BALAJI DISTILLERIES LIMITED
TWENTY SIXTH ANNUAL REPORT
Board of Directors Shri R Raghuram
Managing Director
Shri S V Sesha Reddy
Shri V Chandrasekhara Reddy
Company Secretary Shri G Sriraman
Auditors M/s P. A. Reddy & Co.
Chartered Accountants
M/s PKF Sridhar & Santhanam
Chartered Accountants
Bankers
Registered Office & Distillery Division Bye-Pass Road
Poonamallee
Chennai - 600 056
Tamilnadu
Brewery Division Mount Tiruvallur High Road
Aranvoyal Village
Tiruvallur District
Pin - 602 025
Tamil Nadu
Corporate Office 9,Bazullah Road
T.Nagar
Chennai – 600 017, Tamilnadu
Registrar and Share Transfer Agent Cameo Corporate Services Limited
“Subramanian Building”
No.1, Club House Road
Chennai 600 002.
Standard Chartered Bank
1
BALAJI DISTILLERIES LIMITED
CONTENTS
PAGE
NOTICE : 3
DIRECTORS’ REPORT : 4
CORPORATE GOVERNANCE REPORT : 9
AUDITORS’ REPORT : 15
BALANCE SHEET : 20
PROFIT & LOSS ACCOUNT : 21
SCHEDULES TO ACCOUNTS : 22
BALANCE SHEET ABSTRACT &COMPANY'S GENERAL BUSINESS PROFILE : 43
CASH FLOW STATEMENT : 44
STATEMENT RELATING TO SUBSIDIARY COMPANIES : 46
ANNUAL REPORT OF SUBSIDIARY COMPANIES : 47
CONSOLIDATED FINANCIAL STATEMENTS : 70
2
BALAJI DISTILLERIES LIMITED
3
NOTICE is hereby given that the Twenty Sixth Annual
General Meeting of will be
held at Balamandir German Hall, No.17, Prakasam
Street, T.Nagar, Chennai 600 017, on Thursday, the 30th
September, 2010, at 11.00 a.m. to transact the following
business:
To receive, consider and adopt the audited Profit
and Loss Account for the financial year ended 31st
March, 2010, the Balance Sheet as at that date and
report of the Directors and theAuditors thereon.
2. To appoint a Director in the place of
Shri V Chandrasekhara Reddy, who retires by
rotation and being eligible, offer himself for re-
appointment.
Balaji Distilleries Limited
ORDINARY BUSINESS:
1.
NOTICE
3. To appoint Auditors and to fix their remuneration. In
this connection, to consider and, if thought fit, to
pass with or without modification the following
resolution as an ordinary resolution.
“RESOLVED THAT the retiring Auditors,
M/s P A Reddy & Co., Chartered Accountants and
M/s PKF Sridhar & Santhanam, Chartered
Accountants, be and are hereby appointed as
Auditors of the Company to hold office from the
conclusion of this Annual General Meeting until the
conclusion of the next Annual General Meeting or
until the merger of the Company with United Spirits
Limited which ever is earlier, on a remuneration as
may be decided by the Board of Directors.”
Place: ChennaiDate : August 16, 2010
By Order of the Board
Company SecretaryG. SRIRAMAN
1. A Member entitled to attend and vote at the meeting
is entitled to appoint a proxy to attend and vote on a
poll instead of himself and such proxy need not be a
member of the company.
2. The instrument appointing proxy in order to be
effective should be lodged at the Registered Office
of the Company not less than 48 hours before the
meeting.Ablank proxy form is enclosed.
3. The Register of Members and Share Transfer
Books of the Company will remain closed from
27.09.2010 to 30.09.2010 (both days inclusive).
4. Members/Proxies should bring the Attendance slip
duly filled in for attending the meeting. For shares
held in dematerialised form, the DP ID and Client ID
numbers should be indicated in theAttendance Slip.
5. For shares held in physical form, any change in
address/other details may be intimated to the
Company/Share Transfer Agent by quoting the
NOTES:
Folio Number(s). For shares held in demat form,
change in address/other details may be intimated
directly to the Members' DP.
6. Members are requested to send queries, if any, on
the accounts, at least seven days prior to the date of
the meeting, so that the information can be made
available at the meeting.
7. Reappointment of Director:
Shri V Chandraksehara Reddy, Director of the
Company, retires by rotation at the ensuing Annual
General Meeting and being eligible offers himself
for reappointment.
Shri V Chandrasekhara Reddy, 50 years, is a
Director since 29.06.2001. He is a Chartered
Accountant and has about 19 years of experience in
Finance, Accounts and General Management. He
is also a Director in 1) Polar Breweries Limited
2)Star Investments Private Limited and 3) Ador
Computers Private Limited.
BALAJI DISTILLERIES LIMITED
DIRECTORS’ REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
The Directors of your Company present their Twenty
Sixth Annual Report, together with the audited
statement of accounts for the financial year ended 31st
March, 2010.
Your Company earned a gross revenue of
Rs.2,20,430.16 lakhs during the financial year ended
31st March, 2010 as against the gross revenue of
Rs.2,20,127.16 lakhs in the previous financial year
ended 31st March, 2009.
Rs. in lakhs
During the financial year under review, your
Company's Distillery Division achieved a production of
94,42,429 cases of Indian Made Foreign Liquor (IMFL)
(96,04,027 cases in 2008-09) and sold 94,31,118
cases (95,48,874 cases in 2008-09) of IMFL
generating a net revenue of Rs.47,695.70 lakhs (Rs.
49,467.57 lakhs in 2008-09) and your Company's
Brewery division has achieved a production of
89,46,410 cases of Beer and 2,18,690 litres of
Drought Beer (79,44,267 cases beer and 2,31,080
litres of Drought Beer in 2008-09) and sold 89,68,210
cases of Beer and 2,18,690 litres of Drought Beer
PERFORMANCE HIGHLIGHTS
SUMMARY OF FINANCIAL RESULTS
OPERATING RESULTS
2009-2010(financial
year ending31st March
20010) 2 )
Profit / (Loss) before depreciation 232.22 (1170.24)
Less: Depreciation 964.05 835.22
Profit / (Loss) before tax (731.83) (2005.46)
Provision for Tax Nil Nil
Profit /(Loss) after tax (731.83) (2005.46)
Prior period/exceptional items /provision for tax 196.11 2952.67
Profit / (Loss) for the year (535.72) 947.21
Profit / (Loss) brought forward
Loss carried forward from
Less : Transfer from General Reserve 5088.81 5088.81
Accumulated Loss carried to the
2008-2009(financial
year ending31st March
009
from previous years (40053.32) (41000.53)
Profit and LossAccount (40589.04) (40053.32)
Balance sheet (35500.23) (34964.51)
(79,95,624 cases beer and 2,31,080 litres of Drought
Beer in 2008-09) generating a net revenue of
Rs.19,999.12 lakhs (Rs.17,858.35 lakhs in 2008-09).
Your Company has incurred a net loss of Rs.535.72
lakhs for the financial year ended 31st March, 2010 as
against the profit of 947.21 lakhs for the financial year
ended 31st March, 2009, after taking into account
interest, depreciation, prior period adjustments and
exceptional items.
The Company manufactures Indian Made Foreign
Liquor (IMFL) and beer. The IMFL and Beer
manufacturing facility are situated near Chennai. Both
these two products together are some times referred
asAlcoholic Beverages.
Indian Made Foreign Liquor (IMFL) and Beer industries
are “state subject” and as such every State has its own
policies in respect of this industry. Tamilnadu, the state
in which the company operates, has its own policy, both
for manufacture as well as for marketing/distribution.
With the issue of three new licenses by the
Government of Tamilnadu for the production of IMFL
during the last year, there are 9 Distilleries in the State
of Tamilnadu. Out of the new distillery licenses issued,
all the three distilleries have started commercial
production.
There are three breweries in the State of Tamilnadu. In
2008-09, the State Government has also issued one
more license for the manufacture of beer and the unit is
yet to commence commercial operation.
All the products manufactured by these units are sold
to Tamilnadu State Marketing Corporation Ltd
(TASMAC) and TASMAC in turn sell through TASMAC
owned shops. As a preventive measure to curb the
menance of unauthorized movement of liquor from the
neighboring states, TASMAC has started purchasing
the major requirement of IMFL and Beer only from the
units situated within the state. From November 2003,
the State Government has taken over the retail
distribution of IMFL and Beer and accordingly the
entire alcoholic beverages are sold through retail
outlets owned by TASMAC. This move has benefited
the consumers by way of availability of genuine
products at government fixed prices.
MANAGEMENT DISCUSSIONANDANALYSIS
General
INDUSTRY STRUCTUREAND DEVELOPMENT
4
BALAJI DISTILLERIES LIMITED
Within the IMFL segment, the demand is split between
various products such as Whisky, Brandy, Rum, Gin,
Vodka. Within the product segments, the demand is
further split between the premium brands, medium
brands and lower end brands, which are categorized
according to the price. In terms of volume, it is the
brandy and the lower end brands sells more than the
other products and premium and medium brands.
During 2009-10 TASMAC has sold about 412.26 lakhs
cases of IMFL registering a growth rate of 14.95% over
the last year.
During 2009-10 TASMAC has sold about 239.71 lakhs
cases of Beer registering a growth rate of 6.42% over
the last year.
Alcoholic beverages industry is one of the major
contributors to the exchequer by way of State excise
duty, VAT, Excise Label Fee, etc.
During 2009-10, your company has contributed
Rs.1,53,231.92 lakhs to the exchequer of the State
Government.
Alcoholic beverages industry probably is the only
industry, which posts consistent growth year after year
and is not affected by any cyclical factors. With the state
government's efforts to eradicate the evil of illicit liquor,
the demand for medium and lower end brands are
expected to boom in the years to come. Your company
hasalreadymade in roads into lowersegment.
Even though the entry of foreign players was perceived
as a threat long back, it is not considered as a threat
today due to high price of the foreign brands, which
predominantly target the elitist society.
Prohibition is generally perceived as a major threat to
this industry. However, with the state governments
enjoying high revenue from this industry and with the
lesser opportunity to compensate the loss of huge
revenue, we do not anticipate any threat on account of
prohibition.
Today, with the acceptance of social drinking, the
alcoholic beverages industry is likely to grow with the
compounded annual growth rate of 16%. More and
Contribution to the Exchequer
OPPORTUNITIESAND THREATS
OPPORTUNITY
THREAT
OUT LOOK
more foreign players are expected to come into India,
especially in the beer segment and on such foreign
players entering the beer market, this segment is
expected to grow exponentially.
Your Company continues to enjoy a significant market
share in Tamil Nadu in respect of Indian Made Foreign
Liquor and Beer. Barring unforeseen circumstances,
the Company expects to do well in this line of business,
in the coming years.
For alcoholic beverages industry, the significant risk
factor is the purchasing power of individuals and non
existence of brand loyalty. The company is ensuring
that its products are available on the shelf at any point
of time.
The summarised Profit & Loss account of the company
is given below:
RISK AND CONCERNS THE MANAGEMENT
PERCEIVE
FINANCIAL SUMMARY
Rs. in lakhs
2009-2010(financial
year ending31st March
2010)
(A-B) (731.83) (2,005.46)
2008-2009(financial
year ending31st March
2009)
exceptional Items
Sales and services 2,19,944.45 2,19,640.57
Other income 485.71 486.59
Excise Duty and TN Vat 1,52,348.21 1,52,761.73
Cost of Materials 41,522.80 41,742.83
Overheads 23,579.97 23,261.38
Interest 2,746.96 3,531.45
Depreciation 964.05 835.23
Profit/(Loss) before prior period/
Add/(Less) prior period adjustments 1.03
Add/(Less): Exceptional items 196.11 3,147.09
Less: Provision for Fringe Benefit Tax -- 181.93
Less: Provision for Fringe Benefitand Income Tax of earlier years -- 13.52
Profit / (Loss) Before Taxation (535.72) 947.21
Provision for taxation -- –
Profit / (Loss) after Taxation (535.72) 947.21
Total income (A) 2,20,430.16 2,20,127.16
Total (B) 2,21,161.99 2,22,132.62
5
BALAJI DISTILLERIES LIMITED
EXPANSION DETAILS
Brewery Unit:
MERGER OF THE COMPANY WITH UNITED
SPIRITS LIMITED
Swap Ratio
Existing Proposed
SHARE CAPITAL
Expansion of the brewery unit has been completed
during the current year and commercial production
from the new brew house started with effect from
November, 2009.
During the 2008-09, your Board of Directors have
approved the scheme of arrangement interalia
envisaging transfer of brewery division of the company
to Chennai Breweries P Ltd, its wholly owned
subsidiary and merger of residual company consisting
of Distillery division into United Spirits Limited (USL).
The merger shall be effective from 1st April, 2009,
subject to obtaining necessary approvals.
The shareholders of USL have also approved the
Scheme of Arrangement at their meeting held on 21st
April,2010.
However the entire process of merger is delayed due to
delay in obtaining the sanction of BIFR for the Scheme.
The swap ratio in which the shares are proposed to be
allotted by USL is given below:
Equity 2 ( t w o ) e q u i t y s h a r e s o f
share holders Rs.10/- each of USL for every 55(fifty five)equity shares of Rs.10/-each held in BDL
Preference 1 (One) 12.5% Redeemable
share holders (*) Preference Shares of Rs.10/- eachof USL redeemable in March 2014,for every 2 (two) 12.5% CumulativeRedeemable Preference Shares ofRs.10/- each held in BDL
OCCRPS 1 (One) 12.5% Redeemable
holders (*) Preference Shares of Rs.10/- each ofUSL, redeemable in March 2014 forevery 2 (two) 6% OptionallyConvertible Cumulative RedeemablePreference Shares (“OCCRPS”) ofRs.10/- each held in BDL
(*) However your company has redeemed the
preference shares.
On 15.06.2009, your company has allotted 9 crore
Equity Shares to the three investors on receipt of
Rs.111.618 crores being the balance amount payable
on the warrants upon conversion into equity shares.
These shares are yet to be listed in the Stock Exchanges
and due to which are held in the physical form.
On 15.06.2009, your Company has redeemed
4,46,20,900 – 6% Optionally Convertible Cumulative
Redeemable Preference Shares (OCCRPs) of Rs.10/-
each aggregating to Rs.44,62,09,000/- for
Rs.18,02,09,400/- out of the proceeds from the
conversion of warrants in to equity shares.
On 30.06.2009, your Company has also redeemed
15000000 – 12.5% Cumulative Redeemable
Preference Shares of Rs.10/- each aggregating to
Rs.15 crores for Rs.7.50 crores out of the proceeds
from the conversion of warrants into equity shares
The Hon’ble Board for Industrial and Financial
Reconstruction (BIFR) has declared the company as
sick industrial undertaking in terms of section 3(1)(o)
of the Sick Industrial Companies (Special Provisions)
Act, 1985 at its hearing held on 20th December, 2006
and appointed M/s. IDBI Bank Ltd as the operating
Agency (OA). The OA has submitted the revised Draft
Rehabilitation Scheme (DRS) on 5th February, 2009
after taking into account the Scheme of Arrangement
approved by the Board of Directors, which interalia
interalia envisaging transfer of brewery division of the
company to Chennai Breweries P Ltd, its wholly owned
subsidiary and merger of residual company consisting
of Distillery division into United Spirits Limited (USL).
The Hon’ble BIFR has circulated the DRS vide its order
dt 19th February, 2010. Mandatory hearings have
been held on 10th May, 2010, 26th May,2010 and 4th
June,2010 and no creditor has raised any objection for
the DRS. In the meeting held on 4th June, 2010, the
Hon’ble BIFR has reserved its order and directed that
the order will be pronounced on 24th June,2010 in the
Open court. The pronouncement of order was
postponed to 30th June, 2010. On 30th June,2010,
the Hon’ble BIFR has pronounced the order vide which
it has issued certain directions to investors and OA.
The Company preferred an appeal against the order of
BIFR dated 30.06.2010 with the Hon’ble Appellate
Authority for Industrial and Financial Reconstruction
(AAIFR) and obtained stay of the said BIFR order. The
next hearing of the case has been fixed for 16.09.2010.
REFERENCE TO BIFR
INTERNAL CONTROL SYSTEM AND THEIR
ADEQUACY
MATERIAL DEVELOPMENTS IN HUMAN
RESOURCES, INDUSTRIAL RELATIONS FRONT
Your company has established its own internal control
systems and procedures, which ensures maintenance
of proper financial and accounting records. Your
company review the policies and procedures on a
continuous basis for effective internal control.
The company considers the Human Resources as its
6
BALAJI DISTILLERIES LIMITED
most important asset and constantly endeavours to
retain, nurture and groom talent to meet the current
and future needs of the business. The company
currently has 593 employees.
The statement in this report is based on the experience
and information available to the company in its
businesses and assumptions with regard to economic
conditions, Government and regulatory policies. The
performance of the company is dependent on these
factors. It may be materially influenced by various
factors including change in economic conditions,
government regulations, tax laws and other incidental
factors, which are beyond the company's control,
affecting the views expressed in or perceived from this
report.
As the operations of the Company in the current year
have resulted in a loss, your directors do not
recommend any dividend for the financial year ended
31st March, 2010.
Shri V Chandrasekhara Reddy retires by rotation at the
conclusion of the ensuingAnnual General Meeting and
being eligible, offers himself for re-appointment.
The consolidated financial statements and the Annual
Report of the subsidiary companies, viz., BDL
Distilleries Private Limited and Chennai Breweries
Private Limited, together with statement under section
212 of the CompaniesAct, 1956 are annexed.
The Company continues to enjoy cordial relations with
employees of all categories. The Board records its
appreciation of the dedicated efforts put in by the
employees at all levels.
In accordance with the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the
Directors’Report is being sent to all the shareholders of
the Company excluding the annexure prescribed
under Section 217(2A) of the CompaniesAct. The said
annexure, setting out the names and other particulars
of employees, is available for inspection by the
Members at the Registered Office of the Company
during office hours till the date of the Annual General
Meeting, viz., 30.09.2010.
