HINDUSTAN BREWERIES AND BOTTLING LIMITED
ANNUAL REPORT 2007-2008
The Directors have pleasure in presenting the 37th Annual Report and the
audited accounts for the financial year ended 31st March, 2008.
(Rs. In lakhs)
FINANCIAL RESULTS: 2007-2008 2006-2007
Sales. 4041.47 2686.25
Profit before Interest & Depreciation 221.97 185.94
Less: Interest 1.94 2.03
Less: Depreciation 107.11 106.84
Profit after Depreciation 112.93 77.07
Less: Provision for Tax (MVAT) 2.60 0.00
Less: Provision for Tax (FBT) 1.90 3.40
Profit after Tax 108.43 73.67
Add: Loss brought forward
from the last year (691.10) (764.77)
Balance carried to Balance Sheet (582.67) (691.10)
During the year under Review the company has brewed beers 92664 Hectoliter
as compared 84667 Hectoliter in previous year. The sales were 4041 lacs
compared to 3626 lacs in previous year. The Company has reduced its
operating loss by implementing effective purchasing policies.
The observation regarding non-provision of gratuity and leave encashment,
it is informed that they are provided in the Books in the year in which it
The observation regarding the non-provision of Managing Director's
remuneration, the company has received approval from Central Government on
6th July 2003 subject to consent from bank. The company has written a
letter to Bank of Baroda for consent as required by Central Government
however same is still pending with Bank of Baroda.
All other remarks made by Auditors in their Report have been suitably dealt
with in the schedule and notes are self-explanatory and therefore, no
requirement of further explanation.
As referred in Auditors report on corporate governance company has not
complied with certain provisions of clause 49 of the listing agreement
specifically with regard to constitution of Audit Committee, Composition of
Directors, and other compliance provisions, reporting requirements etc.,
since company is Sick unit as per provision of SICA Act, 1985 company has
delayed in compliance of provision and reporting requirements however
company in the process of regularizing the same.
Pursuant to Clause 49 of Listing Agreements with the Stock Exchanges, a
report on Corporate Governance with Auditors' Certificate on compliance of
conditions of Corporate Governance and a Management Discussion & Analysis
Report have been attached to form part of the annual Report.
Shri Chandrabhan Agarwal and Shri Vinodkumar Agarwal Directors of the
Company retire by rotation at the ensuing Annual General Meeting and being
eligible offer themselves for reappointment.
ENVIRONMENTAL PROTECTION AND POLLUTION CONTROL:
As required by pollution control laws, the Company has complied with the
provisions of applicable Environmental Laws.
We have established water and air pollution control system at our unit. Our
environmental programme is administered internally by our Engineering
Department and includes monitoring, measuring and reporting compliance,
establishing safety programs and training our personnel in environmental
and safety matters.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
(a) The applicable accounting standards have been followed in the
preparation of the Annual accounts.
(b) Such accounting policies have been selected and applied consistently
and judgment and estimates made reasonably and prudently so as to give a
true and fair view of the state of affairs of the Company as at 31st March
2008 and its loss for the year ended on that date;
(c) Proper and sufficient stare has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 and safe guarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(d) The annual accounts have been prepared on the basis of going concern.
The Company has not accepted any deposit from the public within the meaning
of Section 58A of the Companies Act, 1956 and the rules made there under.
AUDITORS AND THEIR REPORT
The Auditors of the Company M/s. Suren Shah & Co., Chartered Accountants,
retire at the forthcoming Annual General Meeting and being eligible, offer
themselves for reappointment. The Company has received certificate from
them Under Section 224(1-B) of the Companies Act, 1956.
The Company does not have a Whole time Company Secretary in employment as
on the date of Balance Sheet as required by the section 383 A of the
Company's Act 1956.
Industrial relations in the Company continued to be cordial as in the past.
The information as per Section 217(2A) of Companies Act, 1956 read with
Companies (Particulars of Employees) Rules, 1975 as amended w.e.f.
17.04.2002 are not given as none of the employees of the Company is covered
under the said section.
