of the revaluations including the increased value of the assets and the
adjustments  recognised  through  retained  profits for the change in accounting
principle.  The  impact of the revaluations on depreciation expense and on gains
(losses) from disposal are not significant (the revaluations relate to land) and
have not been adjusted.

(m)  Minority interest

Under  A  GAAP,  outside  interests  in  controlled  entities  are recorded as a
component  of  shareholders'  equity.  Under  U.S.  GAAP,  outside  interests in
controlled entities are recorded outside of shareholders' equity.

(n)  Dividends

Effective  1 January 2002, the Company recorded dividends in the period declared
in  accordance with the requirements of AASB 1044 "Provisions, Contingent Assets
and  Contingent  Liabilities".  This  is  consistent with U.S. GAAP.  Prior to 1
January  2002, the Company provided for dividends expected to be declared by the
directors post year-end and deducted the amount from shareholders' equity at the
end  of the relevant accounting period.  The reconciliations include adjustments
to reverse the provision for dividends expected to be declared as at 31 December
2001.

(o)  Equipment leases

The  Company  entered  into certain sale-leaseback transactions with a financial
institution beginning in 1998.  Under A GAAP, the equipment was removed from the
balance sheet and the leasebacks accounted for as operating leases.  No gains or
losses were recognised on the sales.

Under  U.S.  GAAP, the transactions do not qualify for sale-leaseback accounting
because  of  continuing  involvement  by  the  lessee;  specifically, the leases
provide  the Company with an option to repurchase the property at the end of the
lease  term.  Under  U.S.  GAAP, the arrangement is accounted for as a financing
lease.  Accordingly,  in  reconciling  to U.S. GAAP, the Company would recognise
equipment  of  $28.6  million and $30.4 million as at 31 December 2002 and 2001,
respectively,  and  liabilities  of  $27.0  million  and  $29.2 million as at 31
December  2002  and  2001,  respectively.  The  difference in treatment does not
result in a material adjustment to profit.


(p)  Statement of cash flows

Under both Australian and US GAAP, a statement of cash flows is presented, which
discloses  cash  flows from operating, investing and financing activities. Under
US GAAP, bank overdrafts would be reflected as a financing activity.

Presented  below  is summarised cash flow information in accordance with US GAAP
for the years ended 31 December 2002, 2001.




CASH FLOWS IN ACCORDANCE WITH US GAAP
                                                   YEAR ENDED 31 DECEMBER
                                                      2002          2001
                                                     $'000         $'000
                                                   --------      --------
                                                           
Cash flows (used in) from operating activities      (45,147)       21,842
Cash flows used in investing activities             (83,084)     (306,260)
Cash flows from financing activities                132,045       303,817
Exchange rate adjustment on beginning cash               74           480
                                                   --------     ---------
Net increase (decrease) in cash                       3,888        19,879
Opening cash                                         39,665        19,786
                                                   --------     ---------
Closing cash                                         43,553        39,665
                                                   ========     =========


                                                                         Page 41


DIRECTORS' DECLARATION
----------------------

The  directors  declare  that  the  financial  statements  and  notes  1  to 37:

(a)   comply with the  Corporations Act 2001,  Australian  Accounting  Standards
      and other mandatory professional reporting requirements; and

(b)   give a true and fair  view of  the financial  position  as at  31 December
      2002 and 31 December 2001 of BRL Hardy Limited and the consolidated entity
      and  of their performance, for the two years ended on 31 December 2002 and
      31 December 2001.

In  the  directors'  opinion,  there  are reasonable grounds to believe that BRL
Hardy  Limited  will  be able to pay its debts when they become due and payable.


This  declaration  is  made  in  accordance  with a resolution of the directors.