The Company has fully absorbed the technology used
CAUTIONARY STATEMENT
DIVIDEND
DIRECTORS
SUBSIDIARIES
PERSONNEL
PARTICULARS OF EMPLOYEES
CONSERVATION OF ENERGY, RESEARCH &
DEVELOPMENT, FOREIGN EXCHANGE EARNING
ETC. (SECTION 217 (1) (e) OF THE COMPANIES
ACT, 1956)
in the manufacture of the Company's products under
the supervision of the Company's Principals. Except
for the normal quality control activities no research and
development has been carried out. The Company has
not earned any foreign exchange. The company has
also not spent any foreign exchange (Rs.2316 lakhs in
2008-2009) during the year.
M/s. P.A. Reddy & Co., CharteredAccountants and M/s
PKF Sridhar & Santhanam, Chartered Accountants,
Auditors of the Company hold office until the
conclusion of the ensuing Annual General Meeting.
The Auditors have furnished a certificate regarding
their eligibility for their re-appointment as Company's
Auditors pursuant to Section 224 (1B) of the
Companies Act, 1956. The Board recommends their
re-appointment as referred in the Notice to the Share
Holders.
With respect to the various Observations of the
Auditors in their Report, the Board of Directors wish to
express the following views:
(i) As regards non-disclosure of all the particulars
required to be disclosed under clause 32 of the
listing agreement, your directors are of the opinion
that most of the particulars have already been
disclosed by way of transaction with related party
and necessary provision has been made for the
doubtful loans and advances in the previous years
itself.
(ii) As regards non payment of undisputed sales tax
amount of Rs.4548.91 lakhs relating to the
Financial Year 2003-04, interest thereon of
Rs.6710.13 lakhs upto the Financial Year 2009-10
and interest of Rs.1231.83 lakhs upto the
Financial Year 2009-10 in respect of Sales
Tax/VAT relating to other Financial Years and short
deduction of Tax deducted at source of
Rs.6,76239/-, your Company could not make
these payments mainly on account of incurring of
cash losses.
These amounts and the interest on VAT has
already been included in the Draft Rehabilitation
Scheme (DRS) submitted by the Company to the
BIFR/Operating Agency and sought to be paid
over a period of time as mentioned in the DRS.
However, during the mandatory hearing, the state
government insisted for payment of these dues in
one lumpsum under the TN Sales Tax (Settlement
of Arrears) Act,2010. (Samadhan Scheme). The
company is contemplating to pay these dues
under TN Sales Tax (Settlement of Arrears)
Act,2010.
With regard to short deduction of Tax deducted at
source of Rs.6,76239/-, which has arisen on
AUDITORS
7
BALAJI DISTILLERIES LIMITED
8
account of bug in software, your company has
taken up the matter with the software supplier for
effecting suitable corrections.
(iii) As regards small delays in TN VAT remittances,
your company is of the opinion that such delays
are mainly on account of mismatch of the cash
flow. However, delayed remittances were made
within the stipulated period and interest has been
paid on such delayed remittances in accordance
with the provisions of the TN VATAct, 2006.
(iv) Your directors wish to state that in the absence of
availability of working capital, your company has
utilised short term funds for acquisition of assets
for capacity expansion and also for payment of
One Time Settlement commitments and interest to
the banks.
The Company’s shares are listed in the following Stock
Exchanges:
The Madras Stock Exchange Limited
A report on Corporate Governance along with Auditors
Certificate is annexed herewith.
Pursuant to the requirement under Section 217 (2AA)
of the Companies Act, 1956 with respect to Directors’
STOCK EXCHANGES
CORPORATE GOVERNANCE
DIRECTORS’RESPONSIBILITY STATEMENT
Bombay Stock Exchange Limited
The Hyderabad Stock Exchange Limited
Responsibility Statement, it is hereby confirmed:
(i) that in the preparation of the Annual Accounts for
the financial year ended 31st March, 2010, the
applicable accounting standards had been
followed along with proper explanations relating to
material departures;
(ii) that the accounting policies implemented by the
Company have been applied consistently,
judgments and estimates have been reasonable
and prudent thereby giving a true and fair view of
the state of affairs of the Company at the end of
financial year and of the loss of the Company for
the period under review;
(iii) that the Directors have taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets
of the Company and for preventing and detecting
fraud and other irregularities;
(iv) that the annual accounts were prepared for the
financial year ended 31st March, 2010 on a 'going
concern' basis.
The Directors wish to express their sincere thanks for
valuable assistance extended by the Government of
Tamilnadu, Tamilnadu State Marketing Corporation
Limited and Standard Chartered Bank.
The Directors also wish to place on record their sincere
thanks for valuable assistance extended by United
Spirits Limited and United Breweries Limited.
ACKNOWLEDGEMENT
Place : ChennaiDate : August 16, 2010
On behalf of the Board
V. CHANDRASEKHARA REDDYDirector
R. RAGHURAMManaging Director
REPORT ON CORPORATE GOVERNANCE FOR THE
FINANCIAL YEAR ENDED 31ST MARCH, 2010
The report on Corporate Governance forms part of the Directors Report.
The essential elements of Corporate Governance are fairness, transparency, accountability and responsibility to
which your Company continues to remain committed. The Company will endeavour to improve on these aspects on
an ongoing basis.
Executive Director:Shri R Raghuram, Managing Director
Non Executive Directors:Shri S V Sesha ReddyShri V Chandrasekhara Reddy
The Board met six times during the financial year 2009-2010 - on 29th May 2009, 15th June 2009, 30th June 2009,
31st July 2009, 30th October 2009, and 29th January, 2010.
Necessary steps are being taken to broad base the Board so as to ensure optimum combination of executive, non-
executive and independent Directors.
The remuneration paid to the Managing Director is within the ceiling as per the resolution approved by the
shareholders. Details of remuneration and sitting fees paid to the Managing Director and other Directors during the
year ended 31.03.2010 is given below:
The Company has laid down procedures to be followed by the Members of the Board and Senior Management
Personnel for ethical professional conduct.
Adeclaration signed by the Managing Director to this effect is annexed thereto.
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
2. BOARD OF DIRECTORS
a) The Composition of the Board during the year is given below:
b) Details of Attendance at Board Meetings and last AGM and details of memberships in other Boards and
Board Committees:
c) Remuneration of Directors:
d) Code of conduct :
Sl No Name of the Director No. of Whether Membership CommitteeBoard attended in other
Meetings lastAGM BoardsAttended
Name Position Sitting Fees Salary Perquisites Commission Contributionto PF and
Superannuation
1 Shri R Raghuram 5 Yes 2 - 1
2 Shri S V Sesha Reddy 4 No 1 - -
3 Shri V Chandrasekhara Reddy 6 Yes 3 - -
Rs. Rs. Rs. Rs. Rs.
Shri R Raghuram Managing Director --- 33,57,000 7,57,950 --- 8,99,700
Shri S V Sesha Reddy Director --- --- --- —
Shri V Chandrasekhara Reddy Director --- --- --- —
20,000
20,000
BALAJI DISTILLERIES LIMITED
Chairman Membership
9
e) CEO/CFO Certification:
f) Particulars of retiring Directors:
3.AUDIT COMMITTEE
Committee Members No. of Meetings attended
4. REMUNERATION COMMITTEE
5. SHARE TRANSFER/INVESTORS GRIEVANCE COMMITTEE
Committee Members No. of Meetings attended
Certification by CEO and CFO as required under Clause 49(V) of the listing agreement was placed before the Board at
its meeting held on 31.07.2010.
Shri V Chandrasekhara Reddy, is a Director of the Company since 29.06.2001. He is a CharteredAccountant and has
about 19 years of experience in Finance, Accounts and General Management. He is also a Director in 1) Polar
Breweries Limited 2) Star Investments Private Limited and 3)Ador Computers Private Limited.
The functioning and terms of reference of the Audit Committee are as prescribed under section 292A of the
Companies Act, 1956 and the Listing Agreement with the Stock Exchanges including their role, powers, duties,
quorum and frequency of the meeting.
TheAudit Committee of the Company comprises 3 members viz., Shri R Raghuram, Shri S V Sesha Reddy and Shri V
Chandrasekhara Reddy. Shri V Chandrasekhara Reddy acts as Chairman of the Committee. The Company
Secretary acts as Secretary to theAudit Committee.
During the financial year 2009-2010 five meetings were held on 29th May 2009, 30th June 2009, 31st July 2009, 30th
October 2009 and 29th January 2010.
Shri R Raghuram 4
Shri V Chandrasekhara Reddy 5
The terms of reference of Remuneration Committee pertains to determining the company’s policy on and approving
remuneration package to the managerial personnel.
The Remuneration Committee of the Company comprises 3 members viz., Shri R Raghuram, Shri S V Sesha Reddy
and Shri V Chandrasekhara Reddy. Shri V Chandrasekhara Reddy acts as Chairman of the Committee.
During the financial year 2009-2010, there were no remuneration committee meetings held.
During the year the Company has not received any investors complaints requiring redressel.
The Share Transfer/Investor Grievance Committee comprises 3 members viz., Shri R Raghuram, Shri S V Sesha
Reddy and Shri V Chandrasekhara Reddy.
Shri V Chandrasekhara Reddy acts as Chairman of the Committee and Shri G Sriraman, Company Secretary acts as
the Compliance Officer.
13 meetings of Share Transfer/Investors Grievance Committee were held during the year ended 31st March 2010.
Attendance at meetings during the period::
Shri S V Sesha Reddy 7
Shri V Chandrasekhara Reddy 13
As on 31st March 2010, there were no pending share transfers.
Shri S V Sesha Reddy 3
Shri R Raghuram 13
BALAJI DISTILLERIES LIMITED
10
6. GENERAL BODY MEETINGS
Postal Ballot :
7. DISCLOSURES
8. MEANS OF COMMUNICATION
9. GENERAL SHAREHOLDERS INFORMATION
1) Date, time and venue of 26thAGM
2) Financial Year
3) Date of Book Closure
4) Dividend payment date
5) Listing on Stock Exchanges
Location, date and time ofAnnual General Meetings held during the last three years.
Year Location AGM Date Day Time No. of SpecialResolutions passed
No Special Resolutions were passed through Postal Ballot during the last financial year.
Till the date of signing this report, there was no proposal to pass any Special Resolutions to be conducted through
Postal Ballot.
During the year ended 31.03.2010, the Company had no materially significant related party transactions, other than
those mentioned in the Notes on Accounts as is envisaged under the Corporate Governance Code, that may have
potential conflict with the interest of the Company at large.
There has not been any non-compliance, penalties or strictures imposed on the Company by the stock exchanges,
SEBI or any other statutory authority, on any matter related to capital markets, during the last year.
Though there is no separate Whistle Blower Policy, no personnel has been denied to access to theAudit Committee to
air his views.
Management Discussion and Analysis highlighting the business of the company has been mentioned in the Directors
Report.
The Company has adopted all the mandatory requirements and has constituted a Remuneration Committee though
there is no mandatory requirement.
Quarterly results are published in the Trinity Mirror (National Daily) and Makkal Kural (Regional Newspaper).
As per the listing agreement, the Company will provide a soft copy of the Annual Report for the financial year 2009-
2010 to the Stock Exchanges for its dissemination on the Exchange website. The Company has not made any
presentation to institutional investors or to the analysts.
: Thursday, the 30th September 2010, at 11.00 a.m. at Balamandir
German Hall,No.17,PrakasamStreet,T.Nagar,Chennai 600 017
: 1st April to 31st March
: Monday, the 27th September 2010 to Thursday, the 30th
September 2010 (both days inclusive)
: No dividend is being recommended
: (i) Madras Stock Exchange LimitedExchange Building, Post Box No.18311, Second Line Beach, Chennai 600 001Tel:91-44-25224392, 25228951 Fax:91-44-25244897
(ii) The Hyderabad Stock Exchange Ltd6-3-654, SomajigudaHyderabad 500 082.
Fax:91-40-23371696
2006-2007 Balamandir German Hall AGM 12.09.2007 Wednesday 10.00 a.m. 4No.17, Prakasam StreetT.Nagar, Chennai 600 017.
2007-2008 Balamandir German Hall AGM 27.09.2008 Saturday 11.00 a.m. 1No.17, Prakasam StreetT.Nagar, Chennai 600 017.
2008-2009 Balamandir German Hall AGM 30.09.2009 Wednesday 11.00 a.m. NilNo.17, Prakasam StreetT.Nagar, Chennai 600 017.
Tel: 91-40-23371701,
BALAJI DISTILLERIES LIMITED
11
(iii) Bombay Stock Exchange LimitedPhiroze Jheejheebhoy Towers, Dalal StreetMumbai 400 001.
: Paid for the year 2010-11 to the above Stock Exchanges as per
the listing agreement
: INE 453A01013
: BSE : 500035
High Low
April 2009 24.00 19.30 11403.25
May 2009 32.40 18.20 14625.25
June 2009 31.75 22.20 14493.84
July 2009 29.80 23.30 15670.31
August 2009 30.70 23.20 15666.64
September 2009 28.40 24.50 17126.84
October 2009 33.25 25.00 15896.28
November 2009 37.45 30.30 16926.22
December 2009 43.25 36.90 17464.81
January 2010 46.85 39.50 16357.96
February 2010 44.25 38.75 16429.55
March 2010 50.90 41.00 17527.77
: Cameo Corporate Services LimitedSubramanian BuildingNo.1, Club House Road, Chennai 600 002Tel:91-44-28460390 ( 5 lines) Fax:91-44-28460129Email : [email protected]
: The Company's shares are traded in the Stock Exchanges ondematerialised mode. The transfers are normally processedwithin 15-20 days from the date of receipt, if the documents arecomplete in all respects.
: As on 31.03.2010, 34.84% of the Company's sharesrepresenting 4,98,26,400 shares were held in thedematerialised form. The Company's shares are available fortrading in the depository systems of both the NationalSecurities Depository Ltd (NSDL) and Central DepositoryServices (India) Ltd (CDSL).
The 9 crores shares allotted on 15.06.2009 consequent uponconversion of warrants into equity shares are yet to be listed inthe Stock Exchanges. Due to which these 9 crores shares areheld on physical form.
: Shri G Sriraman, Company SecretaryBalaji Distilleries LimitedNo.9, Bazullah Road, T.Nagar, Chennai 600 017, Tamil NaduTel: 91-44-2815 8866/4260 6000Fax: 91-44-42606792 / 4260 6797
: Nil
Tel:91-22-22721233 / 22721234Fax:91-22-22721919, 22723121
6) Listing fees
7) ISIN No.
Stock Code
8) Market Price Data: (Rs.)
Month BSE BSE SENSEX
9) Registrar and TransferAgents:(for both physical and electronic transfers)
10) Share Transfer System
11) Dematerialisation of shares and liquidity
12) Compliance Officer
13) Outstanding GDR/ ADR/Warrants orany convertible instruments
BALAJI DISTILLERIES LIMITED
12
14) Plant Locations Distillery :
Brewery:
15) Registered Office
16) Address for correspondence
17) Distribution of shareholding as on 31st March 2010:
Nominal value of Share holders ShareAmount
18) Categories of Shareholders as on 31st March 2010:
Sl. No Category No. of Shares % to Total Holdings
:Bye-pass Road, Poonamallee, Chennai 600 056. Tamil NaduTel: 91-44-2627 2436/2627 2169 Fax: 91-44-2627 2116
Mount Tiruvallur High Road,Aranvoyal VillageTiruvallur District - 602 025. Tamil NaduTel: 91-44 2762 1187 / 2762 1188 Fax: 91-44-2762 2083
By-pass Road, Poonamallee, Chennai 600 056. Tamil NaduTel: 91-44-26272436/26272169 Fax: 91-44-26272116
: Balaji Distilleries LimitedCorporate Office:No.9, Bazullah Road, T.Nagar, Chennai 600 017, Tamil NaduTel: 91-44-2815 8866/4260 6000Fax: 91-44-4260 6792/4260 6797Email : [email protected]
Rs. Rs. Number % to Total Rs. % to Total
(1) (2) (3) (4) (5)
10 5,000 9088 78.14 17190440 1.20
5,001 10,000 1208 10.39 10536780 0.74
10,001 20,000 556 4.78 8984090 0.63
20,001 30,000 201 1.73 5321860 0.37
30,001 40,000 88 0.76 3209100 0.23
40,001 50,000 108 0.93 5215950 0.36
50,001 1,00,000 167 1.43 12724300 0.89
1,00,001 and above 214 1.84 1366993080 95.58
Total 11630 100.00 1430175600 100.00
1 Promoters, Directors &Associates 17727501 12.40
2 Financial Institutions & Banks 7604779 5.31
3 FIIs 5715662 4.00
4 NRIs/OCBs 127072 0.09
5 Mutual Funds 1299375 0.91
6 Public including Corporates 110543171 77.29
Total 143017560 100.00
The above report was adopted by the Board of Directors at its meeting held on 16.08.2010
BALAJI DISTILLERIES LIMITED
13
BALAJI DISTILLERIES LIMITED
AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE
TO THE MEMBERS OF BALAJI DISTILLERIES LIMITED
subject to non-appointment of required number of
independent directors in accordance with the Clause 49(1)(A) and 49(II)(A) of the Listing Agreement and as
detailed in para 2a) and para 3 of the Directors Report on Corporate Governance,
We have examined the compliance of the conditions of Corporate Governance by Balaji Distilleries Limited, for the
year ended 31st March, 2010 as stipulated in clause 49 of the Listing Agreement of the said Company with the stock
exchanges.
The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination
has been limited to a review of the procedure and implementations thereof adopted by the Company for ensuring
compliance with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion of the
financial statements of the company.
In our opinion and to the best of our information and according to the explanations given to us, and the representations
made by the directors and the management, we certify that
the company has complied
with the conditions of Corporate Governance as stipulated in clause 49 of the above mentioned ListingAgreement.
