We have audited the attached Balance Sheet of HINDUSTAN BREWERIES &
BOTTLING LIMITED as at 31st March 2011 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. 2 As Required by the companies (Auditor's Report) Order, 2003,
and amended by companies (Auditor Report ) (Amended ) Order 2004, issue
by the Central Government of India, in terms the of Sections 227(4A) of
the Companies Act, 1956,on the basis of such checks of the books of the
records as we considered appropriate and the information and
explanations given to us during the course of the audit, we annex
hereto a statement on the matter specified in paragraph 4 and 5 the
said Order.
3. Further to our comments in the Annexure referred to in paragraph
(3) above, we report that:
i) 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.
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company, so far as appears from our examination of the
books.
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with this report are in agreement with the books of account.
iv) In our opinion and subject to our observation in para (vi) below
the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with this report comply with the Accounting Standards referred to
in sub section 3(c) of section 211 of the Companies Act, 1956.
v) According to the information and explanations given to us and on the
basis of written representations from the directors of the company and
taken on record by the Board of the Company, none of the directors is
disqualified as on 31st March, 2011 from being appointed as a director
under section 274(1 )(g) of the Companies Act, 1956.
vi) i) The Company has not provide accrued liability towards gratuity
amounting to Rs. 1,83,74,026/= and Liability towards leave encashment
amounting to Rs. 45,55,960/= (Refer Note No 4)
ii) The company has not adopted 'Accounting Standard 22-Accounting
for Taxes on Income'. Consequently no provision has been made for
Deferred Tax Liability
iii) The Company has not provided for doubtful debts of Rs. 64,70,769/-
iv) The Company has not provide of Managing Director Remuneration
amounting to Rs. 900000/=
v) In our opinion and to the best of our information and according to
the explanations given to us, subject to our observations in paras (vi)
above, the said accounts read together with the significant accounting
policies and the notes thereon give the information required by the
Companies Act, 1956, in the manner so required and give a true and fair
view
a) In the case of the Balance Sheet of the state of affairs of the
Company as at 31st March,2011,
b) In the case of the Profit and Loss Account, of the profit for the
year ended on date, and
c) In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
The Annexure referred to in the auditors' report to the members of
HINDUSTAN BREWERIES & BOTTLING LIMITED (the Company) for the year ended
March 31,2011. We report that:
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a phased programme of physical verification of its
fixed assets which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. In accordance with
this programme, the management has physically verified fixed assets
during the year and no material discrepancies were noticed on such
verification.
(c) No fixed assets were disposed off during the year. Accordingly
Clause 4(i)(c) of the Order is not applicable.
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) The Company had not granted any unsecured loan to the
companies/person covered in the register maintained under section 301
of the Companies Act, 1956. Accordingly clause 4 (iii) (b) to (d) of
the Order are not applicable to the company.
(e) The company has taken interest free unsecured loan from three other
companies/persons covered in the register maintained under section 301
of the Companies Act, 1956. The maximum amount involved during the year
was Rs 574 lakhs and the year end balance of loans taken from such
parties was Rs. 574 lakhs.
(f) In our opinion the rate of interest and other terms and conditions
on which loans have been taken from companies, firms or other parties
listed in the registers maintained under section 301 are not, prima
facie, prejudicial to the interest of the company.
(g) The Company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest wherever
applicable.
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, fixed assets and with
regard to the sale of goods. During the course of our audit, no major
weakness has been noticed in the internal control.
5. a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the transactions that need to be entered into the register
maintained under section 301 of the Companies Act, 1956 have been so
entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance to contracts or
arrangements entered in the register maintained under section 301 have
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time.
6. Based on our scrutiny of the company's records and according to
the information and explanations provided by the management, in our
opinion, the company has not accepted any public deposits so far up to
31st March, 2011.
7. In our opinion, the company does not have any formal internal audit
system commensurate with the size of the company and the nature of its
business.
8. According to the information and explanations provided by the
management, the company has not been prescribed any cost records under
section 209 (1) (d) of the Companies Act, 1956 in respect of products
manufactured by the company.
9. (a) According to the records of the company, the company is regular
in depositing with appropriate authorities undisputed statutory dues
including income tax and other statutory dues applicable to it.
(b) According to the information and explanation given, no undisputed
amounts payable in respect of income tax, wealth - tax, service, custom
duty and excise duty were outstanding, as at 31st March, 2011 for a
period of more than six months from the date they become payable.
(c) According to the records of the company, there are no dues of sales
tax, income tax, custom tax, wealth tax, excise duty/cess which have
been deposited.
10. The Company does not have accumulated losses as on the date of
balance sheet. The accumulated losses are more than 50% of the
company's net worth. The Company has not incurred any cash losses
during the year covered by our audit and the immediately preceding
financial year.
11. According to the records of the company, the company has not
borrowed from financial institutions or banks or issue debentures
during the financial year ended 31st March, 2011.
12. According to the records of the company, the company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures or other securities.
13. In our opinion, and to the best of our information and according
to the explanations provided by the management, we are of the opinion
that the company is neither a Chit Fund nor a nidhi / mutual benefit
society. Accordingly clause 4 (xiii) of the Order is not applicable.
14. On the basis of our examination of the companies records we are of
the opinion that the company is maintaining adequate records regarding
transaction and contracts regarding trading activities in shares,
securities, debentures and other investments, have been held by the
company in its own name except to the extent of exemption granted under
section 49 of the Companies Act, 1956.
15. According to the records of the company and the information and
explanations provided by the management, the company has not given any
guarantee for loans taken by other from bank or financial institutions.
16. According to the record of the company, the company has not
obtained any term loans from bank or financial institutions.
Accordingly clause 4 (xvi) of the Order is not applicable.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
investment by the company.
18. According to the records of the company and the information and
explanations provided by the management, the company has not made any
preferential allotment of shares to parties and companies covered in
the register maintained under section 301 of the Companies Act, 1956.
19. According to records of the Company, the company has not issued
any debentures.
20. The Company has not raised any money by public issues during the
period covered by our audit report.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
audit.
For Rajiv Pethkar & Associates
Chartered Accountants
(Reg. No. 112738W)
Rajiv Pethkar
Proprietor
(M.N. 046027)
Mumbai; 16th August, 2011.
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