/s/ Stephen Millar                                 /s/ Angus Kennedy

Stephen Millar                                     Angus Kennedy
Director                                           Director


Reynella
As at 6 March 2003 (except for Note 37 for which the date is 23 April 2003)

                                                                         Page 42


REPORT OF INDEPENDENT ACCOUNTANTS


To the members of BRL Hardy Limited

In  our  opinion, the accompanying consolidated statements of financial position
and  the related consolidated statements of financial performance and statements
of  cash  flows present fairly, in all material respects, the financial position
of  BRL  Hardy  Limited  and  its  controlled  entities (the "Company") as at 31
December 2002 and 2001, and the results of their operations and their cash flows
for  each  of  the two years in the period ended 31 December 2002, in conformity
with  the   Corporations  Act,   Australian  Accounting  Standards   and   other
authoritative  pronouncements  of  the  Australia Accounting Standards Board and
Urgent  Issues  Group  Consensus  Views (collectively "A GAAP"). These financial
statements   are   the  responsibility   of   the  Company's   management;   our
responsibility  is  to express an opinion on these financial statements based on
our  audits.  We  conducted  our  audits  of these statements in accordance with
auditing  standards generally accepted in Australia and the United States, which
require  that we plan and perform the audit to obtain reasonable assurance about
whether  the  financial  statements  are free of material misstatement. An audit
includes  examining,  on  a  test  basis,  evidence  supporting  the amounts and
disclosures  in  the  financial  statements, assessing the accounting principles
used  and  significant  estimates made by management, and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

Accounting  principles  generally  accepted  in   Australia  vary   in   certain
significant respects from accounting principles generally accepted in the United
States.  The  application of the latter would have affected the determination of
consolidated  net  profit attributable to members expressed in Australia Dollars
for  each  of  the  two  years  in  the  period  ended  31 December 2002 and the
determination  of consolidated equity also expressed in Australian Dollars as at
31  December  2002  and  2001  to  the  extent  summarised  in  Note  38  to the
consolidated  financial  statements.


/s/ PricewaterhouseCoopers

PricewaterhouseCoopers
Chartered Accountants


/s/ AG Forman

AG Forman
Adelaide, Australia
6 March 2003 (except for notes 37 and 38 for which the date is 23 April 2003)




Liability  is  limited  by  the  Accountant's  Scheme  under  the   Professional
Standards Act 1994 (NSW)

                                                                         Page 43


                  UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

     On  January  17,  2003,  Constellation Brands, Inc. ("Constellation" or the
"Company")  and  BRL  Hardy Limited, now known as Hardy Wine Company Limited, an
Australian  corporation  ("Hardy"),  entered  into  an  agreement  to  effect an
acquisition  of  all  of  the  outstanding  shares  of  Hardy by a wholly-owned,
indirect subsidiary of Constellation.  On March 27, 2003, Constellation acquired
control  of  Hardy's  Board of Directors pursuant to the terms of the agreement.
On  April  9,  2003,  the  Company  completed  its acquisition of all of Hardy's
outstanding  capital  stock (the "Hardy Acquisition").  Total consideration paid
in  cash  and  Class  A  Common  Stock  to  the Hardy shareholders was valued at
$1,137.4 million for accounting purposes.  The Class A Common Stock consisted of
3,288,913  shares which were valued at $77.2 million.  Additionally, the Company
recorded  direct  acquisition  costs of $20.0 million.  The acquisition date for
accounting  purposes  is  March  27,  2003,  the  date  which coincides with the
assumption of control by Constellation.  The Company has recorded a $1.6 million
reduction  in  the  purchase  price  to  reflect  imputed  interest  between the
accounting acquisition date and the final payment of consideration.

     The  following  unaudited  pro forma combined financial data of the Company
consists  of  (i)  an unaudited pro forma condensed combined balance sheet as of
February  28,  2003  (the  "Pro Forma Balance Sheet"), and (ii) an unaudited pro
forma  combined  statement  of  income for the year ended February 28, 2003 (the
"Pro  Forma Statement of Income" and, collectively, the "Pro Forma Statements").

     Constellation's  February 28, 2003 information was derived from its audited
consolidated  financial  statements  filed in its Annual Report on Form 10-K for
the  fiscal year ended February 28, 2003. Constellation's historical information
was prepared using accounting principles generally accepted in the United States
("U.S. GAAP") and United States Dollars ("US$" or "$").