As required by the Guidance note issued by the Institute of Chartered Accountants of India, we have to state that
based on report given by the Registrars of the Company to Investor Grievance Committee, as on 31st March, 2010,
there were no investor grievance matters against the company remaining unattended/pending for more than 30 days.
We further state that such compliance is neither an assurance as to the future viability of the company nor the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
DECLARATION
It is declared
a) that the Company has laid down a Code of Conduct for all its Board Members and Senior Management
Personnel in terms of Clause 49(1)(D)(i) of the Listing Agreement entered into with the Stock Exchanges where
equity shares of the Company are listed.
b) that the Board Members and Senior Management Personnel have affirmed compliance with the said code for
the period from 1stApril, 2009 to 31st March, 2010.
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
Place: ChennaiDate : August
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
16, 2010
Place : Chennai
Date : 16, 2010AugustR.RAGHURAM
Managing Director
14
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P. A. REDDY & CO
P. ASHOK REDDY
BALAJI DISTILLERIES LIMITED
AUDITORS’ REPORT TO THE MEMBERS OFBALAJI DISTILLERIES LIMITED
We have audited the attached Balance Sheet of Balaji Distilleries Ltd as at March 31, 2010, the Profit and Loss
Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. 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.
We conducted our audit in accordance with 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 of material misstatements. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by the management, as well as evaluating the overall financial statements
presentation. 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 in terms of
section 227(4A) of the CompaniesAct, 1956, we enclose in theAnnexure, a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
3) Though the Company has been declared as a Sick Industrial Undertaking, referred to BIFR and has negative
networth, in view of settlement of most of the term liabilities successfully through One Time Settlement (OTS) and
after considering improved operations and Company’s business plans, the company’s accounts are prepared as
a going concern.
4) Without qualifying our opinion, we draw your attention to Para number 13 of Schedule U to the Balance Sheet. In
distillery division, company has changed to weighted average method for valuing raw materials, packing
materials and stores and spares as against FIFO method followed last year. Given the magnitude of the
transactions, Management is unable to quantify the impact due to change in accounting policy.
5) Further to our comments in paragraphs 2 to 4 above, we report that:
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 it
appears from our examination of those books;
c) the Balance Sheet, 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, Profit and LossAccount and Cash Flow Statement dealt with by this Report
are in compliance with the accounting standards referred to in Section 211(3C) of the CompaniesAct, 1956.
e) On the basis of written representations received from the Directors of the Company as at 31st March 2010
and taken on record by the Board of Directors, in terms of clause (g) of subsection (1) of section 274 of the
Companies Act, 1956, we report that none of the Directors is disqualified as on 31st March 2010 from being
so appointed as Director of the Company;
f)
1)
a)
The particulars required to be disclosed under clause 32 of the listing agreement have not been
disclosed;
15
6 In our opinion and to the best of our information and according to the explanations given to us, the said accounts
read together with the schedules and notes thereon, give the information required by the CompaniesAct, 1956, in
the manner so required and give a true and fair view in conformity with the accounting principles generally
accepted in India:
i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;
ii. In the case of the Profit and LossAccount, of the loss for the year ended on that date; and
iii. In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date..
)
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
Place: ChennaiDate : July
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
31, 2010
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
16
ANNEXURE TO THE AUDITORS’ REPORT OF BALAJI DISTILLERIES LIMITED[referred to in Paragraph 3 of our report of even date].
Based on the information and explanation furnished to us and the books and records examined by us in the normal
course of our audit, we report that to the best of our knowledge and belief:
The Company has maintained proper records showing full particulars, including quantitative details and
situation of fixed assets.
b) During the year, the Fixed assets have been physically verified by the management. No major
discrepancies were noticed as a result of such verification.
c) The fixed assets disposed off during the year are not substantial and therefore do not affect the going
concern status of the company.
ii. In respect of Inventories of finished goods, work in process, raw materials and stores and spares:
a) The inventories have been physically verified by the management during the year and the frequency of
such verification is reasonable.
b) The procedures of physical verification of inventories followed by the management are reasonable and
adequate in relation to the size of the Company and the nature of its business.
c) The Company is maintaining proper records of inventories. The discrepancies noticed on verification
between the physical stocks and the book records were not material and the same have been properly
dealt with in the books of account.
iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other
parties covered in the register maintained under section 301 of the CompaniesAct, 1956:
a) During the year, the company has not granted or taken any loans to / from any parties referred above.
iv. In respect of internal control procedures:
a) There are adequate Internal Control Systems commensurate with the size of the Company and the nature
of its business for the purchase of inventories, fixed assets and sale of goods and services. Further, on the
basis of our examination of the books and records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal control system.
v. In respect of transactions that need to be entered into a register in pursuance of section 301 of the Companies
Act.
a) During the year, there are no contracts and / or arrangements that need to be entered in to the register
maintained under Section 301 of theAct.
vi. In respect of public deposits:
a) The Company has not accepted any deposits from the public within the meaning of section 58A and 58AA
of the Companies Act, 1956 and the Companies (Acceptance of deposits) Rules, 1975 and therefore the
provisions of paragraph 4(vi) of the Order are not applicable to the Company.
vii. In respect of internal audit system:
a) In our opinion, the company has an internal audit system commensurate with its size and nature of its
business.
i) In respect of FixedAssets:
a)
17
viii. In respect of cost records:
a) According to the information and explanations given to us, the Central Government has not prescribed
maintenance of cost records under section 209(1)(d) of the CompaniesAct, 1956, for any of the products of
the Company and therefore the provisions of paragraph 4(viii) of the Order are not applicable to the
company.
ix. In respect of statutory dues,
a) The Company has been generally regular in depositing undisputed dues of provident fund, Investor
Education and protection fund, employees state Insurance, Income Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other applicable Statutory dues with the appropriate authorities
during the year
.
b) In respect of Income Tax, Sales Tax, Wealth Tax, Service tax, Customs duty, Excise duty and Cess, there are
no undisputed amounts outstanding as at March 31, 2010 for a period of more than six months from the date
they became payable
.
c) Dues relating to sales tax / excise duty / cess / Income tax / service tax, which have not been deposited on
account of disputes with the related authorities, are stated in the table below:
F.Y. 1985-86 & 1986-87 12.52 High Court, Madras
except undisputed sales tax of Rs. 4548.91 lakhs and interest thereon of Rs. 6710.13
lakhs relating to the financial year 2003-04 and interest on Sales Tax / VAT of Rs 1231.83 lakhs
relating to other financial years. In some cases, Sales Tax and Income Tax remittances of the year
have been made after small delays
except for undisputed sales tax and Value Added Tax of Rs. 4548.91 lakhs and
interest thereonofRs.7941.96 lakhs andshortdeductionofTax deductedatsource ofRs.6,76,239/-
[Rs. In crores] dispute is pending
Sales Tax F.Y. 1996 – 97 4.38 High Court, Madras
Interest on Sales Tax
Income Tax A.Y. 2002-03 & 2004-05 3.02 Commissioner of Income
Tax (Appeals)
State Excise Duty F.Y. 2000-01 to 2008-09 1.63 High Court, Madras
x) In respect of losses:
a) The accumulated losses of the company as at March 31, 2010 are in excess of 50% of the networth. The
company has not incurred cash loss during the year ended on that date and in the immediately preceding
year.
xi) In respect of repayment of dues to financial institutions, banks and / or debenture holders :
a) The Company has no outstanding dues to the financial institutions and has repaid the dues with regard to
debentures in accordance with one time settlement. There is no default as at the balance sheet date as
regards repayment of dues to banks.
xii) In respect of loans on the basis of security by way of pledge of shares, debentures and other securities:
a) The company has not granted any loans and advances on the basis of security by way of pledge of shares,
debentures and other securities. Therefore, the provisions of paragraph 4 (xii) of the Order are not
applicable to the company.
Name of the Statute Period Amount Forum where the
(net of the amount deposited on protest)
18
xiii) In respect of applicability of any special statutes:
a) The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4
(xiii) of the Order are not applicable to the Company.
xiv) In respect of dealing in shares, securities, debentures and other investments:
a) The Company is not dealing in or trading in shares, securities, debentures and other investments.
Accordingly, the provisions of clause 4 [xiv] of the Order are not applicable to the Company.
xv) In respect of guarantees by the Company for the loan taken by others from banks or financial institutions:
a) The Company has not given any guarantee during the year and there are no guarantees outstanding at the
end of the year.
xvi) In respect of utilization of term loans:
a) The Company has not taken any fresh term loan during the year.
xvii) In respect of utilization of short term funds:
a)
xviii) In respect of preferential allotment of shares:
a) According to the information and explanations given to us, during the period covered by our audit report,
the Company has not made preferential allotment of shares to parties and companies covered in the
register maintained under section 301 of the CompaniesAct, 1956.
xix) In respect of issue of debentures:
a) According to the information and explanations given to us, the Company has not issued any debentures
during the year nor are any debentures outstanding at the end of the accounting year.
xx) In respect of public issues:
a) During the period covered by our audit report, the Company has not raised any money by public issues.
Hence the matters to be reported as per paragraph 4(xx) of the Order are not applicable to the Company.
xxi) In respect of frauds:
a) In our opinion and according to the information and explanations given to us, no material fraud on or by the
Company has been noticed or reported during the course of our audit.
According to the information and explanations given to us and on an overall examination of the
Balance Sheet of the Company, we report that the Company has used funds raised on short term
basis for long term investment.
19
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
Place: ChennaiDate : July
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
31, 2010
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
SOURCES OF FUNDS
1. SHAREHOLDERS' FUNDS
A
B
2. SHARE WARRANTALLOTMENT MONEY
3. LOAN FUNDS
C
D
Total 2,893,339,217APPLICATION OF FUNDS
1. FIXEDASSETS
E
2. INVESTMENTS F
3. CURRENTASSETS, LOANSANDADVANCES
G
H
I
J
K
4. PROFITAND LOSSACCOUNT (Net) T
Total 2,893,339,217
NOTES ONACCOUNTS U
a) Capital 1,126,384,600
b) Reserves and Surplus 299,824,327
– 124,020,000
a) Secured Loans 1,005,033,007
b) Unsecured Loans -- 338,077,283
a) Gross Block 1,561,224,255
b) Less : Depreciation 429,876,253
c) Net Block 1,131,348,002
d) Capital Work-in-progress 375,670,438
150,899,820
a) Inventories 343,406,529
b) Sundry Debtors 338,389,360
c) Cash and Bank Balances 253,047,365
d) Loans and Advances 119,007,429
1,053,850,683Less: Current Liabilities and Provisions
- Current Liabilities 3,304,171,160
- Provisions 10,709,701
Net CurrentAssets (2,261,030,178)
3,496,451,135
1,430,175,600
981,023,927
680,000,000
2,111,189,855
524,166,473
1,587,023,382
1,427,385
151,900,000
372,244,425
488,170,509
291,299,058
140,016,734
1,291,730,726
3,479,964,874
10,940,306
(2,199,174,454)
3,550,023,214
3,091,199,527
3,091,199,527
BALANCE SHEET AS AT MARCH 31, 2010
Schedule As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
The schedules referred above, form part of the Accounts.This is the Balance Sheet referred to in our report of even date.
20
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
Place : ChennaiDate : July 31, 2010
G. SRIRAMANCompany Secretary
S. NAGARAJANChief Financial Officer
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
DirectorV. CHANDRASEKHARA REDDY
On behalf of the Board
R. RAGHURAMManaging Director
INCOME
L
M
N
Total 6,845,068,800
EXPENDITURE
O
P
Q
R
E
Total 7,045,615,052
S
T
NOTES ONACCOUNTS U
Income from Operations
Gross Income 21,964,056,943
Less : TN Vat 8,073,909,500 8,062,754,974
Less: Excise Duty 7,151,053,134 7,168,709,580
Net Income 6,732,592,389
Other Income 48,658,924
Variation In Stocks 63,817,487
Materials 4,238,100,511
Personnel 168,738,267
Overheads 2,202,108,706
Finance Charges 353,145,086
Depreciation 83,522,482
Profit / (Loss) for the year before ExceptionalItems and Prior period adjustments (200,546,252)
Exceptional Items 314,709,203
Loss for the year beforePrior period adjustments 114,162,951
Prior PeriodAdjustments – 103,385
Profit/(Loss) before tax 114,266,336
Provision for Income Tax Earlier Years -- 1,352,305
Provision for Fringe benefit tax – 18,193,487
Profit/(Loss) after tax 94,720,544
Deficit brought forwardfrom previous years (4,100,053,149)
Deficit carried forward to Balance Sheet (4,005,332,605)
Basic Earning per Share 0.78
21,994,444,595
6,769,481,961
48,571,136
19,439,259
4,171,719,559
173,086,073
2,194,768,409
274,696,016
96,404,953
(73,182,654)
19,610,575
Profit / ( )(53,572,079)
(53,572,079)
(53,572,079)
(4,005,332,605)
(4,058,904,684)
(0.43)
Diluted Earning per Share (0.43) 0.74
6,837,492,356
6,910,675,010
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule For the year ended31.03.10
For the year ended31.03.09
The schedules referred above, form part of the AccountsThis is the Profit and Loss Account referred to in our Report of even date.
21
(Rs.) (Rs.)(Rs.) (Rs.)
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
Place : ChennaiDate : July 31, 2010
G. SRIRAMANCompany Secretary
S. NAGARAJANChief Financial Officer
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
DirectorV. CHANDRASEKHARA REDDY
On behalf of the Board
R. RAGHURAMManaging Director
SCHEDULE A : SHARE CAPITAL
AUTHORISED
ISSUED, SUBSCRIBED AND PAID UP
340,999,600 - -
100,000,000 100,000,000
540,024,327 199,824,327
Total (a + b + c + d) 981,023,927 299,824,327
1 ,00,00,000 ( ,00,00,000) Equity Shares
530,175,600Fully Paid up (Refer Note 2 of Schedule U) (Of the above shares2,05,08,780 were allotted as bonus shares of Rs.10 each by wayof Capitalisation of Securities Premium of Rs.11,50,87,800and General Reserve of Rs.9,00,00,000 and 2,35,08,780Shares were allotted on conversion of debentures issued / loansborrowed)
Nil (4,46,20,900) - 6% Optionally Convertible Cumulative -- 446,209,000
a) Capital Reserves
- Opening Balance - - - -
-Add :Additions (Refer Note 3 of Schedule U) 340,999,600 - -
- Less : Deletions - - - -
b) Capital Redemption Reserve 100,000,000 100,000,000
c) Securities Premium
- Opening Balance 199,824,327 199,824,327
- Add :Additions 340,200,000 - -
- Less : Deletions - - --
d) General Reserve
As Per Last Balance Sheet 508,881,470 508,881,470
508,881,470 508,881,470
5 15of Rs.10/- each 1,500,000,000 1,500,000,000
7,50,00,000 (7,50,00,000) Preference Shares of Rs.10/- each 750,000,000 750,000,000
14,30,17,560 (5,30,17,560) Equity Shares of Rs.10/- each 1,430,175,600
Redeemable Preference Shares of Rs.10/- each (Repayable in36 monthly instalments commencing from April 2015, theentire Optionally Convertible Cumulative RedeemablePreference Shares were alloted on part conversion of loans)(Refer Note 3 of Schedule U)
Nil (1,50,00,000)12.5% Cumulative Redeemable Preference -- 150,000,000Shares of Rs.10/- each (Redeemable at par in three equal annualinstalments commencing from December 2001) (Refer Note 3 ofSchedule U)
2,250,000,000 2,250,000,000
Total 1,430,175,600 1,126,384,600
SCHEDULE B : RESERVESAND SURPLUS
Less: Deducted from Debit balance in Profit and Loss account (Schedule T)
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010
As at 31.03.09(Rs.)
22
As at 31.03.10(Rs.)
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010
As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
23
SCHEDULE C : SECURED LOANS
FROM BANKS
RUPEE TERM LOAN
FROM CORPORATES
OTHER LOANS –
Total 1,005,033,007
680,000,000 935,000,000
70,033,007
Pari-passu first mortgage and charge on all the company'simmoveable and moveable properties (excluding current assets)both present and future.
Pari-passu first mortgage and charge on all the company'simmoveable and moveable properties (excluding currentassets) both present and future and first charge on currentassets of brewery division both present and future.
