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Hindustan Breweries & Bottling Ltd.

BSE: 507140 Sector: Consumer
NSE: N.A. ISIN Code: N.A.
BSE 05:30 | 01 Jan Hindustan Breweries & Bottling Ltd
NSE 05:30 | 01 Jan Hindustan Breweries & Bottling Ltd

Hindustan Breweries & Bottling Ltd. (HINDBREWERIES) - Director Report

Company director report

HINDUSTAN BREWERIES AND BOTTLING LIMITED ANNUAL REPORT 2007-2008 DIRECTOR'S REPORT Dear Members, 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) WORKING PERFORMANCE 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. AUDITOR'S REMARK 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 is paid. 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. CORPORATE GOVERNANCE 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. DIRECTORS 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 confirm that: (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. PUBLIC DEPOSITS 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. COMPANY SECRETARY 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. EMPLOYEES 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 earliest. CONSERVATION OF ENERGY TECHNOLOGY AND ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO 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 report. INDUSTRIAL RELATIONS: 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. ACKNOWLEDGEMENTS 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 innovation 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 Overviews: 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. Company Policy: 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. Quality Control: 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'. Segment Review: 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. Financial Performance: 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 reported correctly. The internal control is supplemented by extensive programme of internal audit, review by management and documents as per the guidelines and procedures laid down. Safety: Utmost importance was attached to maintain safety standards in the unit of the company. No major accident was reported during the year under review. Environment: 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 the Company. Subsidiary & Holding Company: The Company do not have any holding and subsidiary Company. Industrial Relation: 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. Cautionary Statement: 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.