     Hardy's  information  was  derived  from its audited consolidated financial
statements  as  of  and  for  the  fiscal  year ended December 31, 2002. Hardy's
historical  information  was  originally  prepared  using  accounting principles
generally accepted in Australia, which differs in certain material respects from
U.S.  GAAP,  and Australian Dollars ("A$"). This historical information has been
modified  to  present  Hardy's  information  in  conformity  with  the financial
statement  presentation  of  Constellation,  using U.S. GAAP and US$. The US$/A$
exchange  rate used to convert information as of December 31, 2002, was $0.5616.
The  average US$/A$ exchange rate used to convert information for the year ended
December 31, 2002, was $0.5440.

     The  Pro  Forma  Balance Sheet is presented as if the Hardy Acquisition was
consummated  on  February  28,  2003.  The  Pro Forma Balance Sheet reflects the
combination  of  the  consolidated balance sheet of Constellation as of February
28,  2003,  the consolidated balance sheet of Hardy as of December 31, 2002, and
pro  forma adjustments. The Pro Forma Statement of Income is presented as if the
Hardy  Acquisition  was consummated on March 1, 2002. The Pro Forma Statement of
Income  reflects  the  combination  of  the  consolidated  income  statement  of
Constellation  for  the year ended February 28, 2003, the consolidated statement
of  Hardy  for  the year ended December 31, 2002, and pro forma adjustments. The
pro  forma  adjustments  include  the consolidation of Pacific Wine Partners LLC
("PWP").  Prior to the Hardy Acquisition, PWP was equally owned by Constellation
and  Hardy.  Consolidation adjustments include the elimination of the effects of
using  the  equity  method of accounting and any applicable elimination entries.
The  pro  forma  adjustments also include the acquisition adjustments to reflect
the  purchase  method  of accounting for the Hardy Acquisition. PWP's historical
information was prepared using U.S. GAAP and US$.

     The  Pro  Forma Statements are for illustrative purposes only and should be
read  in  conjunction  with  the  separate  historical  financial  statements of
Constellation and Hardy and the notes thereto and with the accompanying notes to
the  Pro  Forma  Statements.  The  Pro Forma Statements are based upon currently
available information and upon certain assumptions that the Company believes are
reasonable  under the circumstances. The purchase price allocation is based upon
certain  management estimates and preliminary independent appraisals of the fair
value  of assets acquired and liabilities assumed. These preliminary independent
appraisals include a valuation of property, plant and equipment, and  intangible
assets.  These  amounts  may  differ significantly from the results of the final
independent  appraisals  which  will  also include valuations of inventories and
grape supply contracts. Management has estimated the fair value of the remaining
assets acquired and liabilities assumed.

     The  Pro  Forma  Statements  do  not  reflect  any  expected annual savings
resulting  from any operating synergies anticipated by the Company's management.
The  Pro  Forma  Statements  do  not  purport  to  represent  what the Company's
financial  position  or  results  of  operations would actually have been if the
Hardy  Acquisition  had,  in  fact,  occurred  on  such  dates or to project the
Company's  financial position or the results of operations at any future date or
for any future period.






                                  CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                             UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
                                            AS OF FEBRUARY 28, 2003
                                                (in thousands)


                                                          Historical
                                               ------------------------------     Pro Forma               Pro Forma
                                               Constellation         Hardy       Adjustments               Combined
                                               -------------      -----------    ------------            -----------
               ASSETS
               ------
CURRENT ASSETS:
                                                                                          
  Cash and cash investments                    $      13,810      $    24,459    $      6,328    (a)     $   119,770
                                                                                       75,173    (d)
  Accounts receivable, net                           399,095          108,976          26,906    (a)         534,977
  Inventories, net                                   819,912          303,730          51,952    (a)       1,165,184
                                                                                      (10,410)   (b)
  Prepaid expenses and other                          97,284           12,277           2,175    (a)         116,759
                                                                                        5,023    (b)
                                               -------------      -----------    ------------            -----------
    Total current assets                           1,330,101          449,442         157,147              1,936,690
PROPERTY, PLANT AND EQUIPMENT, net                   602,469          271,324          58,654    (a)         933,168
                                                                                          721    (b)
GOODWILL                                             722,223            5,750          63,958    (a)       1,394,392
                                                                                      602,461    (b)
INTANGIBLE ASSETS, net                               382,428           10,144          73,636    (a)         821,414
                                                                                      355,206    (b)
OTHER ASSETS                                         159,109          137,141              85    (a)          68,087
                                                                                       (3,576)   (b)
                                                                                       27,610    (c)
                                                                                     (252,282)   (a)
                                               -------------      -----------    ------------            -----------
  Total assets                                 $   3,196,330      $   873,801    $  1,083,620            $ 5,153,751
                                               =============      ===========    ============            ===========