Inter Corporate Deposit - 335,000,000
Interest Accrued And Due - 3,077,283
680,000,000
SCHEDULE D : UNSECURED LOANS
FROM CORPORATES
Total - 338,077,283
24
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SCHEDULE F : INVESTMENTS
LONG TERM INVESTMENTS
TRADE INVESTMENTS
IN SUBSIDIARIES - UN QUOTED
Total 151,900,000 150,899,820
Aggregate Net Asset Value of Mutual Fund Investments
Aggregate value of unquoted Investments
(at cost less provision for other than temporary dimunition in the value)
1,90,000 (89,982) Equity Shares of Rs.10/- each in BDL Distillery P Ltd 1,900,000 899,820
1,50,00,000 (1,50,00,000) Equity Shares of Rs.10/- each in
Chennai Breweries P Ltd 150,000,000 150,000,000
151,900,000 150,899,820
-- --
-- --
151,900,000 150,899,820
Prudential ICICI Liquid Super Institutional Growth Plan FundNil (21,79,53,104) Units -- 2,618,000,000
BDL Distillery P Ltd 100018 (Nil) Equity shares of Rs.10 each 1,000,180 -
Chennai Breweries P Ltd Nil (1,49,89,200) Equity shares of Rs.10 each - 149,892,000
Prudential ICICI Liquid Super Institutional Growth Plan FundNil (23,12,34,957) Units – 2,775,657,086Nil (72) Equity Shares of Rs.10/- each in -- 2,526
Nil (450) Equity Shares of Rs.10/- each in -- 3,000
Nil (10,000) Equity Shares of Rs.10/- each in -- 442,000
Aggregate Market Value of quoted Investments
Purchase during the year
Sales / Redemption during the year
United Spirits Ltd
Balaji Industrial Corporation Ltd
Balaji Hotels and Enterprises Ltd
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010
As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
25
SCHEDULE G : INVENTORIES
Total 372,244,425 343,406,529
488,170,509
SCHEDULE I : CASH AND BANK BALANCES
BALANCES WITH SCHEDULED BANKS
Total 291,299,058 253,047,365
SCHEDULE J : LOANS, ADVANCES AND DEPOSITS
Total 140,016,734 119,007,429
[at lower of cost or net realisable value]
[As certified by management]
Fuel Oil 3,852,147 1,667,665
Raw Materials 104,943,461 87,958,392
Packing Materials 63,195,411 78,468,459
Stores & Spares 57,440,199 51,938,065
Finished Goods 84,911,199 73,068,146
Work-in-Process 59,909,529 52,313,323
374,251,946 345,414,050
Less : Provision for obsolete stock 2,007,521 2,007,521
4,729,419
1,755,400
6,484,819
483,441,090
489,925,909
1,755,400
Cash on Hand 1,386,854 1,104,560
Cheques on Hand 1,664,928 98,007,266
In Current Account 93,527,033 41,065,734
In Deposit Account 194,720,243 112,869,805
Loans (Unsecured and Considered good):
To Subsidiaries -- --
Advances recoverable in cash or kind or for value to be received
(Unsecured)
Considered good : 98,013,560 84847,149
Advance Leave Encashment / Gratuity with LIC 3,191,296 3,524,420
Considered doubtful 2,038,762,660 2,039,462,660
Income Tax (net of provision) 23,303,607 12,981,171
Deposits 15,508,271 17,654,689
2,178,779,394 2,158,470,089
Less : Provision for doubtful advances 2,038,762,660 2,039,462,660
SCHEDULE H : SUNDRY DEBTORS
Total 338,389,360
Unsecured:Debts outstanding for more than six months
Considered good 9,806,520
Considered doubtful 1,755,400
11,561,920
Other Debts
Considered good 328,582,840
340,144,760
Less : Provision for Doubtful debts 1,755,400
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010
As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
26
SCHEDULE K : CURRENT LIABILITIES AND PROVISIONS1. CURRENT LIABILITIES
Total 3,479,964,874 3,304,171,160
2. PROVISIONS
Total 10,940,306 10,709,701
Total [1+2] 3,490,905,180 3,314,880,861
SCHEDULE T : PROFIT AND LOSS ACCOUNT
Total 3,550,023,214 3,496,451,135
Sundry Creditors
- Dues to Small & Micro Enterprises -- --
- Others
- For Materials 236,238,738 302,693,181
- For Capital Goods 8,110,363 27,673,336
- For Others 3,235,615,773 2,973,804,643
Employee Benefits 10,560,231 9,270,194
Provision for Gratuity – 1,003,732
Wealth Tax 380,075 435,775
Deficit in Profit and Loss Account 4,058,904,684 4,005,332,605
Less : General Reserve (As per schedule B) 508,881,470 508,881,470
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010
As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
27
SCHEDULE L : INCOME FROM OPERATIONS
Total 6,732,592,389
Total
Closing Stocks
Less : Opening Stocks
Total 63,817,487
Net Sales
- IMFL 4,946,757,303
- Beer 1,785,835,086
Scrap Sales 10,580,031
Interest on others
Profit on sale of Current Investments – 10,384,639
Profit on sale of assets 209,448
Difference in Exchange 389,860
Trade liabilities written back – 3,499,969
Provisions no longer required --
Sale of Spent Malt 9,152,896
Miscellaneous 2,367,231
Finished Goods 73,068,146
Work-in-Process 52,313,323
Finished Goods 20,797,388
Work-in-Process 40,766,594
4,769,570,273
1,999,911,688
15,571,400
[TDS Rs.7,13,987 (25,77,732)] 8,064,749 12,074,850
88,229
853
770,174
23,160,081
915,650
84,911,199
59,909,529
73,068,146
52,313,323
166,426,851 157,315,617
Add: Purchases 4,173,431,580 4,247,211,745
4,339,858,431 4,404,527,362
168,138,872 166,426,851
Salaries, Wages and Bonus 139,143,010 139,609,032
Contribution to PF and Other Funds 15,287,663 13,904,713
Staff Welfare & Career Development 18,655,400 15,224,522
6,769,481,961
SCHEDULE M : OTHER INCOME
48,571,136 48,658,924
SCHEDULE N : VARIANCE IN STOCKS
19,439,259
SCHEDULE O : MATERIALS
[CONSUMPTION OF GOODS AND MATERIALS]
Opening Stock
Less: Closing Stock
Total 4,171,719,559 4,238,100,511
SCHEDULE P : PERSONNEL
Total 173,086,073 168,738,267
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED MARCH 31, 2010
For the yearended 31.03.10
(Rs.)
For the yearended 31.03.09
(Rs.)
28
SCHEDULES FORMING PART OF THEPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
SCHEDULE Q : OVERHEADSFACTORY
REPAIRS AND MAINTENANCE
Total [a] 409,684,378 460,018,994
1,722,802,378
2,194,768,409
274,696,016
SCHEDULE S : EXCEPTIONAL ITEMS
19,610,575 314,709,203
Power and Fuel 293,567,186 294,334,471Consumables 34,079,367 23,144,682
- Building 12,356,298 20,814,309- Machinery 48,189,830 64,087,277- Others 4,931,539 5,744,108Provision for Obsolte Stock – 2,007,521Insurance 6,702,247 5,178,012Excise Duty - on opening and closing stock (Net) 9,857,911 36,948,478Extra Excise Duty – 7,760,136
167,726,355427,966,462253,938,693873,170,868
145,506,407
129,189,609
Waiver of Dues by lenders 19,610,575 22,498,473Provision for doubtful advances -- (12,000,000)Provision for doubtful advances no longer required written back -- 79,411,532Relinquishment of rights of assets to RSEB -- 162,702,899Lease income from RSEB (TDS Rs.1,10,73,420/-) -- 16,727,013Interest income from RSEB -- 48,867,695Poompuhar Shipping Corporation - Charter Hire (TDS Rs.4,01,177) -- 17,701,591Share of settlement of Corporate Guarantee -- (21,200,000)
ADMINISTRATION
Total [b] 62,281,653 55,025,542
SELLING
Total [c] 1,687,064,169
Total [a+b+c] 2,202,108,706
SCHEDULE R : FINANCE
Total 353,145,086
Rent 3,845,321 3,896,465Rates and Taxes 6,876,508 5,279,551Printing and Stationery 2,285,914 2,015,793Travelling and Conveyance 2,533,901 2,345,506Communication Expenses 2,341,610 2,036,458Vehicle Maintenance 10,656,757 10,851,227Remuneration to Directors 2,797,500 2,437,500Sitting Fees 40,000 35,000Audit Fees and Expenses 2,183,046 2,236,439Professional Charges 12,452,478 11,235,621Donations 33,005 26,200Excise Establishment 11,123,469 6,938,480Loss on Sale of Assets 578,096 2,490,746General Expenses 4,153,848 2,243,064Bad advances writtenoff - 521,717Wealth Tax 380,200 435,775
Cash Discount 168,337,417Other Selling Expenses 400,616,646Freight and Handling 219,566,916Payment to Brand Owners 898,543,190
Interest - Fixed Loans 169,527,236Interest - Other Loans – 6,494,759Other Finance Charges 177,123,091
For the yearended 31.03.10
(Rs.)
For the yearended 31.03.09
(Rs.)
29
SCHEDULE U : NOTES ON ACCOUNTS
1. ACCOUNTING POLICIES :
i) Basis ofAccounting
(ii) FixedAssets
(iii) Expenditure During Construction period
(iv) Borrowing Costs
(v) Depreciation
(vi) Inventories
Financial statements are prepared as a going concern on accrual basis under the Historical cost convention
and in accordance with the generally accepted accounting principles.
FixedAssets are stated at cost less accumulated depreciation. Cost is inclusive of freight, duties, taxes and
all directly attributable costs of bringing the assets to their working condition for intended use.
At the balance sheet date, an assessment is done to determine whether there is any indication of
impairment in the carrying amount of the company’s fixed assets. If any such indication exists, the asset’s
recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an
asset exceeds its recoverable amount.
After recognition of impairment loss, the depreciation charge for the asset is adjusted in future periods to
allocate the asset’s revised carrying amount, less its residual value (if any), on Straight Line basis over its
remaining useful life.
Expenditure incurred during construction period is included under capital work-in progress and is
capitalised when the asset is ready for commercial use. Expenditure in connection with Project
implementation in so far as such expenditure relates to the period prior to commencement of commercial
production is also included under Capital work in progress.
Borrowing costs that are attributable to construction of qualifying assets are capitalised as part of cost of
such assets till such time the asset is ready for its intended use. A qualifying asset is an asset that
necessarily requires a substantial period of time to get ready for its intended use. All other borrowing costs
are recognised as an expense in the period in which they are incurred.
Assets given on lease net of residual value are depreciated over the primary lease period and depreciation
on all other assets is provided on straight line basis at the rates specified in Schedule XIV of the Companies
Act, 1956. Depreciation on additions and deletions during the year is provided on Pro-rata Basis.
Inventories are valued at cost or net realisable value whichever is lower and the cost is determined as
follows:
Raw materials & Packing Materials : Distillery: On Weighted Average basis and cost includes
expenses of procurement, excise and other duties.
Brewery: On FIFO basis and cost includes expenses of
procurement, excise and other duties
Finished Goods : Cost includes appropriate share of related overheads and excise
duty payable on such goods
Work in Progress : Cost includes appropriate share of related Overheads
Stores and Spares : Distillery: On Weighted Average basis and cost includes
expenses of procurement, excise and other duties.
Brewery: On FIFO basis and cost includes expenses of
procurement, excise and other duties
SCHEDULES FORMING PART OF ACCOUNTSFOR THE YEAR ENDED MARCH 31, 2010
30
(vii) Investments
(viii) Sales
(ix) Excise Duty
(x) Employee Benefits
(xi) Foreign Currency Transactions
(xii) Current and Deferred Tax
(xiii) Contingent Liabilities
(xiv) Segment Reporting
Long term investments are valued at cost, after providing for any diminution other than temporary in value.
Current investments are valued at cost or market price whichever is lower. Income from investments is
recognised in the year in which it accrues.
Gross Sales includes Excise Duty, TN Vat collected and is net of trade discount.
Excise Duty has been accounted on the basis of payments made in respect of goods cleared and provision
is made for goods lying as closing stock at the year end.
Contributions to defined contribution schemes such as provident fund and family pension fund are accrued
on actual liability basis. In respect of defined benefit plans like Contributions to gratuity, Superannuation
and Leave Encashment, these are accrued in accordance with the terms of the scheme of the Life
Insurance Corporation of India, the liability whereof is determined using projected Unit Credit Method as
provided inAccounting Standard 15 Revised.
All foreign currency transactions are accounted for at the rates prevailing on the dates of the transaction.
Foreign currency liabilities are converted at the year end rates as applicable.
The exchange difference on settlement / conversion are adjusted to a) cost of imported fixed assets, if the
foreign currency liability relates to fixed assets upto March 31, 2007 and b) Profit and Loss account, in all
other cases.
Tax on Income for the current period is determined on the basis of taxable income and tax credits computed
in accordance with the provisions of Income TaxAct 1961.
Deferred Tax is recognised on timing differences between the accounting income and the taxable income
for the year and quantified using the tax rates and laws prevailing as on the Balance Sheet date. Where
there is a carry forward loss or unabsorbed depreciation, deferred tax asset is created only if the set off is
virtually certain.
All possible obligations that arise from past events and existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
company are recognised as contingent liabilities and disclosed by way of notes to the accounts.
a) Revenue and expenses have been identified to the segment on the basis of relationship to operating
activities of the segment. Revenue and expenses which relate to the enterprise as a whole and which
are not allocable to a segment on reasonable basis have been disclosed as unallocable.
b) Segment assets and segment liabilities represent asset and liabilities in respective segments. Other
assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed
as unallocable.
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
31
2. EQUITY SHARES :
3. PREFERENCE SHARES :
4. ONE TIME SETTLEMENT WITH LENDERS:
5. SECURED LOANS :
During the year, the Company has allotted 90,000,000 equity shares at Rs.13.78 each including Share premium
of Rs.3.78 each consequent upon conversion of 90,000,000 Convertible Warrants. An amount equivalent to the
proceeds of issue of Rs.1,240,200,000/-, interalia has been utilized as under:
Particulars Rs.
Towards Redemption of Preference Shares 75,000,000
Towards Redemption of OCCRPS 180,209,400
Towards Payment to Institutions and Banks for OTS 405,489,625
Towards Payment of VAT 252,800,000
Towards Capital Expenditure 326,700,975
During the year, the outstanding Cumulative Redeemable Preference Shares have been redeemed out of fresh
issue of Equity Shares.
In respect of the 12.5% Cumulative Redeemable Preference Shares with a redemption value of Rs.150,000,000/-
, redemption of entire shares has been made during the year at a discount of Rs.5/- per share which aggregates
to Rs.75,000,000/-.
In respect of 6% Optionally Convertible Cumulative Redeemable Preference Shares with a redemption value of
Rs.446,209,000/- , redemption of entire shares has been made during the year at a discount of Rs.5.96 per share
which aggregates to Rs. 265,999,600/-.
The total discount on redemption aggregating to Rs.340,999,600/- has been credited to capital reserve.
During the year the Interest payable on Debentures issued to an institution have been fully settled under one time
settlement. In view of this an amount of Rs.19,610,575 (Rs.22,498,473) has been written back to Profit and Loss
account as exceptional item.
a) Secured loan with bank is secured by pari-passu first mortgage and charge on all the company’s immovable
and moveable properties (excluding current assets) both present and future.
b) Secured loan has been guaranteed by one of the promoters Mr.M.Sreenivasulu Reddy.
c) Secured loan is also collaterally secured by a real estate property of a company owned by associates,
friends, relatives and well wishers of the promoters.
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
32
6. A. CONTINGENT LIABILITIES:
B. CAPITAL COMMITMENTS
i Sales Tax:
a) For the Assessment years 1986-87 to 1988-89, the company haswon its case before STAT. However, the department has appealed tothe Sales Tax Special Tribunal. In the absence of details of thegrounds of appeal filed by the department, the amount disputed bythe department could not be quantified.
b) For the Assessment year 1996-97, in the erstwhile Shipping divisionan appeal filed by the Sales tax department before STAT wasallowed. Aggrieved by the order, the company appealed before theHonourable High Court of Madras and got an interim stay order.
c) For the Assessment years 1985-86 & 1986-87, a demand for interesthas been raised through a notice U/Sec 24(3) of the TNGSTAct,1959. When the same was challenged by the company, theHon’ble Madras High Court granted interim injunction and stay afterremittance of Rs.1.00 Crore by the company. Accordingly, thecompany remitted the amount and simultaneously is pursuing thewaiver of interest through industry association before the Tamil NaduState Government. The company is contemplating the option ofsettling the above disputed liabilities under the Samadhan schemeintroduced under Tamil Nadu sales tax (Settlement of Arrears)Act, 2010
d) In respect of the completed Assessment for the year 2000-01, theSales tax department issued a revision notice proposing levy ofSales tax on the sale of ships. On the challenge by the company, theHon’ble Madras High Court granted interim injunction.
e) The company is contemplating the option of settling the abovedisputed liabilities under the Samadhan scheme introduced underTamil Nadu Sales Tax (Settlement ofArrears)Act, 2010.
ii. Income Tax:
a) For the Assessment years 2002-03 & 2004-05 the companyappealed before CIT (A) against the order of assessing officer.
b) In respect of the Assessment years 1986-87 to 1990-91 the Incometax departments appeals against allowance of Commission/Marketing expenses are pending before the Madras High Court.
c) In respect of Assessment years 1994-95 to 2002-03, the Income Taxdepartment’s appeals against sale and lease back transactions, arepending before the Madras High Court.
iii. State Excise Duty:
a) During the year 2007-08 the company has Imported special spirits bypaying Rs.1/- per litre as import permit fee. However based on AG’saudit, the excise department issued notice for Rs.5/- per litre. Thecompany appealed before High court of madras and gotan interim injection order.
The state Government has amended the rule on 18.05.2010imposing import fee at Rs.5/- retrospectively from 2000 onwards.The Excise department has demanded additional payment andcompany has challenged the demand before High court Madras andgot an interim injunction.
337,772,997
498,098,515
204,205,978
498,098,515
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
Nil
Notquantifiable
Notquantifiable
No DemandQuantified yet
43,783,163 43,783,163
135,171,318135,171,318
Nil
Nil
Nil
103,753,938
30,167,522
3,189,996
13,098,924
2,000,000
2009-10Rs.
2008-09Rs.
33
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
34
8.
i. StatutoryAudit Fee 1,654,500 1,654,500
ii. TaxAudit Fee 424,656 424,655
iii. Certificate / Other services 55,150 92,197
iv. Out of Pocket Expenses 48,740 65,087
Items relating to prior periods have been (debited) / credited to the Profit and Loss Account under the followingAccount Heads:
Interest Income - (321,398)
Rent - (49,500)
Others - 474.283
This activity is not considered as manufacturing activity under industries(Development and Regulation)Act, 1951.
Licensed Capacity : 11,880,000 Cases 9,967,200 Cases
Installed Capacity : 11,880,000 Cases 9,967,200 Cases
Licensed Capacity : 12,726,000 Cases 12,726,000 Cases
Installed Capacity : 12,726,000 Cases 12,726,000 Cases
. REMUNERATION TO STATUTORYAUDITORS: 2009-10 2008-09Rs. Rs
9. PRIOR PERIOD EXPENDITURE:
Included under Head ofAccount 2009-10 2008-09Rs. Rs.