DEMATERIALISATION OF EQUITY SHARES
The Securities and Exchange Board of India (SEBI) on 29th May, 2000 has
notified certain scripts, to be covered under compulsory demat but company
has not yet dematerialized its shares. The company is taking necessary
steps to complete the formalities and expect to complete the same at the
CONSERVATION OF ENERGY TECHNOLOGY AND ABSORPTION FOREIGN EXCHANGE EARNING
In accordance with the requirements of Section 217(1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of particulars in the Report
of Board of Directors) Rules, 1988 a statement showing particulars with
respect to conservation of Energy, Technology Absorption and Foreign
Exchange earnings and Outgo is annexed hereto and forms part of this
Industrial relations on the whole have been cordial and your Directors take
this opportunity to express their appreciation for the sincere efforts put
in by the workers and staff at all levels.
Your directors take this opportunity to place on record their gratitude for
the financial assistance extended by Bank of Baroda. Your directors wish to
place on record their deep sense of appreciation for the dedicated services
of the bank employees at all levels. Your directors also convey their
sincere appreciation to the shareholders, dealers, customers; suppliers and
other business associates for their continued support and the confidence
placed in the management of the company.
For and on behalf of the Board of Directors
Rajendra Kumar Agarwal N.K. Pokharna
Place : Mumbai (Managing Director) (Whole Time Director)
Date : 27th August, 2008.
ANNEXURE `A' TO THE DIRECTORS' REPORT.
Additional information as required under the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rule, 1988.
A. CONSERVATION OF ENERGY
a) Energy Conservation Measures taken:
The company is taking all possible efforts for conservation of energy.
Constant efforts are made through regular / preventive maintenance and
upkeep of the existing electrical equipment to minimize breakdown and loss
of energy. Efforts are also made to use the equipment efficiently thereby
conserving the scares resources. Whatever necessary existing equipment is
replaced with more energy efficient equipment.
b) Additional Investment and proposals, if any, being implemented for
reduction of consumption of energy:
The company has already installed higher efficiency generating sets and
Thermax make Boiler T-100, which have improved the overall efficiency and
enabled substantial saving in energy. c) Impact of measures for reduction
of energy consumption / Energy Conservation The above measures have
resulted in energy saving and consequent reduction in energy cost. d) Total
Energy consumption and Energy consumption per unit of production as
prescribed in Form 'A' - Not applicable
B. TECHNOLOGY ABSORPTION
Efforts made in technology absorption as per Form 'B' of the Annexure.
FORM - B
1. Research & Development (R & D)
Keeping in mind the objectives of Specific area in which (R&D) better
productivity, optimum cost carried out by the Company effectiveness and
yield, the company has been adopting
a. Benefits derived as a result of various techniques from time to time
above R & D developed within its R & D Dept.,
particularly in the Brew House,
b. Future plan of action Fermentation & Lagering sections.
c. Expenditure on R & D
i. Capital -
ii. Recurring -
iii. Total -
iv. Total R & D expenditure as a
percentage of total turnover -
2. Technology absorption, adoption and
a. Efforts, in brief made towards
technology absorption, adoption
and innovation -
b. Benefits derived as a result of the
above efforts e.g. product improvement,
cost reduction, production development;
import substitution, etc. -
3. In case of imported technology imported
during last 5 years reckoned from the Not applicable
beginning of the financial year, following
information may be furnished.
i) Technology imported -
ii) Year of import -
iii) Has technology fully absorbed, -
areas where this has not taken
place, reasons thereof and plan
of action. -
B. FOREIGN EXCHANGE EARNINGS AND OUTGO
1. Activities relating to exports, initiatives taken to increase exports,
developments of new exports markets for products and services, and export
plans. Presently the company is actively exploring the export market and is
receiving encouraging response.