   LIABILITIES AND STOCKHOLDERS' EQUITY
   ------------------------------------
CURRENT LIABILITIES:
  Notes payable                                $       2,623                     $     (2,000)   (d)     $       623
  Current maturities of long-term debt                71,264      $    81,881             295    (a)         459,711
                                                                                      306,271    (d)
  Accounts payable                                   171,073           35,388          11,622    (a)         218,083
  Accrued excise taxes                                36,421            1,018             324    (a)          37,763
  Other accrued expenses and liabilities             303,827           73,122          17,744    (a)         444,524
                                                                                        2,370    (b)
                                                                                       47,461    (c)
                                               -------------      -----------    ------------            -----------
    Total current liabilities                        585,208          191,409         384,087              1,160,704
LONG-TERM DEBT, less current maturities            1,191,631          274,132           1,427    (a)       2,298,248
                                                                                      831,058    (d)
DEFERRED INCOME TAXES                                145,239            5,243         120,130    (b)         270,612
OTHER LIABILITIES                                     99,268           23,916          50,253    (b)         173,437
                                               -------------      -----------    ------------            -----------
  Total liabilities                                2,021,346          494,700       1,386,955              3,903,001
STOCKHOLDERS' EQUITY                               1,174,984          379,101          77,243    (b)       1,250,750
                                                                                         (991)   (b)
                                                                                         (486)   (e)
                                                                                     (379,101)   (f)
                                               -------------      -----------    ------------            -----------
  Total liabilities and stockholders' equity   $   3,196,330      $   873,801    $  1,083,620            $ 5,153,751
                                               =============      ===========    ============            ===========


                       See Notes to the Unaudited Pro Forma Condensed Combined Balance Sheet.



                   CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
               NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED
                      BALANCE SHEET AS OF FEBRUARY 28, 2003
                                 (in thousands)


(a)     Reflects  the  consolidation  of PWP, a  joint venture previously  owned
        equally  by the Company and Hardy, and the elimination of the effects of
        using  the  equity  method  of  accounting  in  the historical financial
        statements.

(b)     Reflects  the  estimated  purchase  accounting adjustments for the Hardy
        Acquisition  based  upon  certain  management  estimates and preliminary
        independent  appraisals  of  the  fair  value  of  assets  acquired  and
        liabilities  assumed. These preliminary independent appraisals include a
        valuation of property, plant and equipment, and intangible assets. These
        amounts  may  differ  significantly   from  the  results  of  the  final
        independent appraisals which will also include valuations of inventories
        and  grape  supply contracts. Management has estimated the fair value of
        the remaining assets acquired and liabilities assumed.

        The purchase price was calculated as follows:

                 Cash paid                            $  1,060,156
                 Value of stock issued                      77,243
                 Direct acquisition costs                   20,000
                 Imputed interest                           (1,626)
                                                      ------------
                   Total purchase price               $  1,155,773
                                                      ============

        The Company issued 3,288,913 shares of Class A Common Stock, which  were
        valued  at  $77,243  based  on  the simple average of the closing market
        price of the Company's Class A Common Stock for the period beginning two
        days  before  and ending two days after April 4, 2003, the day the Hardy
        shareholders  elected  the form of consideration they wished to receive.
        The  cash  paid  amount  includes  $19,256  paid  to Hardy to effect the
        cancellation of all of its outstanding stock options in March 2003, just
        prior  to  the  Hardy  Acquisition.  The  nonrecurring charge of $19,256
        recorded by Hardy to effect this cancellation is not included in the Pro
        Forma  Statement  of  Income.  In  addition,  the Company has recorded a
        $1,626 reduction in the purchase price ($991, net of related tax effect)
        to  reflect  imputed  interest  between the accounting acquisition date,
        March  27,  2003, and the final payment of consideration, April 9, 2003.
        This  charge  is  not reflected in the Pro Forma Statement of Income but
        has  been  reflected  in  the  Company's  first  quarter  of fiscal 2004
        earnings.