Total - 103,385
10. [A] LICENCEDAND INSTALLED CAPACITY :
Indian Made Foreign Liquor (IMFL):
2009-10 2008-09
Beer :
7. DIRECTORS’REMUNERATION: 2009-10 2008-09(Rs.) (Rs.)
Managing Director’s Remuneration
i Salary,Allowance and Bonus 2,797,500 2,437,500
ii Bonus 559,500 538,534
iii Contribution to Provident Fund, SuperAnnuation, and Gratuity 899,700 652,500
iv Leave Encashment – 460,000
v Other Perquisites(Rent, LTA, Medical, Insurance, Club Subscription etc) 937,950 409,363
Other Director’s Sitting Fees 40,000 35,000
Note : 1. Company contributes to LIC towards Gratuity, Super Annuation, and Leave Encashment of employeesincluding Managing Director.
IMFL Cases –
Cases –
Litres –
IMFL Cases
BEER Cases
DRAUGHT BEER Litres
LEASE RENTAL
[B] REVENUE
2009-10 2008-09
Actual Production Unit Quantity Value (Rs.) Quantity Value (Rs.)
[I] Turnover (Net)
9,442,929 – 9,604,027
BEER 8,946,410 – 7,944,267
DRAUGHT BEER 218,690 – 231,080
9,431,118 # 4,769,570,273 9,548,874 4,946,757,303
8,968,210 1,998,460,461 7,995,624 1,784,301,639
218,690 1,451,227 231,080 1,533,447
Raw Material - IMFL
i) Rectified Spirit Bulk Litres 37,801,286 1,362,429,699 38,471,466 1,294,494,447
ii) Malt Spirit Bulk Litres 110,730.120 16,480,085 260,908.039 45,285,481
iii) Grape Spirit Bulk Litres 256,998.630 65,215,922 255,430.541 67,435,292
iv) Others 589,78,565 95,693,800
Raw Material - BEER
i) Malted Barley M.Ton 9,593.451 227,969,878 8,425.768 219,079,435
ii) Broken Rice / (Maize Flakes) KGS 4,661,180 572,41,197 37,48,335 44,161,156
iii) Others 120,118,794 89,958,256
Packing Material
IMFL 1,615,137,888 1,830,086,711
BEER 648,147,531 551,905,933
Imported [In %] 0.023% 959,774
Indigenous [In %] 99.977% 4,170,759,785 100% 4,238,100,511
[II] Stock of finished goods
Opening Stock
IMFL Cases 59,927 22,457,931* 4,774 1,743,023*
BEER Cases 49,863 6,919,813* 101,220 12,215,770*
Closing Stock
IMFL Cases 71,738 27,408,519** 59,927 22,457,931**
BEER Cases 28,063 3,955,558** 49,863 6,919,813**
[III] Consumption
Total 4,171,719,559 4,238,100,511
Percentage of TotalConsumption Materials
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
BEER:, ,
,* Excluding excise duty of Rs.1 695,841 (Rs.3 442,492)** Excluding excise duty of Rs. 954,423(Rs.1 695,841)
IMFL:, ,, ,
* Excluding excise duty of Rs.41 994,560 (Rs.3 396,103)** Excluding excise duty of Rs.52 592,699 (Rs.41 994,560)# Includes 160 cases of obsolete stock written off.
35
11. EXPENDITURE IN FOREIGN EXCHANGE : 2009-10 2008-09(Rs.) (Rs.)
Total -- 231,600,000
12. CIF VALUE OF IMPORTS : 2009-10 2008-09(Rs.) (Rs.)
Total 17,261,152 21,886,842
Principal to Financial Institutions -- 231,600,000
The repayment of principal and interest of Rs.Nil(23,16,00,000)/- on foreign Currency loans have been paidin Indian currency on the principal translated in to the Indian currency at the rates prevailing on the date ofcrystalisation.
Purchase of spares & Consumables 8,854,423 5,263,835
Purchase of Plant and Machinery 7,446,955 1,204,400
Purchase of Generator -- 15,418,607
Purchase of Empty bottles 959,774 --
13. CHANGE INACCOUNTING POLICY:
During the year, due to the introduction of SAP in Distillery division, the inventories of Raw Material, PackingMaterial and Stores & Spares have been valued at Weighted Average Method as against FIFO basis followed bythe Company. In view of the magnitude of the transactions, the impact of such change in the policy of the inventoryvaluation on the Profit or Loss for the year could not be quantified. In view of the fact that the prices of the RawMaterial, Packing Material and Stores & Spares remained stable throughout the year, the impact of the change inthe valuation method will not be material.
14. SEGMENT REPORTING :
The company has identified three reportable primary business segments viz. Brewery, Distillery and Leasingsegments. Segments have been identified and reported taking into account nature of products and services, thediffering risks and returns and the internal business reporting systems. The company caters to the needs of thedomestic market and as such there are no reportable geographical segments. The accounting policies adoptedfor segment reporting are in line with the accounting policies of the company. During the previous year, theleasing business segment has been wound up.
Sales
Distillery 4,946,757,303
Brewery 1,785,835,086
Leasing – –
Total segment revenue for the period
Distillery 183,444,573
Brewery (25,073,598)
Leasing -- (2,160,651)
Distillery
- Waiver of Principal and Interest 22,498,473
- Provision for doubtful advances (12,000,000)
- Settlement of Corporate Guarantee (21,200,000)
Leasing
-Amount received against written off 79,411,532
- Relinguishment of rights of assets 162,702,899
- Lease income from RSEB 16,727,013
- Interest income from RSEB 48,867,695
Unallocated
- Poompuhar Shipping Corporation 17,701,591
(353,145,085)
12,074,850
103,385
(18,193,487)
Provision for Tax:
Current Tax / Earlier year tax 1,352,305
PARTICULARS 31.03.10 (Rs.) 31.03.09 (Rs.)
[A] Revenue:
6,732,592,389
[B] Result:
Total Segment 156,210,324
Profit/(Loss) before tax 96,072,849
Profit / (Loss) afer tax 94,720,544
4769,570,273
1,999,911,688
141,494,387
68,465,580
19,610,575
(16,511,354) (15,686,341)
(274,696,016)
8,064,749
6,769,481,961
209,959,967
(53,572,079)
(53,572,079)
Profit / (Loss) Before Interest , Exceptional Items andprior period adjustments
Exceptional Items
Unallocated Expenditure
Others
Interest
Interest Income / Dividend Income
Prior period adjustments
Provision for fringe benefit tax
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
36
15. RELATED PARTY DISCLOSURES :
LIST OF RELATED PARTIESAND RELATIONSHIPS
S.No. Party
(A) Associates
(B) Subsidiaries
C) Key Management Personnel
1. Hiwide Enterprises P Ltd.
2. Diadem Enterprises P Ltd.
3. BDLDistilleries P Ltd
4. Chennai Breweries P Ltd
1. R.Raghuram
2. S. Nagarajan
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
37
Distillery 2,485,196,310 2,539,046,001
Brewery 1,105,708,868 791,425,549
Leasing -- --
Unallocated Liabilities 680,000,000 1,343,110,290
Distillery 38,432,613 101,756,186
Brewery 514,538,233 29,253,566
Leasing -- --
Distillery 19,519,284
Brewery 73,180,507 61,842,547
Leasing 2,160,651
PARTICULARS 31.03.10 (Rs) 31.03.09 (Rs)
[D] Segment Liabilities
Total Liabilities 4,270,905,178 4,673,581,840
[E] Other Information
[C] SegmentAssets:
TotalAssets 4,270,905,178 4,673,581,840
Distillery 1,393,225,172 1,121,060,050
Brewery 1,715,552,712 1,593,318,412
Leasing -- --
Shareholders Funds [ Net of Losses] 1,138,823,687 1,946,222,208
UnallocatedAssets 23,303,607 12,981,170
23,224,446
Capital Expenditure
Depreciation
Non cash expenditure excluding depreciation
2009-10 2008-09Particulars Associates Subsidiaries Key Associates Subsidiaries Key
Management ManagementPersonnel Personnel
Rs. Rs. Rs. Rs. Rs. Rs.
Remuneration - MD 5,194,650 4,497,897
Remuneration - CFO 4,168,200 4,138,115
Purchases 67 651,462
Interest Paid 3 932,055
Amounts Payable:
Diadem Enterprises Pvt Ltd 16,893,790 18,676,550
Hiwide Enterprises Pvt Ltd 335,000,000
Chennai Breweries Pvt Ltd 47,957,907 115,000,000
Investment in Subsidiaries:
BDL Distilleries P Ltd 1,900,000 899,820
Chennai Breweries Pvt Ltd 150,000,000 150,000,000
, 63,296,125
, –
Advance (net) 67,042,093 115,000,000
Investments made 1,000,180 150,683,820
Outstanding as at year end
16. RELATED PARTY TRANSACTIONS :
17. EARNINGS PER SHARE (EPS) :2009-10 2008-09
Rs. Rs.
Total (53,572,079)
18. DEFERRED TAX :
19. SCHEME OFARRANGEMENT :
In respect of equity shares :
Profit (Loss) after Tax attributable to ordinary
Less: Preference Dividend and Dividend Tax
In view of the net deferred tax being an asset, the same has not been recognised in the books, as there is no virtualcertainty of set off
The Board of Directors of the Company in their meeting held on 29th November 2008 had decided to merge theCompany into United Spirits Ltd (USL) and approved the scheme of arrangement subject to the approval of BIFRand other agencies.
The scheme of arrangement interalia provides for transfer of Brewery Division Undertaking of Balaji DistilleriesLimited to Chennai Breweries Private Limited and thereafter merger of Balaji Distilleries Limited (consisting ofDistillery Division Undertaking and investments in subsidiaries) into United Spirits Limited on a going concern basis.The swap has been fixed as under:
Two Equity shares of USL for every 55 equity shares of BDL.
Shareholders (53,572,079) 94,720,544
53,259,096
One.12.5% Redeemable Preference Shares of Rs.10/- each of USLredeemable in March 2014, for every two 12.5% Cumulative RedeemablePreference Shares of Rs.10/- each held in BDL. (These preference shareshave been redeemed during the year).
One 12.5% Redeemable Preference Shares of Rs.10/- each of USL,redeemable in March 2014 for every two 6% Optionally ConvertibleCumulative Redeemable Preference Shares of Rs.10/- each held in BDL(These preference shares have been redeemed during the year).
--
41,461,448
WeightedAverage of Equity Shares of Rs.10 each 124,524,409 53,017,560
Basic EPS (0.43) 0.78
WeightedAverage of Equity Shares (including Dilutive) 124,524,409 56,393,070
Diluted EPS (0.43) 0.74
In respect of Preference shares :
In respect of OCCRPS :
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
38
20 BOARD FOR INDUSTRIALAND FINANCIAL RECONSTRUCTION (BIFR) :
21. GOING CONCERN :
22. BREAK-UP OF CAPITAL WORK IN PROGRESS :
2009-10 2008-09(Rs. in lacs) (Rs. in lacs)
Description 2009-10 2008-09(Rs.) (Rs.)
The Hon’ble Board for Industrial and Financial Reconstruction (BIFR) has declared the company as sickindustrial undertaking in terms of section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985at its hearing held on 20th December, 2006 and appointed M/s. IDBI Bank Ltd as the operatingAgency (OA). TheOA has submitted the revised Draft Rehabilitation Scheme (DRS) on 5th February, 2009 after taking into accountthe Scheme of Arrangement approved by the Board of Directors, which interalia envisages transfer of brewerydivision of Balaji Distilleries Limited to Chennai Breweries P Ltd, a wholly owned subsidiary of Balaji DistilleriesLimited and thereafter merger of distillery division of Balaji Distilleries Limited with United Spirits Limited (USL).The shareholders of USL have also approved the Scheme of Arrangement at their meeting held on 21stApril,2010.
The Hon’ble BIFR has circulated the DRS vide its order dt 19th February, 2010. Mandatory hearings have beenheld on 10th May, 2010, 26th May,2010 and 4th June,2010 and no creditor has raised any objection for the DRS.In the meeting held on 4th June, 2010, the Hon’ble BIFR has reserved its order and directed that the order will bepronounced on 24th June,2010 in the Open court. The pronouncement of order was postponed to 30th June,2010. On 30th June,2010, the Hon’ble BIFR has pronounced the order and copy of the order is yet to be receivedby the company.After reviewing the order, the Company will take necessary steps for future course of action.
Though the Company has been declared as a Sick Industrial Undertaking, referred to BIFR and has negativenetworth, in view of settlement of most of its term liabilities successfully through One Time Settlement (OTS) andafter considering successful operation and Company’s business plans, the company’s accounts are prepared asa going concern.
5,611.23
Building 427,385 47,794,589
Plant & Machinery 1,000,000 287,069,020
Water Supply Installations 6,490,828
Electrical Installations & Fittings 34,316,001
The company does not have any foreign currency exposure at the end of the year. The company has not enteredinto any derivative transactions during the year nor is any such transaction outstanding at the year end.
a) Interest on Sales Tax for the year 2001-02 356.60 356.60
b) Undisputed sales tax relating to F.Y 2003-04
Sales tax of January, 2004 payable in February, 2004 1,600.00 1,600.00
Sales tax of February, 2004 payable in March, 2004 2,948.91 2,948.91
Interest thereon upto 31.3.2010 6,710.13
c) Interest on VAT March, 2007 upto 31.3.2009 875.23 875.23
d) Current ValueAdded Tax relating to March, 2010 remitted inApril, 2010 7,366.09 6,741.21
Interest on Sales Tax / VAT 124,094,506 148,179,061
Management fee paid to a bank 500,000 --
Particulars 31.03.10 31.03.09(Rs.) (Rs.)
Total 1,427,385 375,670,438
23.
24. SUNDRY CREDITORS OTHERS INCLUDE :
25. OTHER FINANCE CHARGES INCLUDES :
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
39
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
40
26. EMPLOYEE BENEFITS :
Particulars 2009-10 2008-09
II Defined Benefit Plans
(A) Gratuity
Particulars 2009-2010 2008-2009
Net Liability / (Asset) (553,488)
Net Liability / (Asset) recognized in the Balance Sheet (553,488) 1,003,732
Particulars
Total 2,485,864 11,085,684
I Defined Contribution Plans
(Rs.) (Rs.)
1,003,732
2009-2010 2008-2009
a. Provident Fund
b. Superannuation Fund
c. State Defined Contribution Plans
i) Employer’s contribution to Employee’s State Insurance
ii) Employer’s Contribution to Employee’s Pension scheme 1995
During the year, the Company has recognised the following amounts in the Profit and loss account:
Employers contribution to provident fund and employees pension scheme 6,496,899 5,799,915
Employers contribution to superannuation fund 3,155,400 2,453,292
Employers contribution to Employee State Insurance 1,848,612 2,286,962
The company has defined benefit plans namely Superannuation, Leave encashment / Compensated absence foremployees and Gratuity for employees. With effect from 2007-08, the liability for these benefit plans isdetermined using Projected Unit Credit Method and accrued as provided in Accounting Standard 15 (R). All theadditional liability has been debited / credited to the profit & loss account of the year.
(a) Description of the Gratuity Plan: The Company provides for gratuity a defined benefit retirement plan coveringeligible employees. Gratuity plan provides for a lump sum payment to employees on retirement, death,incapacitation, termination of employment, of amounts that are based on salaries and tenure of the employees.
The contribution to LIC is made by the Company based on actuarial valuation done by a professional Actuary.
(b) Amount recognized in the Balance Sheet and movements in net liability
Present Value of Funded Obligations 29,773,163 25,552,688
Fair Value of PlanAssets 30,326,651 24,548,956
Present Value of Unfunded Obligations (553,488) 1,003,732
Unrecognized Past service Cost -- -
Liabilities -- 1,115,889
Asset (553,488) (112,157)
Net Liability / (Asset) (553,488) 1,003,732
(c) The fair value of the plan assets does not include the Company’s own financial instruments.
(d) Expenses recognized in the Statement of Profit and LossAccount
Current Service Cost 1,715,298 1,112,768
Interest on Defined Benefit Obligation 2,044,216 1,135,387
Expected Return on PlanAssets (2,335,888) 1,521,733
NetActuarial Losses/ (Gains) Recognized in the year 1,062,238 9,243,373
Past Service Cost -- --
Losses/ (Gains) on “Curtailments & Settlements” -- --
Effect of the limit in Para 59(b) -- --
Net gratuity expenses included in payments to and provision for employees 2,485,864 9,969,795
Add : Unpaid Gratuity provided in Profit and LossAccount -- 1,115,889
Amounts in the Balance Sheet
41
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
(e) TheActual Return on PlanAssets is Rs.2,335,888 (Rs.1,571,958)
(f) ActuarialAssumptions at the Valuation date
Discount Rate 8% 8%
Expected Rate of Return on PlanAssets* 8% 8%
Salary Escalation Rate
% (Brewery) 6
* This is based on expectation of the average long term rate of return expected on investments of the Fund duringthe estimated term of the obligations.
(g) Descriptions of the PlanAssets
Government of India Securities
Corporate Bonds
Special Deposit Scheme
Insurer Managed Funds 100% 100%
Others
Total 100% 100%
(a) Amount recognized in the Balance Sheet and movements in net liability:
Present Value of Funded Obligations 8,399,219 5,804,812
Fair Value of PlanAssets 11,022,144 9,329,232
Present Value of Unfunded Obligations (2,622,925) (3,524,420)
Unrecognized Past service Cost -- --
Amount not Recognized asAsset, because of limit in Para 59(b) -- --
Liabilities 14,833 526,473
Assets (2,637,808) (4,050,893)
Net Liability/(Asset) (2,622,925) (3,524,420)
Unpaid Gratuity for transferred employees -- --
(b) The fair value of the plan assets does not include the Company’s own financial instruments; no property of theGratuity Trust is occupied by the Company.
