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Hindustan Breweries & Bottling Ltd.

BSE: 507140 Sector: Consumer
NSE: N.A. ISIN Code: N.A.
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Hindustan Breweries & Bottling Ltd. (HINDBREWERIES) - Auditors Report

Company auditors report

HINDUSTAN BREWERIES AND BOTTLING LIMITED ANNUAL REPORT 2007-2008 AUDITORS' REPORT TO THE MEMBERS OF HINDUSTAN BREWERIES & BOTTLING LIMITED We have audited the attached Balance Sheet of HINDUSTAN BREWERIES & BOTTLING LIMITED as at 31st March 2008 and the related Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 audit. 1. We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit includes, examining on a test basis, evidence supporting the-amounts and disclosure in the; financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. 2. As Required by the companies (Auditor's Report) Order, 2003, issued by the Central Government of India, in terms of Sections 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in the paragraphs 4 and 5 of the said. Order. 3. Further to our comments referred to .in paragraph (1) above we report that: A] We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our Audit; B] In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of the books; C] The Balance sheet and the Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the books of Account; D] In our opinion, the Balance Sheet and the Profit & Loss Account comply with the mandatory Accounting standards referred to in Section 211 (3C) of the companies Act, 1956. E] On the basis of written representations received from the directors of the company and taken on record by the Board of Directors of the Company, we report that none of the Directors is disqualified as on March 31st 2008, from being appointed as Director in term of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; F] We Draw reference to. i) Note no. X4 relating to non provision of (a) accrued liability towards gratuity amounting to Rs. 1,31,17,470/- and (b) Liability towards leave encashment amounting to Rs. 36,34,705. ii) Note no.5 regarding balance of secured loans, unsecured loans, creditors, current liabilities, debtors, loans and advance and certain bank balance being subject to confirmation, reconciliation and adjustment. iii) Note no. 6 & 7 to non provision of doubtful debts of Rs. 102,43,581. iv) Note no. 9 relating to suits filled by and against the company. v) Note no. 10 relating to secured loans being partly secured. vi) Note no. 19 relating to non provision of Managing Director Remuneration amounting to Rs. 900000/- vii) Note no. 20 relating to non provision of Interest on Loan from Bank of Baroda. We further report that without considering Items mentioned in paragraph f(ii), f(iv) and f(v) above the effect of which could not be determine, had the observation made by us in paragraphs f(i), f(iii) and f(vi) above been considered the loss for the year would have been Rs. 170,53,058/- (As against the reported figure of Profit of Rs. 1,08,42,698/-) Debit balance In profit & loss account would have been Rs. 8,61,63,256 (as against the reported figure of Re.5,82,67,500) Liabilities would have been Rs.19,34,46,374/- (as against the reported figure of Rs.17,57,94,199/-) sundry debtors would have been Rs. 3,73,07,937/- (as against the reported figure of Rs.4,75,51,518/-) Subject to the above, in our opinion the accounts present a true and fair view: i] in so far as it relates to the Balance Sheet of the state of affairs of the company as at 31st March, 2008 and ii] in so far as it relates to the Profit and Loss Account of the '0 Profit 0 of the company for the year ended on that date. iii] in the case of Cash Flow statement of the cash flows for the year ended on that date. For SUREN SHAH & CO. Chartered Accountant Place: Mumbal (Suren Shah) Date : 27th August, 2008 M.N. 9295 ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph (1) thereof] 1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. (b) All the assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification. (c) In our opinion, a substantial part of fixed assets has not been disposed of by the Company during the year. 2.(a) Inventory has been physically verified by the Management during the year in our opinion the frequency of verification is reasonable. (b) In our opinion, the, procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) On the basis of our examination of inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to books records were not material. 3. (a) According to the information and explanations the company has taken loans from two parties listing in the register maintained under section 301 of the Companies Act and the total amount outstanding at the end of the year was Rs. 2,04,00,000/- and other term and condition on which such loan are taken are not prima facie prejudicial to the interest of the company. (b) According to the information and explanation given to us the Company has not granted any loans to firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. (c) The company has given interest free loans and advances in the nature of loans to its employees and these are being repaid as stipulated. 4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate .with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods and no major weakness has been noticed in this regard. 5. In respect of contracts or arrangements to be to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us: a) the particulars of contracts or arrangements referred to Section 301 that needed to be entered into the register, maintained under the said section have been so entered. b) When each of such transactions is in excess of Rupees Five lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regards to the prevailing market prices at the relevant time. 6. The company has not accepted any deposit from the public. 7. In our opinion, the company has an adequate internal audit system commensurate with the size and nature of its business. 8. The Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the products of the Company. 9. (a) As per the information and explanations given to us, the company has been regular In depositing undisputed statutory dues Excise Duty, Income Tax, and other statutory dues as applicable except Employee & Employer contribution to ESIC of Rs.1,40,251/- (Since Paid Rs. 0/-) Profession Tax Rs.6,05,465/- (Since Paid Rs.9,370/-) sales tax of Rs. 3,65,71,196 (Since Paid Rs.66,40,163/-), with the appropriate authorities in India. Provident Fund of Rs.15,46,587/- (Since Paid Rs.1,00,000/-) (b) According to records of the company examine by us, there are no dues of customs duty, Wealth Tax, Excise Duty and Sales Tax, which have not been deposited on account of any dispute. The Particulars of dues of income tax as at 31.03.2008 which have not been deposited on accounts of dispute, are as follows: * INCOME TAX Nature of Nature of Amount Periods to Forum where the statute Dues Rs. which the the dispute is amount pending relates The Income Tax Income Tax - A.Y 1998-99 Tribunal Appeal Act, 1961 Pending with CIT (A) The Income Tax Income Tax - A.Y 2.000-01 Appeal Pending Act, 1961 with ITAT The Income Tax Income Tax - A.Y 2001-02 Appeal Pending Act, 1961 with ITAT The Income Tax Income Tax - A.Y 2001-02 Appeal Pending Act, 1961 with CIT (A) The Income Tax Income Tax - A.Y 2002-03 Appeal Pending Act, 1961 with CIT (A) * SALES TAX: Nature of Nature of Amount Periods to Forum where the statute Dues Rs. which the the dispute is amount pending relates The Sales Tax Act, Sales Tax - A.Y 1995-96 Pending with High Court The Sales Tax Act, Sales Tax - A.Y 1998-99 Appeal with deputy Commissioner sales tax Mumbai The Sales Tax Act, Sales Tax - A.Y 2003-04 Appeal with deputy Commissioner sales tax Mumbai The Sales Tax Act, Sales Tax - A.Y 2004-05 Appeal with deputy Commissioner sales tax Mumbai 10. The Company has accumulated losses of Rs. 5,82,67,500/- at the end of the year. The Company has not incurred any cash losses during the year and also in the immediately preceding financial year. 11. Based on our audit procedures and on the basis of information and explanations given by the management the company account is NPA with banks. 12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities. 13. The Provisions of any special statute applicable to Chit Fund, Nidhi or Mutual Fund Benefit Fund/ Societies are not applicable to the Company. 14. The Company is not dealing or trading in shares, securities, debentures or other investments: 15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions. 16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained. 17. Fund raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa. 18. The Company has not made any preferential allotment. 19. The Company has not issued any debentures. 20. The Company has not raised any money by way of public issues during the year. 21. On the basis of our examination of records and according to the information and explanation given to us, no fraud, on or by the Company, has been noticed or reported during the year. For SUREN SHAH & CO. Chartered Accountant Place: Mumbai (Suren Shah) Date : 27th August, 2008 Membership No. 9295