        The allocation of the purchase price and the related estimated pro forma
        adjustments are as follows:



                                                        Allocation of
                                                        Purchase Price
                                                        --------------
               Purchase price                          $    1,155,773
                                                       --------------

               Allocation of purchase price:
                 Total current assets                  $      444,055
                 Property, plant and equipment                272,045
                 Intangible assets                            365,350
                 Other assets                                 133,565
                                                       --------------
                   Total assets acquired                    1,215,015

                 Current liabilities                          193,779
                 Long-term liabilities                        473,674
                                                       --------------
                   Total liabilities assumed                  667,453
                                                       --------------
                     Goodwill                          $      608,211
                                                       ==============

        The pro forma adjustments relating to total current assets consist of  a
        decrease  in  the  book  value  of Hardy's inventories of $10,410 and an
        increase  in  current  deferred  tax  assets of  $5,023.  The  pro forma
        adjustments  relating  to  intangible  assets  represent  an increase in
        trademark values. As the trademarks that are being valued have long been
        established,  management  expects  that  these intangible assets will be
        classified  as  indefinite  lived,  and, as such, will not be amortized.
        Consequently,  the  Pro  Forma  Statement of Income does not include any
        additional  amortization expense related to these intangible assets. The
        pro forma adjustment relating to other assets represents the elimination
        of  the  prepaid  pension  asset  of  $3,576  upon  the recording of the
        liability  for the projected benefit obligation in excess of plan assets
        based  upon an actuarial valuation performed as of the acquisition date.
        The  pro forma adjustments relating to current liabilities and long-term
        liabilities  represent   (i)  an  increase  in  current  and   long-term
        liabilities  of  $2,370  and  $48,311,  respectively,  for the estimated
        liability  arising from unfavorable firm purchase commitments assumed at
        the  time  of the acquisition ("adverse grape supply"); (ii) an increase
        in  long-term  pension  liability of $1,942 as a result of the actuarial
        valuation performed as of the acquisition date; and (iii) an increase in
        long-term  deferred  tax  liabilities  of  $120,130. Deferred taxes were
        established for the fair value adjustments on inventories, adverse grape
        supply,  property,  plant  and  equipment, intangible assets and pension
        liability  and  have  been  classified in accordance with the underlying
        asset  or  liability.  As Constellation previously owned 50% of PWP, all
        fair  value  adjustments  related to PWP's net assets are limited to the
        incremental  fair  value acquired in the Hardy Acquisition. Prior to its
        acquisition  by  Constellation, Hardy was in the process of asserting an
        insurance  claim  for loss of inventory and related costs resulting from
        faulty  taps  provided by a third party vendor. No effect has been given
        to  this  matter in Hardy's historical U.S. GAAP financial statements as
        realization  of  the  claim was not deemed likely to be received. No pro
        forma  adjustment  has  been  made in these Pro Forma Statements for the
        claim.  Future recognition of amounts realized under this claim, if any,
        will  be  treated  as a preacquisition contingency, with a corresponding
        reduction to goodwill for accounting purposes.

(c)     As  of  February  28,  2003, the Company had recorded  $5,654 of  direct
        acquisition  costs  in  the  line  items  other assets (debit) and other
        accrued expenses and liabilities (credit). Consequently, this adjustment
        reflects  the  additional  liability  for  direct  acquisition  costs of
        $14,346  (resulting  in  total direct acquisition costs of $20,000), the
        liability  for  deferred  financing costs of $34,064 associated with the
        Hardy  Acquisition financing described in note (d) immediately below and
        the  tax effects of the imputed interest and deferred debt issuance cost
        adjustments.  The  amount  adjusted  to  other  assets  consists  of the
        financing  costs of $34,064, less the $5,654 of direct acquisition costs
        which  were  previously  classified  in  other assets, but are now being
        allocated  to  goodwill as part of the purchase price allocation in note
        (b) above (see $20,000 of direct acquisition costs in the calculation of
        the  purchase  price)  and  the $800 reduction of deferred debt issuance
        costs described in (e) below.