(c) Expenses recognized in the Statement of Profit and LossAccount
Particulars 2009-2010 2008-2009
Particulars 2009-2010 2008 - 2009
Total 1,870,745 5,212,423
5% (Distillery) 5% (Distillery)
6 % (Brewery)
Current Service Cost 3,572,173 531,465
Interest on Defined Benefit Obligation 464,385 50,653
Expected Return on PlanAssets (903,829) 39,830
NetActuarial Losses/ (Gains) Recognized in the year (1,261,984) 4,143,662
Past Service Cost -- --
Losses/ (Gains) on “Curtailments & Settlements” -- --
Effect of the limit in Para 59(b) – --
Net leave encashment expenses included in payments to andprovision for employees 1,870,745 4,685,950
Add : Unpaid Leave encashment provided in Profit and LossAccount -- 526,473
Category ofAssets As at 31.03.2010 As at 31.03.2009
(B) Leave Encashment
Particulars 2009-2010 2008 - 2009
Net Liability/(Asset) (2,622,925) (3,524,420)
Net liability/(asset) recognized in the Balance Sheet (2,622,925) (3,524,420)
Amounts in the Balance Sheet
SCHEDULE U : NOTES ON ACCOUNTS (Contd..)
42
(d) TheActual Return on PlanAssets is Rs. 9,03,829 (Rs.4,87,124)
(e) ActuarialAssumptions at the Valuation date
Discount Rate 8% 8%
Expected Rate of Return on PlanAssets* 8% 8%
Salary Escalation Rate 5% (Distillery) 5% (Distillery)
6% (Brewery) 6% (Brewery)
* This is based on expectation of the average long term rate of return expected on investments of the Fund duringthe estimated term of the obligations.
(f) Descriptions of the PlanAssets
Government of India Securities
Corporate Bonds
Special Deposit Scheme
Insurer Managed Funds 100% 100%
Others
Total 100% 100%
The data with respect to experience adjustment and estimated exhausted gratuity and leave encashment liabilityfor next year has not been provided byActuary
The company has subscribed for 100% of share capital of BDL Distillery Pvt Ltd and Chennai Breweries Pvt Ltd.There is no diminution other than temporary in the value of these investments.
The company has not received any information from the suppliers as regards their status under the Micro, Smalland Medium Enterprises Development Act, 2006 and hence disclosure requirements in this regard as perSchedule –VI of the Companies Act, 1956, could not be provided. However, no interest has been accrued / paidduring the year to any of the suppliers.
Previous Year’s figures have been regrouped / reclassified wherever necessary to conform to the current Year’spresentation.
Particulars 2009-2010 2008-2009
Category ofAssets As at 31.03.2010 As at 31.03.2009
27. INVESTMENT IN SUBSIDIARY COMPANIES :
28. MICRO, SMALLAND MEDIUM ENTERPRISES :
29.
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
Place : ChennaiDate : July 31, 2010
G. SRIRAMANCompany Secretary
S. NAGARAJANChief Financial Officer
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
DirectorV. CHANDRASEKHARA REDDY
On behalf of the Board
R. RAGHURAMManaging Director
1. REGISTRATION DETAILS
II CAPITAL RAISED DURING THE YEAR (Amount Rs. in Thousands)
III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount Rs. in thousands)
IV PERFORMANCE OF THE COMPANY (Amount Rs. in thousands)
V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES OF THE COMPANY(As per monetary terms)
Registration No. : L15520TN1983PLC055365 State Code
Balance Sheet Date
Public Issue Private Placement
Bonus Issue Rights Issue
Total Liabilities Total Assets
Sources of Funds
Paidup Capital Reserves & Surplus
Application of Funds
Net Fixed Assets Investments
Net Current Assets
Accumulated Losses
Turnover Total Expenditure
Profit / (Loss) Before Tax Profit / (Loss) After Tax
Earnings per Share (Rs.) Dividend Rate (%)(Weighted Annualised)
Item Code (ITC Code) Product / Service Description
(Warrants conversion into Equity)
Secured Loans Unsecured Loans
PART IVBALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
2 2 0 8 2 0 0 1
2 2 0 8 3 0 0 0
2 2 0 3 0 0
N I L
N I L
3 0 9 1 2 0 0 3 0 9 1 2 0 0
9 0 0 0 0 0
9 8 1 0 2 4
N I L
1 5 1 9 0 0
6 9 1 0 6 7 5
(-) 5 3 5 7 2
N I L
1 4 3 0 1 7 6
N I L
1 8
3 1 0 3 2 0 1 0
L I Q U O R B R A N D Y
L I Q U O R W H I S K Y
B E E R
43
6 8 0 0 0 0
1 5 8 8 4 5 1
(-) 2 1 9 9 1 7 4
3 5 5 0 0 2 3
6 8 3 7 4 9 2
(-) 7 3 1 8 3
(-) 0 . 4 3
Place : ChennaiDate : July 31, 2010
On behalf of the Board
DirectorV. CHANDRASEKHARA REDDY G. SRIRAMAN
Company SecretaryS. NAGARAJAN
Chief Financial OfficerR. RAGHURAM
Managing Director
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
For the year ended31.03.2010
Rs.
For the year ended31.03.2009
Rs.
A. CASH FROM OPERATING ACTIVITIES:
Net Profit Before Tax and Extraordinary Items
Adjusted for:
Operating Profit Before Working Capital Changes 215,544,040
Adjusted for:
Cash Generated From Operations 738,839,949
--
Cash Flow Before Extraordinary Items 177,519,261 773,173,190
Net Cash From (Used) Operating Activities
B. CASH FLOW FROM INVESTING ACTIVITIES:
(281,355,323)
(200,546,252)
Depreciation 83,522,482
Interest and Other Finance Charges 353,145,086
Interest / Dividend Income (12,074,85 )
Foreign Exchange Fluctuation [Net] (389,860)
[Profit] / Loss on sale of Fixed Assets [Net] 2,281,298
[Profit] / Loss on sale of Investments [Net] – (10,384,639)
Wealth Tax Provision 435,775
Provision no longer required (445,000)
Trade Receivables 58,909,123
Trade Payables 549,140,186
Inventories (84,753,400)
Wealth Tax Paid (95,363)
34,428,604
Prior Period Adjustments – 103,385
Purchase of Fixed Assets (411,139,969)
Sale of Fixed Assets 282,994,674
Sale of Investments – --
Interest Received 61,515,788
Dividend Received --
Purchase of Investments (Net) (214,725,818)
(73,182,654)
96,404,953
274,696,016
(8,064,749) 1
(853)
489,867
380,075
(700,000)
(170,986,602)
87,757,004
(28,837,896)
(435,900)
Lease income and Charter Hire
(198,290,827)
400,647
8,260,898
(82,850,618)
290,022,654
177,955,160
Cash Flow Before Exceptional Items 177,519,261 738,744,586
177,519,261
(272,479,900)
773,276,575
44
C. CASH FLOW FROM FINANCING ACTIVITIES:
NET CASH FROM (USED IN) FINANCING ACTIVITIES 51,361,895 (729,566,317)
NET INCREASE/(DECREASE) INCASH AND CASH EQUIVALENTS [A+B+C] (43,598,745) (237,645,066)
CASH AND CASH EQUIVALENTS AS AT 31.03.09
Proceeds From Issue Of Share Capital 1,116,180,000 --
Redemption of Prefence shares (255,209,400) --
Proceeds From Borrowings (Net) (619,811,004) (493,391,733)
Repayment Of Finance Lease Liabilities -- --
Dividend Paid -- --
Non Trade Advances 700,000 –
Interest Paid (190,497,701) (236,174,584)
140,177,560 377,822,626
CASH AND CASH EQUIVALENTS AS AT 31.03.10
INCREASE / (DECREASE) IN CASH EQUIVALENTS (43,598,745) (237,645,066)
Particulars
Cash and cash equivalents, end of year 96,578,815 140,177,560
3) Components of cash and cash equivalents:
BALANCES WITH SCHEDULED BANKS
96,578,815 140,177,560
96,578,815 140,177,560
Notes:
1) The above cash flow statement has been prepared under the "Indirect Method" as set out in the AccountingStandard - 3 on Cash Flow Statements.
2) The reconciliation to the cash and bank balances as given in the Balance Sheet is as follows:
Cash and bank balances, per Schedule I 291,299,058 253,047,365
Less : Fixed deposits with maturity over 90 days 194,720,243 112,869,805
Cash on Hand 1,386,854 1,104,560
Cheques on Hand 1,664,928 98,007,266
In Current Account 93,527,033 41,065,734
Total
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
For the year ended31.03.2010
Rs.
For the year ended31.03.2009
Rs.
For the year ended31.03.2010
For the year ended31.03.2009
45
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
Place : ChennaiDate : July 31, 2010
G. SRIRAMANCompany Secretary
S. NAGARAJANChief Financial Officer
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
DirectorV. CHANDRASEKHARA REDDY
On behalf of the Board
R. RAGHURAMManaging Director
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT,1956RELATING TO SUBSIDIARY COMPANIES
1. The Financial Year of the Company ends on:
2. Fully paid up shares held by Balaji Distilleries Ltd
in the Company
a) Number 1,50,00,000
b) Extent of holding
3. Changes in the interest of the company or the
subsidiary company between the end of financial year
of subsidiary company and 31st March, 2010.
4. Net aggregate of profit of the subsidiary company
so far as they concern the members of the company
a) Dealt with in the accounts of the Company for
the year ended 31st March 2010.
b) Not dealt with in the accounts of the Company
for the year ended 31st March 20 0.
5. Net aggregate of profit of the subsidiary company for
the previous financial years, so far as they concern the
members of the company
a) Dealt with in the accounts of the Company for
the year ended 31st March 20 0.
b) Not dealt with in the accounts of the Company
for the year ended 31st March 20 0.
6. Material changes between the end of the Financial Year
of the Subsidiary and the end of holding Company’s
Financial year ended 31st March, 2010 in respect of
a) Fixed Assets
b) Investments
c) Moneys lent by the Subsidiary Company
d) Moneys borrowed by the Subsidiary Companyother than for meeting Current Liabilities
BDL Distilleries Pvt. Ltd. Chennai Breweries Pvt. Ltd.
31st March 2010 31st March 2010
Does not arise Does not arise
Nil Nil
1,90,000
1
1
1
Equity Shares of Equity Shares ofRs.10/- each fully paid up Rs.10/- each fully paid up
100.00% 100.00%
Nil Nil
Nil Nil
Nil Nil
Does not arise Does not arise
Place : ChennaiDate : July 31, 2010
On behalf of the Board
DirectorV. CHANDRASEKHARA REDDY G. SRIRAMAN
Company SecretaryS. NAGARAJAN
Chief Financial OfficerR. RAGHURAM
Managing Director
46
SEVENTH ANNUAL REPORT 2009 - 2010
Board of Directors Shri S Nagarajan
Shri G Sriraman
Auditors M/s P.A. Reddy & Co.
Chartered Accountants
Chennai - 600 017
M/s PKF Sridhar & Santhanam
Chartered Accountants
Chennai - 600 004
Bankers ICICI Bank Limited
Registered Office Bye-pass Road
Poonamallee
Chennai 600 056
Tamilnadu
BDL DISTILLERIES PRIVATE LIMITED
47
Your Directors have pleasure in presenting the Seventh Annual Report together with the Audited Accounts of the
Company for the financial year ended 31st March, 2010.
Your Company was incorporated as a Subsidiary of the holding company and incurred an expenditure of
Rs.11,12,944/-. After brought forward loss of Rs.1,68,925/- from previous years, loss carried forward to the Balance
Sheet is Rs.12,81,869/- as on 31st March, 2010.
During the year your company has increased the authorised share capital from Rs.9 lakhs to Rs.20 crores and also
issued 1,00,018 equity shares of Rs.10/- each aggregating to Rs.10,00,180/- to the holding company viz., Balaji
Distilleries Limited.
Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors’
Responsibility Statement, it is hereby confirmed:
(i) that in the preparation of the Annual Accounts for the financial year ended 31st March, 2010, the applicable
accounting standards had been followed along with proper explanations relating to material departures;
(ii) that the accounting policies implemented by the Company have been applied consistently, judgments and
estimates have been reasonable and prudent thereby giving a true and fair view of the state of affairs of the
Company at the end of
(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the CompaniesAct, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) that the annual accounts were prepared for the financial year ended 31st March, 2010 on a 'going concern'
basis.
There is no employee falling within the purview of Section 217 (2A) of the CompaniesAct, 1956.
SHARE CAPITAL
DIRECTORS’RESPONSIBILITY STATEMENT
PARTICULARS OF EMPLOYEES
financial year and of the loss of the Company for the period under review;
Since the Company is yet to commence its operations, providing the details as required under the Companies
(Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, does not arise.
As per the provisions of Section 383Aof the CompaniesAct, 1956 the Secretarial Compliance Certificate is annexed.
M/s P.A. Reddy & Co., Chartered Accountants and M/s RKF Sridhar & Santhanam, Chartered Accountants, Auditors
of the Company hold office until the conclusion of the Seventh Annual General Meeting and are eligible for
reappointment as referred in the Notice to the Share Holders.
The Directors wish to express their sincere thanks to the Bankers/Central Government/Government of Tamilnadu.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
COMPLIANCE CERTIFICATE
AUDITORS
ACKNOWLEDGEMENT
DIRECTORS’ REPORT TO THE SHAREHOLDERS
Place : ChennaiDate : August 16, 2010
By order of the Board
G.SRIRAMANDirector
S. NAGARAJANDirector
BDL DISTILLERIES PRIVATE LIMITED
48
BDL DISTILLERIES PRIVATE LIMITED
49
SECRETARIAL COMPLIANCE CERTIFICATE
CIN: U15511TN2003PTC051280Nominal Capital: Rs.20,00,00,000/=Paid up Capital: Rs.19,00,000/=
The MembersM/s. BDL DISTILLERIES PRIVATE LIMITEDBYE PASS ROAD,POONAMALLEE, CHENNAI 600 056.
We have examined the registers, records, books and papers of [theCompany] bearing its as required to be maintained under the CompaniesAct 1956{the Act} and the rules made there under and also the provisions contained in the Memorandum and Articles ofAssociation of the Company for the financial year ended on{financial year}. In our opinion and to the best of our information and according to the examination carried out by usand explanations furnished to us by the Company, its officers and agents, We certify that in respect of the aforesaidfinancial year:
1. The Company has kept and maintained the registers as stated in Annexure ‘A’ to this certificate, as per theprovisions of theAct and the rules made there under and the entries therein have been recorded.
2. The Company has filed the forms and returns as stated in Annexure ‘B’ to this certificate, with the Registrar ofCompanies, Chennai (www.mca.gov.in) as prescribed under theAct and the rules made there under.
3. The Company, is a private limited company, has the minimum prescribed paid up share capital and itsmaximum number of members during the said financial year was Three (03) only and during the year underscrutiny has generally complied with the provisions of section 3(1)(iii) of theAct.
4. The Board of Directors met Five (05) times on 30-06-2009, 31-07-2009, 30-10-2009, 10-02-2010 and 26-03-2010 by giving notice to the board members of the Company and the proceedings are recorded and signed, in theMinutes Book maintained for the purpose.
5. The Company has not opted to close its Register of Members, during the period under scrutiny.
6. The Annual General Meeting for the financial year ended 31-03-2009 was held on 30-09-2009 by giving notice tothe members of the Company and the resolution passed thereat were recorded in the minute’s book maintainedfor this purpose.
7. One extra ordinary general meeting was held during the financial year under scrutiny on 15-03-2010 by givingnotice to the members of the Company and the resolutions passed thereat were recorded in the minute’s bookmaintained for this purpose.
8. The company being a private limited company the provisions of section 295 of theAct is not applicable.
9. The company had obtained the approvals of the board of directors for the transactions falling within the provisionsof Section 297 of theAct.
10. The company has made necessary entries in the register maintained under section 301 of theAct.
11. As there were no fresh instances falling within the preview of Section 314 of the Act, the Company had notobtained any from the board of directors/members of the company and Central Government.
12. The company has not issued any duplicate share certificates during the financial year.
13. i] The Company has delivered the certificates on the allotment of equity shares and during the year underreview, there was no transfer or transmission of shares.
[ii] & [iii] The Company has not declared any dividend during the year under report, hence comment on this parasare not required.
[iv] The Company was not required to transfer any amount to Investors Education and Protection Fund.
[v] The company has generally complied with the provisions of Section 217 of theAct.
14. The Board of Directors of the company is duly constituted. During the year under review there was noappointment ofAdditional,Alternative and Directors to fill casual vacancies during the financial year.
15. As the Company being a Private Company provisions of Section 269 of the Act with regard to theappointment/reappointment of the Managing Director/ Whole Time director/Manager are not applicable.
16. The company has not appointed any sole selling agents during the financial year under scrutiny.
M/s. BDL DISTILLERIES PRIVATE LIMITEDCIN U15511TN2003PTC051280
31st March, 2010 (01-04-2009 To 31-03-2010)
BDL DISTILLERIES PRIVATE LIMITED
50
17. As explained to us, the Company has not had the circumstances to get necessary approvals of the CentralGovernment, Company Law Board, Regional Director, Registrar or such other authorities as prescribed underthe variome provisions of theAct.
18. The directors had disclosed their interest in other firms/companies to the Board of Directors pursuant to theprovisions of theAct and the rules made there under.
19. The company has issued and allotted 1,00,018 equity shares of Rs.10/- each during the financial year underscrutiny and complied with the provisions of theAct.
20. The company has not bought back any shares during the financial year under scrutiny.
21. The Company has no preference shares/debentures and hence the comments on the redemption of preferenceshares or debentures do not arise.
22. As explained to us there were no transactions necessitating the company to keep in abeyance the rights todividend, rights shares and bonus pending registration of transfer of shares.
23. As per the information furnished to us, the company has not invited/accepted any deposits falling within thepurview of section 58A/58AAduring the financial year under scrutiny.
24. The company being a private Company, the provisions of 293(1) (d) of theAct is not applicable.
25. The company being a private limited company the provisions of 372Aof theAct are not applicable.
26. The company has not altered the provisions of the Memorandum with respect to situation of the company'sregistered office from one State to another during the financial year under scrutiny.
27. The company has not altered the provisions of the Memorandum with respect to the objects of the companyduring the year under scrutiny.
28. The company has not altered the provisions of the Memorandum with respect to name of the company during theyear under scrutiny.