2. Total foreign exchange earned Rs. NIL
Total foreign exchange used Rs. 58,84,519/-
For and on behalf of the Board of Directors
Rajendra Kumar Agarwal N.K. Pokhama
Place : Mumbai (Managing Director) (Whole Time Director)
Date : 27th August, 2008
MANAGEMENT DISCUSSION AND ANALYSIS
The financial statements have been prepared in compliance with the
provision of Companies Act, 1956 and Generally Accepted Accounting
Principles (GAAP) in India along with proper explanation relating to
material departures. The management of the Company accepts the
responsibility for the integrity and objectivity of these financial
statements, as well as for the various estimates and judgements used
therein and the financial statements reflect a true and fair manner the
state of affairs of the Company for the year.
Beer Industry - Profile:
Beer is gaining popularity as an alternative drink to a large section of
Indian society, riding on greater social acceptance, liberal attitude and
rising purchasing power of the fast growing urban middle class. This
section of society prefers Beer against soft drink options but still
remains resistant to the hard alcoholic drinks like wine, whisky and rum.
Beer has a low alcohol content. Pasteurized Beer is free from any
artificial agents, coliform bacteria and other pathogenic microorganisms.:
Beer is a highly cyclical product, just like soft drinks. Put differently,
consumption of beer is linked to weather conditions. People drink beer
during summer. Traditionally, strong beer has been growing much faster than
mild beer. Strong beer constitutes 55 per cent-plus of the overall beer
market. Strong beer is unique to the Indian beer industry. Through strong
beer the industry is responding to meet customer aspirations for value for
money. Localised manufacturing is extremely important in the beer industry
because freight costs are high and there are import-export levies in
interstate movement of beer.
Currently the beer industry is going through a rough phase. Since we have
the capability to pass through this phase we are consolidating our
position. that we believe very strongly that the Indian beer market is set
to explode. Beer sales in India are forecast to grow at a compound annual
growth rate of 17.2% to 2011. So, with the Indian beer industry seeing
steady growth during the last decade, due to strong economic growth
resulting in high disposable incomes, an increase in beer sales In the next
two or three years is expected.
Keeping in view the prevailing trends in the market and in order to have
better utilization of its products, our company has started offering value-
added products to have better sales realization. Barring any unforeseen
circumstances the working of the company will improve in coming years.
In order to compete in the competitive market and to supply quality
product, quality control is exercised at every stage of manufacturing,
starting from incoming raw material up to outgoing finished product.
Testing is done at different stages of manufacturing our well-equipped
laboratory. Efforts are made to achieve the best and scale new heights in
quality through constant learning and continuous improvement, technology up
gradation, comprehensive training and development, which form part of
quality commitment to provide the best product to our valued customers with
motto 'Complete Customers' Satisfaction'.
Being engaged in manufacture of beer segment reporting as prescribed under
AS 17 issued by Institute of Chartered Accountants of India (ICAI) is not
applicable to the Company.
Please refer the Board Report on performance review.
Internal Control Systems and Adequacy:
The company has a proper system of internal control to ensure that all
assets are safeguarded and protected against loss from unauthorized use of
disposition and transaction and transactions are authorized, recorded and
The internal control is supplemented by extensive programme of internal
audit, review by management and documents as per the guidelines and
procedures laid down.
Utmost importance was attached to maintain safety standards in the unit of
the company. No major accident was reported during the year under review.
The company continued to strive its commitments to protect and promote the
environment. On environmental matter, the operational norms prescribed by
Maharashtra Pollution Control Board are strictly followed in the Plant by
Subsidiary & Holding Company:
The Company do not have any holding and subsidiary Company.
The industrial relation with the staff and the workers in the Company
continued to remain cordial and harmonious during the year under review.
The Company recognizes the importance and contribution of Human Resource
for its growth and development and is committed to the development of
people. As on March, 2008, the Company has about 170 employees in it's
various offices and factory.
Statements in the Management Discussions and Analysis describing the
Company's objectives, expectations or predictions may be forward looking
within the meaning of applicable securities, laws and regulations. Actual
results may differ materially from the statements. The important factors
that could influence the Company's operations include cost of fuel,
determination and other dues, changes in Government regulations, tax laws,
economic developments and improvement in the demand of Beer in the domestic
as well as international market and such other factors.