(d)     Reflects the Hardy Acquisition financing, refinancing  of the  Company's
        then  existing  credit  agreement  (notes  payable  and  term loans) and
        refinancing  of  Hardy's  long-term debt. Proceeds in excess of the cash
        paid  at  closing  of  $75,173  were  available  for  general  corporate
        purposes.  The  Hardy Acquisition financing was completed in April 2003.
        The sources and uses of funds are as follows:

           Sources of funds:
             Proceeds from the Credit Agreement - current       $     50,000
             Proceeds from the Credit Agreement - long-term        1,150,000
             Proceeds from the Bridge Loan Agreement - current       400,000
                                                                ------------
                 Total sources of funds                         $  1,600,000
                                                                ============

           Uses of funds:
             Cash purchase price                                $  1,060,156
             Repayment of notes payable                                2,000
             Repayment of term loans - current portion                67,082
             Repayment of term loans - long-term                      78,281
             Repayment of Hardy's debt - current                      76,647
             Repayment of Hardy's debt - long-term                   240,661
             Excess cash drawn down                                   75,173
                                                                ------------
               Total uses of funds                              $  1,600,000
                                                                ============

(e)     Reflects  the   write-off,  net  of  tax  effect,  of  the  portion   of
        unamortized  deferred  debt  issuance  costs attributable to lenders who
        will  no  longer  be participating in the Credit Agreement subsequent to
        the Hardy Acquisition.

(f)     Reflects the elimination of Hardy's stockholders' equity.




                                  CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                                UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
                                     FOR THE YEAR ENDED FEBRUARY 28, 2003
                                     (in thousands, except per share data)

                                                          Historical
                                               ------------------------------     Pro Forma               Pro Forma
                                               Constellation         Hardy       Adjustments               Combined
                                               -------------      -----------    ------------            -----------
                                                                                          
Gross sales                                    $   3,583,082      $   466,019    $    115,602     (a)    $ 4,139,384
                                                                                      (24,349)    (a)
                                                                                         (970)    (a)
Less - Excise taxes                                 (851,470)         (48,394)         (3,012)    (a)       (902,876)
                                               -------------      -----------    ------------            -----------
    Net sales                                      2,731,612          417,625          87,271              3,236,508
Cost of product sold                              (1,970,897)        (291,851)        (69,203)    (a)     (2,301,287)
                                                                                       24,349     (a)
                                                                                        2,450     (a)
                                                                                        3,865     (d)
                                               -------------      -----------    ------------            -----------
    Gross profit                                     760,715          125,774          48,732                935,221
Selling, general and administrative
  expenses                                          (350,993)         (64,728)        (19,058)    (a)       (446,625)
                                                                                       (1,480)    (a)
                                                                                          472     (b)
                                                                                      (12,045)    (e)
                                                                                        1,207     (d)
Restructuring charges                                 (4,764)                                                 (4,764)
                                               -------------      -----------    ------------            -----------
    Operating income                                 404,958           61,046          17,828                483,832
Gain on change in fair value of
  derivative instruments                              23,129            7,231                                 30,360
Equity in earnings of joint ventures                  12,236           12,664         (24,744)    (a)            156
Interest expense, net                               (105,387)         (16,435)            113     (a)       (199,349)
                                                                                      (76,045)    (c)
                                                                                       (1,595)    (f)
                                               -------------      -----------    ------------            -----------
    Income (loss) before income taxes                334,936           64,506         (84,443)               314,999
(Provision for) benefit from income taxes           (131,630)         (19,256)         33,186     (g)       (117,700)
                                               -------------      -----------    ------------            -----------
    Net income (loss)                          $     203,306      $    45,250    $    (51,257)           $   197,299
                                               =============      ===========    ============            ===========


Share Data:
Earnings per common share:
  Basic                                        $        2.26                                             $      2.12
  Diluted                                      $        2.19                                             $      2.05

Weighted average common shares outstanding:
  Basic                                               89,856                            3,289     (h)         93,145
  Diluted                                             92,746                            3,289     (h)         96,035

                          See Notes to the Unaudited Pro Forma Combined Statement of Income.