29. The company has altered the provisions of the Memorandum with respect to share capital of the company duringthe year under scrutiny and complied with the provisions of theAct.
30. The company has altered itsArticles ofAssociation during the financial year under scrutiny and complied with theprovisions of theAct.
31. As explained to us there was/were no prosecution initiated against or show cause notices received by thecompany and no fines or penalties or any other punishment was imposed on the company during the financialyear, for offences under theAct.
32. The company has not received any money as security deposits from its employees during the financial yearunder scrutiny.
33. As explained to us, the provision of section 418 of theAct is not applicable; being the company has not constitutedany Provident Fund.
ForCompany Secretary – in – Practice
ProprietorFCS 5626 CP 3288
V NAGARAJAN & CO.,
V NagarajanPlace : ChennaiDate: August 16, 2010
ANNEXURE - A TO SECRETARIAL COMPLIANCE CERTIFICATE
CIN: U15511TN2003PTC051280Nominal Capital: Rs.20,00,00,000/=Paid up Capital: Rs.19,00,000/=
S. No. Name of the Register Under Section
1 Register of Members 150
2 Register of Directors, MD and Secretary 303
3 Register of Directors Shareholding 307
4 Copies of theAnnual Returns etc., 159 / 163
5 Minutes of Board of Directors 193
6 Minutes Books of General Body of Shareholders 193
7 Books ofAccounts 209
8 Register of Contracts, Companies and firms in which the Directorsof the Company are interested 301
Forms and Returns as filed by the Company with the Registrar of Companies, Chennai (www.mca.gov.in) duringthe financial year ended 31st March, 2010.
S. No. Forms/Returns Filed under Section Date of filing Remarks
1
2
15.03.2010
4 Form 5 Filed U/s 94, 97 for the increase of the authorised 25.03.2010 Nilshare capital from Rs.9 lacs to Rs.20 crores at theEGM held on 15-03-2010
5 Form 2 Filed U/s 75, for the allotment of 1,00,018 equity 01.04.2010 Nilshares of Rs.10/- each on 26-03-2010
ANNEXURE - B TO SECRETARIAL COMPLIANCE CERTIFICATE
Form 23AC/ACA Filed u/s 220(1) for the year ended 31.03.2009 20.10.2009 Nil(Balance sheet)
Form 20B Filed u/s 159 for theAnnual General Meeting 06.11.2009 Nil(Annual Return) held on 30.09.2009
3. Form No. 23 Filed U/s 192, for the registration of resolutions 25.03.2010 Niland agreements for the resolutions passedat the EGM held on
ForCompany Secretary – in – Practice
ProprietorFCS 5626 CP 3288
V NAGARAJAN & CO.,
V NagarajanPlace : ChennaiDate: August 16, 2010
BDL DISTILLERIES PRIVATE LIMITED
51
AUDITORS’ REPORT TO THE MEMBERS OFBDL DISTILLERIES PRIVATE LIMITED
1)
a
- In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010,
- In the case of the Profit and LossAccount, of the loss for the year ended on that date.
- In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.
We have audited the attached Balance Sheet of BDL Distilleries Private Limited as at March 31, 2010, the Profit
and Loss account and the Cash Flow Statement of the Company for the year ended on that date, annexed
thereto. 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.
2) We conducted our audit in accordance with 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 of material misstatements. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by the management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for our opinion.
3) In this context, we report that :
) 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 it
appears from our examination of those books.
c) The Balance Sheet, 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, Profit and Loss Account and Cash Flow Statement dealt with by this
Report are in compliance with the accounting standards referred to in Section 211(3C) of the CompaniesAct,
1956.
e) On the basis of written representations received from the Directors of the Company as at 31st March 2010
and taken on record by the Board of Directors, in terms of clause (g) of subsection (1) of section 274 of the
Companies Act, 1956, we report that none of the Directors is disqualified as on 31st March 2010 from being
so appointed as Director of the Company;
f) This report does not include a statement on the matters specified in paragraph 4 of the Companies (Auditor’s
Report) Order 2003, issued by Department of Company Affairs, in terms of Section 227(4A) of the
CompaniesAct, 1956, since in our opinion and according to the information and explanations given to us, the
said order is not applicable to the Company.
g) In our opinion and to the best of our information and according to the explanations given to us, the said
accounts read together with the schedules and notes there on give the information required by the
CompaniesAct,1956, in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India :
BDL DISTILLERIES PRIVATE LIMITED
52
Place : ChennaiDate : July 31, 2010
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
A
Total
APPLICATION OF FUNDS
Current Assets, Loans & Advances
B
C
Net Current Assets
MISCELLANEOUS EXPENDITURE
PROFIT AND LOSS ACCOUNT - Debit Balance
Total 1,900,000
NOTES ON ACCOUNTS : E
Share Capital 1,900,000
Cash and Bank Balances 629,185
Less: Current Liabilities and Provisions
- Current Liabilities 44,124
- Provisions – –
585,061
33,070
1,281,869
899,820
739,879
42,054
697,825
33,070(to the extent not written off or adjusted)
168,925
1,900,000 899,820
899,820
BALANCE SHEET AS AT MARCH 31, 2010
Schedule 31.03.10 31.03.09
The schedules referred above, form part of the Accounts.This is the Balance Sheet referred to in our report of even date.
(Rs.) (Rs.)(Rs.) (Rs.)
BDL DISTILLERIES PRIVATE LIMITED
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
Place : ChennaiDate : July 31, 2010
On behalf of the Board
Director
Director
S. NAGARAJAN
G. SRIRAMAN
53
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
The schedules referred above, form part of the Accounts.This is the Profit and Loss Account referred to in our report of even date.
Income
Expenditure
D
- -
Overheads 1,112,944 33,008
Profit (Loss) )
Profit (Loss) brought forward from previous year (168,925) (135,917)
Loss carried forward to balance sheet (1,281,869) (168,925)
Basic Earning Per Share (12.15) (0.37)
Diluted Earning Per Share
1,112,944 33,008
for the year (1,112,944) (33,008
(12.15) (0.37)
BDL DISTILLERIES PRIVATE LIMITED
54
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
Place : ChennaiDate : July 31, 2010
On behalf of the Board
Director
Director
S. NAGARAJAN
G. SRIRAMAN
SCHEDULE A : SHARE CAPITAL
AUTHORISED
900,000
ISSUED, SUBSCRIBED AND PAID UP
20,000,000 (90,000) Equity Shares of Rs.10/- each 200,000,000 900,000
190,000 (89,982) Equity Shares of Rs.10/- each Fully paid up 1,900,000 899,820
200,000,000
1,900,000 899,820
SCHEDULE B : CASH AND BANK BALANCES
ON CURRENT ACCOUNT IN SCHEDULED BANKS
629,185 739,879
SCHEDULE C : CURRENT LIABILITIES
44,124 42,054
(All the above shares are held by Balaji Distilleries Limited and its nominees)
ICICI Bank Ltd 629,185 739,879
Outstanding Liabilities 44,124 42,054
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010
As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
BDL DISTILLERIES PRIVATE LIMITED
SCHEDULE D : OVERHEADS
1,112,944 33,008
Audit Fees 26,472 26,472
Bank Charges 110 112
Certification Charges 2,250 4,224
General Charges -- --
Rates and Taxes 1,084,112 2,200
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED MARCH 31, 2010
For the yearended 31.03.10
(Rs.)
For the yearended 31.03.09
(Rs.)
55
SCHEDULE E : NOTES ONACCOUNTS
1. ACCOUNTING POLICIES
i) Basis ofAccounting
(ii) Deferred Revenue Expenditure
2.
3. RELATED PARTY DISCLOSURES :
a) LIST OF RELATED PARTIESAND RELATIONSHIPS
S.No. Party
(A) Holding Company
(B) Key Management Personnel
b) RELATED PARTY TRANSACTIONS - NIL
4. EARNING PER SHARE (EPS):
2009-10 2008-09Rs. Rs.
5. REMUNERATION TO STATUTORYAUDITORS:
2009-10 2008-09
Rs. Rs.
Financial statements are prepared as a going concern on accrual basis under the historical cost convention
and in accordance with the generally accepted accounting principles.
Preliminary expenses will be written off over a period of 10 years in equal installments from the year in
which the company begins commercial operation.
The company was incorporated in 2003 - 04 and there are no manufacturing or trading operations during the year
under review.
1. Balaji Distilleries Ltd.
1. S. Nagarajan
2. G. Sriraman
Profit (Loss) after Tax attributable to ordinary Shareholders (11,12,944) 94,720,544
WeightedAverage of Equity Share of Rs. 10 each 91,626 89,982
Basic EPS (12.15) (0.37)
Diluted EPS (12.15) (0.37)
i. StatutoryAudit Fee 26,472 26,472
SCHEDULES FORMING PART OF ACCOUNTSFOR THE YEAR ENDED MARCH 31, 2010
BDL DISTILLERIES PRIVATE LIMITED
56
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
Place : ChennaiDate : July 31, 2010
On behalf of the Board
Director
Director
S. NAGARAJAN
G. SRIRAMAN
1. REGISTRATION DETAILS
II CAPITAL RAISED DURING THE YEAR (Amount Rs. in Thousands)
III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount Rs. in thousands)
Sources of Funds
Application of Funds
IV PERFORMANCE OF THE COMPANY (Amount Rs. in thousands)
V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES OF THE COMPANY(As per monetary terms)
Registration No. : U15511TN2003PTC051280 State Code
Balance Sheet Date
Public Issue
Bonus Issue
Total Liabilities Total Assets
Paidup Capital Reserves & Surplus
Secured Loans Unsecured Loans
Net Fixed Assets Investments
Net Current Assets Misc. Expenditure
Accumulated Losses
Turnover Total Expenditure
Profit / (Loss) Before Tax Profit / (Loss) After Tax
Earnings per Share (Rs.) Dividend Rate (%)
Item Code (ITC Code) Product / Service Description
Private Placement
Rights IssueExisting Share Holders
N A
N I L
1 9 0 0
1 9 0 0
1 2 8 2
5 8 5
N I L
N I L
1 9 0 0
N I L
N I L
N I L
N I L
(-) 1 1 1 3
(-) 1 2 . 1 5
3 3
1 1 1 3
(-) 1 1 1 3
1 0 0 0
N I L
N I L
N I L
1 8
3 1 0 3 2 0 1 0
N A
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
BDL DISTILLERIES PRIVATE LIMITED
Place : ChennaiDate : July 31, 2010
On behalf of the Board
G. SRIRAMANDirector
S. NAGARAJANDirector
57
BDL DISTILLERIES PRIVATE LIMITED
58
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
For the year ended31.03.2010
Rs.
For the year ended31.03.2009
Rs.
CASH FROM OPERATING ACTIVITIES:
Operating Profit Before Working Capital Changes
Adjusted for:
Cash Generated From Operations (1,110,874) (220,020)
Net Cash From (Used) Operating Activities
CASH FLOW FROM INVESTING ACTIVITIES: (B)
(A)
(1,112,944) (33,008)
(1,110,874) (220,020)
CASH FLOW FROM FINANCING ACTIVITIES: (C)
1,000,180 791,820
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (110,694) 571,800
Cash and cash equivalent as on 31.03.10 629,185 739,879
Cash and cash equivalent as on 31.03.09 739,879 168,079
(110,694) 571,800
Net Profit Before Tax and Extraordinary Items (33,008)
Trade Receivables
Trade Payables
Paid
Purchase
(1,112,944)
– --
2,070 (187,012)
Interest – --
/ Sale of Assets – –
– –
Proceeds from Share application money – –
Proceeds from Share Capital 1,000,180 791,820
Notes:
1) The above cash flow statement has been prepared under the "Indirect Method" as set out in the AccountingStandard - 3 on Cash Flow Statements.
2) The reconciliation to the cash and bank balances as given in the Balance Sheet is as follows:
Place : ChennaiDate : July 31, 2010
On behalf of the Board
Director
Director
S. NAGARAJAN
G. SRIRAMAN
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
SEVENTH ANNUAL REPORT 2009 - 2010
Board of Directors Shri S Nagarajan
Auditors M/s P.A. Reddy & Co.
Chartered Accountants
Chennai - 600 017
M/s PKF Sridhar & Santhanam
Chartered Accountants
Chennai - 600 004
Bankers ICICI Bank Limited
Bank of Baroda
Standard Chartered Bank
Registered Office
Shri M Satesh Kumaar
Mount Tiruvallur High RoadAranvoyal VillageTiruvallur District 602 025Tamilnadu
CHENNAI BREWERIES PRIVATE LIMITED
59
Your Directors have pleasure in presenting the Seventh Annual Report together with the Audited Accounts of the
Company for the financial year ended 31st March, 2010.
Your Company was incorporated as a Subsidiary of the holding company and incurred an expenditure of
Rs.8,41,105/-. After brought forward loss of Rs.9.95,687/- from previous years, loss carried forward to the Balance
Sheet is Rs.18,36,791/- as on 31st March, 2010.
During the year your company has increased the authorised share capital from Rs.15 crores to Rs.30 crores.
Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors’
Responsibility Statement, it is hereby confirmed:
(i) that in the preparation of the Annual Accounts for the financial year ended 31st March, 2010, the applicable
accounting standards had been followed along with proper explanations relating to material departures;
(ii) that the accounting policies implemented by the Company have been applied consistently, judgments and
estimates have been reasonable and prudent thereby giving a true and fair view of the state of affairs of the
Company at the end of the
(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the CompaniesAct, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) that the annual accounts were prepared for financial year ended 31st March, 2010 on a 'going concern' basis.
There is no employee falling within the purview of Section 217 (2A) of the CompaniesAct, 1956.
Since the Company is yet to commence its operations, providing the details as required under the Companies
(Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, does not arise.
The Directors wish to express their sincere thanks to the Bankers/Central Government/Government of Tamilnadu.
SHARE CAPITAL
DIRECTORS’RESPONSIBILITY STATEMENT
PARTICULARS OF EMPLOYEES
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
AUDITORS
ACKNOWLEDGEMENT
of financial year and of the loss of the Company for the period under review;
M/s P.A. Reddy & Co., Chartered Accountants and M/s PKF Sridhar & Santhanam, Chartered Accountants, Auditors
of the Company hold office until the conclusion of the Seventh Annual General Meeting and are eligible for
reappointment as referred in the Notice to the Share Holders.
With regard to the observation of the Auditors in their report, the Board of Directors wish to state that, since the
Company is yet to commence its commercial operations the establishment of InternalAudit System does not arise.
DIRECTORS’ REPORT TO THE SHAREHOLDERS
Place : ChennaiDate : August 16, 2010
By order of the Board
M SATESH KUMAARDirector
S. NAGARAJANDirector
CHENNAI BREWERIES PRIVATE LIMITED
60
AUDITORS’ REPORT TO THE MEMBERS OFCHENNAI BREWERIES PRIVATE LIMITED
1)
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books.
c) The Balance Sheet, 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, Profit and LossAccount and Cash Flow Statement dealt with by this Report
are in compliance with the accounting standards referred to in Section 211(3C) of the CompaniesAct, 1956.
e) On the basis of written representations received from the Directors of the Company as at 31st March 2010
and taken on record by the Board of Directors, in terms of clause (g) of subsection (1) of section 274 of the
Companies Act, 1956, we report that none of the Directors is disqualified as on 31st March 2010 from being
so appointed as Director of the Company.
f) In our opinion and to the best of our information and according to the explanations given to us, the said
accounts read together with the schedules and notes thereon give the information required by the
CompaniesAct,1956, in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India :
-
We have audited the attached Balance Sheet of Chennai Breweries Private Limited as at March 31, 2010, the
Profit and Loss account and Cash Flow Statement of the Company for the year ended on that date, annexed
thereto. 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.
2) We conducted our audit in accordance with 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 of material misstatements. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by the management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for our opinion.
3) As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of
section 227(4A) of the CompaniesAct, 1956, we enclose in theAnnexure, a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4) Further to our comments in the annexure referred to in paragraph 3 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.
In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010,
- In the case of the Profit and LossAccount, of the loss for the year ended on that date.
- In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.
CHENNAI BREWERIES PRIVATE LIMITED
61
Place : ChennaiDate : July 31, 2010
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
CHENNAI BREWERIES PRIVATE LIMITED
62
ANNEXURE TO THE AUDITORS’ REPORT OFCHENNAI BREWERIES PRIVATE LIMITED
[Referred to in paragraph 3 of our report of even date]
Based on the information and explanation furnished to us and the books and records examined by us in the normal
course of our audit, we report that to the best of our knowledge and belief:
i. In respect of Fixed Assets, the Company does not own any fixed assets and hence, provisions of clause 4 (i) of
the Order are not applicable to the Company.
ii. In respect of inventory, since the Company has not commenced with commercial operations and there being no
inventory, the provisions of clause 4 (ii) of the Order are not applicable to the Company.
iii. In respect of loans, secured or unsecured, granted or taken by the Company, to / from Companies, firms or other
parties covered in the register maintained under section 301 of the Companies Act, 1956 the Company has not
granted or taken any loan.
iv. In respect of Internal control procedures, there are adequate Internal Control Systems commensurate with the
size of the Company and the nature of its business. Since the Company has not commenced with commercial
operations, company has not purchased any inventory and fixed assets or sold any goods and services. Further,
on the basis of our examination of the books and records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal control system.
v. In respect of transactions that need to be entered into a register in pursuance of section 301 of the CompaniesAct
a. Particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been
entered in the Register required to be maintained under that section
b. There are no such transactions, which are in excess of Rs 5 lakhs in respect of any party.
vi. In respect of public deposits, the Company has not accepted any deposits from the public within the meaning of
section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of deposits) Rules, 1975
and therefore the provisions of paragraph 4(vi) of the Order are not applicable to the Company.
vii. In respect of internal audit system, in our opinion,
viii. In respect of cost records, according to the information and explanations given to us, the Central Government
has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, for any of
the products of the Company and therefore the provisions of paragraph 4(viii) of the Order are not applicable to
the company.
ix. In respect of statutory dues, since the Company has not commenced its operations, there is no liability with
regard to statutory dues and hence, the provisions of clause 4 (ix) of the Order are not applicable to the Company.
x. In respect of losses, the accumulated losses of the company as at March 31, 2010 are not in excess of 50% of the
networth. The company has incurred cash loss during the year ended on that date and in the immediately
preceding year.
xi. The Company does not have any dues to financial institutions, banks and/or debenture holders, hence, the
provisions of paragraph 4 (xi) of the Order are not applicable to the Company.
xii. In respect of loans on the basis of security by way of pledge of shares, debentures and other securities, the
company has not granted any loans and advances on the basis of security by way of pledge of shares,
debentures and other securities. Hence, the provisions of paragraph 4 (xii) of the Order are not applicable to the
Company.
xiii. In respect of applicability of any special statutes, the company is not a chit fund or nidhi/mutual benefit
fund/society. Hence, the provisions of clause4 (xiii) of the Order are not applicable to the Company.
xiv. In respect of dealing in shares, securities, debentures and other investments, the Company is not dealing in or
trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of
the Order are not applicable to the Company.
the company does not have internal audit system
commensurate with its size and nature of its business.