                   CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
               NOTES TO THE UNAUDITED PRO FORMA COMBINED STATEMENT
                 OF INCOME FOR THE YEAR ENDED FEBRUARY 28, 2003
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


(a)     Reflects  the  consolidation  of  PWP, a joint venture previously  owned
        equally  by the Company and Hardy, and the elimination of the effects of
        using  the  equity  method  of  accounting  in  the historical financial
        statements,  including the elimination of (i) sales and cost of  product
        sold  from  Hardy  to  PWP  of  $20,386;  (ii)  revenues for crush, wine
        production, bottling and storage services provided by PWP to the Company
        of  $3,963;  (iii)  sales  of  grapes  and  concentrate of $970 from the
        Company  to  PWP;  and (iv) charges for other administrative services of
        $1,480  provided  by  the Company to PWP.

(b)     Reflects the elimination of stock-based compensation expense  recognized
        in   accordance  with   FASB  Interpretations  No. 44   ("FIN  No. 44"),
        "Accounting  for  Certain  Transactions Involving Stock Compensation (an
        Interpretation  of  APB Opinion No. 25)" recorded by PWP for the Company
        and  Hardy  options  granted  to employees of PWP, previously considered
        non-employees   under  Accounting  Principles  Board   Opinion  No.  25,
        "Accounting  for  Stock  Issued  to  Employees," resulting in fair value
        measurement in accordance with FIN No. 44.

(c)     Reflects the effects of the Hardy Acquisition financing and  its use  in
        consummating the Hardy Acquisition, including the elimination of certain
        of Hardy's interest expense due to the refinancing of certain of Hardy's
        debt,  the  additional  interest expense incurred on the debt to finance
        the  Hardy  Acquisition  and  the  incremental  interest  expense on the
        Company's  historical borrowings resulting from the higher interest rate
        in  the  Credit  Agreement. In determining the pro forma adjustment, the
        Company  has  assumed interest rates on its LIBOR-based Credit Agreement
        ranging from 4.6% to 5.1% for the pro forma period. The assumed interest
        rate  on  the  Bridge  Loan  Agreement, which has escalation provisions,
        range  from  6.1%  in  the  first three months to 8.4% in the last three
        months  of the pro forma period. The overall effective interest rate was
        5.65%  for  the  pro forma year ended February 28, 2003. The Company has
        recorded  a  $1,626  reduction  in the purchase price to reflect imputed
        interest  between  the accounting acquisition date and the final payment
        of  consideration.  This  charge  is  not  reflected  in  the  Pro Forma
        Statement of Income but will be reflected in the Company's first quarter
        of  fiscal  2004  earnings.  The  Pro Forma Statement of Income reflects
        interest  expense  for  the  Bridge Loan Agreement pursuant to its terms
        despite  the  Company's intention to repay this loan during fiscal 2004.
        Since  the  timing  of  repayment  and  exact  nature  and amount of the
        refinancing  are  not  yet  determinable,  its  impacts  have  not  been
        reflected.

(d)     Reflects the adjustment to depreciation expense related to the  acquired
        property,  plant and equipment of Hardy. These assets have been restated
        at  their  estimated  fair  values  and  depreciated using the Company's
        depreciation  methods  over  the remaining useful lives of the assets as
        identified  in  the  preliminary  independent appraisal. The decrease in
        depreciation  expense of $5,072 was due primarily to longer useful lives
        per  the  preliminary independent appraisal as compared to the estimated
        useful  lives  used  by Hardy, and was allocated to cost of product sold
        and  selling,  general  and  administrative  expenses  as  indicated.

(e)     Reflects incremental  amortization expense associated with the  deferred
        debt issuance costs as follows:

                                            Year Ended
                                           February 28,
                                               2003
                                           ------------
             Credit Agreement              $      3,900
             Bridge Loan Agreement                8,145
                                           ------------
                                           $     12,045
                                           ============

        The deferred debt issuance costs associated  with these  agreements  are
        being  amortized  over  the  life  of the  related  debt.  Deferred debt
        issuance  costs  associated  with  the  Bridge Loan Agreement  are being
        amortized over five months,  the period of time that the Company expects
        the related borrowings to be outstanding.

(f)     Reflects  interest  expense  on  the  present  value  of  adverse  grape
        contracts.

(g)     Reflects the tax effect of the pro forma adjustments using the Company's
        statutory tax rate of 39.3%.

(h)     Reflects  the  issuance  of  3,288,913 shares of the Company's  Class  A
        Common  Stock  given as part of the consideration in consummation of the
        Hardy Acquisition.

                                   SIGNATURES

Pursuant  to  the  requirements  of  the  Securities Exchange Act of  1934,  the
Registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned, hereunto duly authorized.


                                            CONSTELLATION BRANDS, INC.


Dated:  July 17, 2003                       By: /s/ Thomas F. Howe
                                                --------------------------------
                                                Thomas F. Howe, Senior Vice
                                                President and Controller



                                INDEX TO EXHIBITS

Exhibit  No.  Description
-----------   -----------

   1          UNDERWRITING AGREEMENT

              Not Applicable.

   2          PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
              SUCCESSION

   2.1        Implementation Deed dated 17 January 2003 between Constellation
              Brands, Inc. and BRL Hardy Limited (filed as Exhibit 99.1 to the
              Registrant's Current Report on  Form 8-K dated  January 21, 2003
              and incorporated herein by reference).

   2.2        Transaction Compensation Agreement dated 17 January 2003 between
              Constellation  Brands, Inc.  and  BRL  Hardy  Limited  (filed as
              Exhibit 99.2  to the  Registrant's Current Report  on  Form  8-K
              dated January 21, 2003 and incorporated herein by reference).

   2.3        No  Solicitation  Agreement   dated   13 January  2003   between
              Constellation Brands, Inc.  and  BRL  Hardy  Limited  (filed  as
              Exhibit  99.3  to the  Registrant's Current Report  on  Form 8-K
              dated January 21, 2003 and incorporated herein by reference).

   2.4        Backstop   Fee   Agreement   dated   13  January  2003   between
              Constellation Brands,  Inc.  and  BRL  Hardy  Limited  (filed as
              Exhibit  99.4  to the  Registrant's  Current Report on  Form 8-K
              dated January 21, 2003 and incorporated herein by reference).

   2.5        Letter Agreement  dated  6  February 2003  between Constellation
              Brands, Inc. and BRL Hardy Limited  (filed  as  Exhibit  2.5  to
              the  Registrant's  Current  Report  on  Form 8-K dated March 27,
              2003).

   4          INSTRUMENTS  DEFINING  THE  RIGHTS OF  SECURITY HOLDERS, INCLUDING
              INDENTURES

   4.1        Amended and Restated Credit Agreement, dated as of March 19, 2003,
              among Constellation Brands, Inc.  and certain of its subsidiaries,
              the lenders named therein, JPMorgan Chase Bank, as  Administrative
              Agent, and JPMorgan Europe  Limited,  as  London Agent  (filed  as
              Exhibit 4.1  to  the Registrant's Current Report on Form 8-K dated
              March 27, 2003).

   4.2        Amended and Restated Bridge Loan Agreement, dated  as  of  January
              16, 2003  and  amended  and  restated  as of March 26, 2003, among
              Constellation Brands, Inc. and  certain  of  its subsidiaries, the
              lenders  named therein, and JPMorgan Chase Bank, as Administrative
              Agent (filed as  Exhibit 4.2 to the Registrant's Current Report on
              Form 8-K dated March 27, 2003).

   14         CODE OF ETHICS

              Not Applicable.


   16         LETTER RE CHANGE IN CERTIFYING ACCOUNTANT

              Not Applicable.


   17         LETTER RE DIRECTOR RESIGNATION

              Not Applicable.

   20         OTHER DOCUMENTS OR STATEMENTS TO SECURITY HOLDERS

              Not Applicable.

   23         CONSENTS OF EXPERTS AND COUNSEL

   23.1       Consent  of  PricewaterhouseCoopers  dated  July 17,  2003  (filed
              herewith).

   24         POWER OF ATTORNEY

              Not Applicable.

   99         ADDITIONAL EXHIBITS

              Not Applicable.