CHENNAI BREWERIES PRIVATE LIMITED
63
xv. In respect of guarantees by the Company for the loan taken by others from banks or financial institutions, the
Company has given no such guarantees, hence, the provisions of clause 4 (xv) of the Order are not applicable to
the Company.
xvi. In respect of utilization of term loans, the Company has not availed any term loan and hence, the provisions of
clause 4 (xvi) of the Order are not applicable to the Company.
xvii. The Company has not raised any funds on short term basis and hence, the provision of clause 4 (xvii) of the Order
are not applicable to the Company.
xviii. In respect of preferential allotment of shares, according to the information and explanations given to us, during
the period covered by our audit report, the Company has not made preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the CompaniesAct, 1956.
xix. In respect of issue of debentures, according to the information and explanations given to us, the Company has
not issued any debentures during the year nor are any debentures outstanding at the end of the accounting year.
xx. In respect of public issues, the Company is a private company, hence the matters to be reported as per
paragraph 4(xx) of the Order are not applicable to the Company.
xxi. In respect of frauds, in our opinion and according to the information and explanations given to us, no material
fraud on or by the Company has been noticed or reported during the course of our audit.
Place : ChennaiDate : July 31, 2010
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
A
B
Total 217,042,093
APPLICATION OF FUNDS
Current Assets, Loans & Advances
C
D
E
Net Current Assets
MISCELLANEOUS EXPENDITURE
PROFIT AND LOSS ACCOUNT - Debit Balance
Total
NOTES ON ACCOUNTS G
Share Capital 150,000,000 150,000,000
Unsecured Loan from Holding Company 67,042,093 --
Loans and advances 115,000,000
Cash and Bank Balances 100,198,784 33,997,795
215,198,784 148,997,795
Less: Current Liabilities and Provisions
- Current Liabilities
- Provisions – –
32,990 32,990(To the extent not written off or adjusted)
1,836,791 995,687
150,000,000
217,042,093 150,000,000
115,000,000
26,472 26,472
215,172,312 148,971,323
BALANCE SHEET AS AT MARCH 31, 2010
Schedule 31.03.10 31.03.09
The schedules referred above, form part of the Accounts.This is the Balance Sheet referred to in our report of even date.
(Rs.) (Rs.)(Rs.) (Rs.)
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
Place : ChennaiDate : July 31, 2010
On behalf of the Board
Director
Director
S. NAGARAJAN
M. SATESH KUMAAR
CHENNAI BREWERIES PRIVATE LIMITED
64
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
Place : ChennaiDate : July 31, 2010
On behalf of the Board
Director
Director
S. NAGARAJAN
M. SATESH KUMAAR
Income from operations - -
Overheads
Profit (Loss)
Profit (Loss) brought forward from previous year
Loss carried forward to balance sheet
Expenditure
F 841,104 875,133
for the year (841,104) (875,133)
s (995,687) (120,554)
(1,836,791) (995,687)
Basic Earning Per Share (0.06) (0.06)
Diluted Earning Per Share (0.06) (0.06)
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
The schedules referred above, form part of the Accounts.This is the Profit and Loss Account referred to in our report of even date.
CHENNAI BREWERIES PRIVATE LIMITED
65
SCHEDULE A : SHARE CAPITAL
AUTHORISED
ISSUED, SUBSCRIBED AND PAID UP
, 0,00,000 ( ) Equity Shares of Rs.10/- each 150,000,0003 0 1,50,00,000 300,000,000
1,50,00,000 (1,50,00,000) Equity Shares of Rs.10/- each Fully paid up 150,000,000 150,000,000
Balaji Distilleries Limited 67,042,093 –
UNSECURED AND CONSIDERED GOOD
Advance purchase consideration for purchase of brewery 115,000,000 115,000,000
Petty Cash 5,773 2,721
ICICI Bank Ltd 41,030 885,131
Bank of Baroda - Current A/c 100,151,981 33,109,943
Outstanding Liabilities 26,472 26,472
300,000,000 150,000,000
150,000,000 150,000,000
SCHEDULE B : UNSECURED LOAN FROM HOLDING COMPANY
67,042,093
SCHEDULE C : LOANS AND ADVANCES
115,000,000 115,000,000
SCHEDULE D : CASH AND BANK BALANCES
ON CURRENT ACCOUNT IN SCHEDULED BANKS
100,198,784 33,997,795
SCHEDULE E : CURRENT LIABILITIES
26,472 26,472
(All the above shares are held by Balaji Distilleries Limited and its nominees)
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010
As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
CHENNAI BREWERIES PRIVATE LIMITED
SCHEDULE F : OVERHEADS
841,104 875,133
Audit fees 26,472 26,472
Rates and Taxes 783,867 843,491
Bank charges 192 2,170
General Charges – --
Certification Fee 12,250 3,000
Printing and Stationery 17,315 --
Donation 1,008 --
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED MARCH 31, 2010
66
For the yearended 31.03.10
(Rs.)
For the yearended 31.03.09
(Rs.)
SCHEDULE G : NOTES ONACCOUNTS
1. ACCOUNTING POLICIES
(i) Basis ofAccounting
(ii) Deferred Revenue Expenditure
2.
3. REMUNERATION TO STATUTORYAUDITORS:
2009-10 2008-09
Rs. Rs.
4. RELATED PARTY DISCLOSURES :
LIST OF RELATED PARTIESAND RELATIONSHIPS
S.No. Party
(A) Holding Company
(B) Key Management Personnel
5. RELATED PARTY TRANSACTIONS:
2009-10 2008-09Rs. Rs.
Particulars Holding Company Holding Company
Financial statements are prepared as a going concern on accrual basis under the historical cost convention
and in accordance with the generally accepted accounting principles.
Preliminary expenses will be written off over a period of 10 years in equal installments from the year in which
the company begins commercial operation.
The company was incorporated in 2003-04 and there are no manufacturing or trading operations during the year
under review.
i. StatutoryAudit Fee 26,472 26,472
1. Balaji Distilleries Ltd.
1. S. Nagarajan
2. M. Satesh Kumaar
Advance (Net) 4,79,57,907 11,50,00,000
SCHEDULES FORMING PART OF ACCOUNTSFOR THE YEAR ENDED MARCH 31, 2010
CHENNAI BREWERIES PRIVATE LIMITED
67
Place : ChennaiDate : July 31, 2010
On behalf of the Board
Director
Director
S. NAGARAJAN
M. SATESH KUMAAR
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
1. REGISTRATION DETAILS
II CAPITAL RAISED DURING THE YEAR (Amount Rs. in Thousands)
III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount Rs. in thousands)
Sources of Funds
Application of Funds
IV PERFORMANCE OF THE COMPANY (Amount Rs. in thousands)
V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES OF THE COMPANY(As per monetary terms)
Registration No. : U15531TN2003PTC051279 State Code
Balance Sheet Date
Public Issue
Bonus Issue
Total Liabilities Total Assets
Paidup Capital Reserves & Surplus
Net Fixed Assets Investments
Net Current Assets Misc. Expenditure
Accumulated Losses
Turnover Total Expenditure
Profit / (Loss) Before Tax Profit / (Loss) After Tax
Earnings per Share (Rs.) Dividend Rate (%)
Item Code (ITC Code) Product / Service Description
Private Placement
Rights Issue
Secured Loans Unsecured Loans
N I L N I L
N I L
N I L N I L
2 1 7 0 4 2
1 5 0 0 0 0
2 1 7 0 4 2
6 7 0 4 2
1 8
3 1 0 3 2 0 1 0
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
Place : ChennaiDate : July 31, 2010
On behalf of the Board
S. NAGARAJANDirector
M. SATESH KUMAARDirector
CHENNAI BREWERIES PRIVATE LIMITED
68
N A
N I L
N I L
N I L
2 1 5 1 7 2
(-) 8 4 1
(-) 0 . 0 6
(-) 8 4 1
1 8 3 7
3 3
N I L
N I L
8 4 1
N A
CHENNAI BREWERIES PRIVATE LIMITED
69
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
For the year ended31.03.2010
Rs.
For the year ended31.03.2009
Rs.
CASH FROM OPERATING ACTIVITIES:
Operating Profit Before Working Capital Changes
Adjusted for:
Cash Generated From Operations (841,104) (116,077,727)
Net Cash From (Used) Operating Activities
CASH FLOW FROM INVESTING ACTIVITIES: (B)
(A)
(841,104) (875,133)
(841,104) (116,077,727)
CASH FLOW FROM FINANCING ACTIVITIES: (C)
67,042,093 149,892,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 66,200,989 33,814,274
Cash and cash equivalent as on 31.03.10 100,198,784 33,997,795
Cash and cash equivalent as on 31.03.09 33,997,795 183,521
66,200,989 33,814,274
Net Profit Before Tax and Extraordinary Items (875,133)
Trade Receivables
Trade Payables
Paid
Purchase Assets
(841,104)
– (115,000,000)
-- (202,594)
Interest – --
/ Sale – –
– –
Proceeds from Borrowings 67,042,093 –
Proceeds from Share Capital -- 149,892,000
Notes:
1) The above cash flow statement has been prepared under the "Indirect Method" as set out in the AccountingStandard - 3 on Cash Flow Statements.
2) The reconciliation to the cash and bank balances as given in the Balance Sheet is as follows:
Place : ChennaiDate : July 31, 2010
On behalf of the Board
Director
Director
S. NAGARAJAN
M. SATESH KUMAAR
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTSTO THE BOARD OF DIRECTORS OF BALAJI DISTILLERIES LIMITED AND ITS
SUBSIDIARIES
1) We have audited the attached Consolidated Balance Sheet of Balaji Distilleries Ltd (the company) and its
subsidiaries, BDL Distilleries P Ltd and Chennai Breweries P Ltd (collectively called “The Balaji Group”) as at
March 31, 2010, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the
year ended on that date, annexed thereto. 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.
2) We conducted our audit in accordance with 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 of material misstatements. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by the management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for our opinion.
3) We report that the Consolidated Financial Statements have been prepared by the company’s management in
accordance with the requirements of Accounting Standard 21- Consolidated Financial Statements, as mandated
by Companies (Accounting Standards) Rules 2006 and on the basis of separate audited financial statements of
the company and its subsidiaries included in the Consolidated Financial Statements.
4) Though the company has been declared as a Sick Industrial Undertaking, referred to BIFR and has negative
networth, in view of settlement of most of its term liabilities successfully through One Time Settlement (OTS) and
after considering improved operation and the Company’s business plans, the Balaji Group accounts are prepared
as a going concern.
5) Without qualifying our opinion, we draw your attention to Para number 13 of Schedule U to the Consolidated
Balance Sheet. In distillery division, the company has changed to weighted average method for valuing raw
materials, packing materials and stores and spares as against FIFO method followed last year. Given the
magnitude of the transactions, the Management is unable to quantify the impact due to change in accounting
policy.
Based on our audit of the company and its subsidiaries and to the best of our information and according to the
explanations given to us, we are of the opinion that the attached consolidated financial statements, give a true
and fair view in conformity with the accounting principles generally accepted in India :
- In the case of the Consolidated Balance Sheet, of the state of affairs of the Balaji Group as at March 31,
2010,
- In the case of Consolidated Profit and LossAccount, of the loss for the year ended on that date, and
- In the case of the Consolidated Cash Flow Statement, of the Cash Flows for the year ended on that date.
70
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
Place: ChennaiDate : July
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
31, 2010
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2010
71
SOURCES OF FUNDS
1. SHAREHOLDERS' FUNDS
A
B
2. SHARE WARRANTALLOTMENT MONEY
3. LOAN FUNDS
C
D
Total 2,893,339,217APPLICATION OF FUNDS
1. FIXEDASSETS
E
2. INVESTMENTS F
3. CURRENTASSETS, LOANSANDADVANCES
G
H
I
J
K
5. PROFITAND LOSSACCOUNT (Net) T
Total 2,893,339,217NOTES ONACCOUNTS U
a) Capital 1,126,384,600
b) Reserves and Surplus 299,824,327
` – 124,020,000
a) Secured Loans 1,005,033,007
b) Unsecured Loans -- 338,077,283
a) Gross Block 1,561,224,255
b) Less : Depreciation 429,876,253
c) Net Block 1,131,348,002
d) Capital Work-in-progress 375,670,438
-- –
a) Inventories 343,406,529
b) Sundry Debtors 338,389,360
c) Cash and Bank Balances 287,785,039
d) Loans and Advances 119,007,429
1,088,588,357Less: Current Liabilities and Provisions
- Current Liabilities 3,189,239,685
- Provisions 10,709,701
Net CurrentAssets (2,111,361,029)
3,497,615,746
1,430,175,600
981,023,927
680,000,000
2,111,189,855
524,166,473
1,587,023,382
1,427,385
372,244,425
488,170,509
392,127,030
140,016,734
1,392,558,698
3,432,077,566
10,940,306
(2,050,459,174)
66,060 66,060(To the extent not written off or adjusted)
3,553,141,874
3,091,199,527
4. MISCELLANEOUS EXPENDITURE
3,091,199,527
Schedule As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
The schedules referred above, form part of the Accounts.This is the Balance Sheet referred to in our report of even date.
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
Place : ChennaiDate : July 31, 2010
G. SRIRAMANCompany Secretary
S. NAGARAJANChief Financial Officer
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
DirectorV. CHANDRASEKHARA REDDY
On behalf of the Board
R. RAGHURAMManaging Director
CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED MARCH 31, 2010
72
INCOME
L
M
N
Total 6,845,068,800
EXPENDITURE
O
P
Q
R
E
Total 7,046,523,192
S
T
NOTES ONACCOUNTS U
Income from Operations
Gross Income 21,994,444,595 21,964,056,943
Less : TN Vat 8,073,909,500 8,062,754,974
Less: Excise Duty 7,151,053,134 7,168,709,580
Net Income 6,732,592,389
Other Income 48,658,924
Variation In Stocks 63,817,487
Materials 4,238,100,511
Personnel 168,738,267
Overheads 2,203,014,564
Finance Charges 353,147,368
Depreciation 83,522,482
Profit / (Loss) for the year before ExceptionalItems and Prior period adjustments (201,454,392)
Exceptional Items 314,709,203
Loss for the year beforePrior period adjustments 113,254,811
Prior PeriodAdjustments – 103,385
Profit/(Loss) before tax 113,358,196
Provision for Income Tax Earlier Years -- 1,352,305
Provision for Fringe benefit tax – 18,193,487
Profit/(Loss) after tax 93,812,404
Deficit brought forwardfrom previous years (4,100,309,620)
Deficit carried forward to Balance Sheet (4,006,497,216)
Basi Earning Per Share 0.76
6,769,481,961
48,571,136
19,439,259
4,171,719,559
173,086,073
2,196,722,155
274,696,319
96,404,953
(75,136,703)
19,610,575
Profit / ( )(55,526,128)
(55,526,128)
(55,526,128)
(4,006,497,216)
(4,062,023,344)
c (0.45)
Diluted Earning Per Share (0.45) 0.72
6,837,492,356
6,912,629,059
Schedule For the year ended31.03.10
For the year ended31.03.09
The schedules referred above, form part of the Accounts.This is the Profit and Loss Account referred to in our report of even date.
(Rs.) (Rs.)(Rs.) (Rs.)
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
Place : ChennaiDate : July 31, 2010
G. SRIRAMANCompany Secretary
S. NAGARAJANChief Financial Officer
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
DirectorV. CHANDRASEKHARA REDDY
On behalf of the Board
R. RAGHURAMManaging Director
SCHEDULES FORMING PART OF THECONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2010
73
As at 31.03.09(Rs.)
As at 31.03.10(Rs.)
SCHEDULE A : SHARE CAPITAL
AUTHORISED
ISSUED, SUBSCRIBED AND PAID UP
340,999,600 - -
100,000,000 100,000,000
540,024,327 199,824,327
Total (a + b + c + d) 981,023,927 299,824,327
1 ,00,00,000 ( ,00,00,000) Equity Shares
530,175,600Fully Paid up (Refer Note 2 of Schedule U) (Of the above shares2,05,08,780 were allotted as bonus shares of Rs.10 each by wayof Capitalisation of Securities Premium of Rs.11,50,87,800and General Reserve of Rs.9,00,00,000 and 2,35,08,780Shares were allotted on conversion of debentures issued / loansborrowed)
Nil (4,46,20,900) - 6% Optionally Convertible Cumulative -- 446,209,000
a) Capital Reserves
- Opening Balance - - - -
-Add :Additions (Refer Note 3 of Schedule U) 340,999,600 - -
- Less : Deletions - - - -
b) Capital Redemption Reserve 100,000,000 100,000,000
c) Securities Premium
- Opening Balance 199,824,327 199,824,327
- Add :Additions 340,200,000 - -
- Less : Deletions - - --
d) General Reserve
As Per Last Balance Sheet 508,881,470 508,881,470
508,881,470 508,881,470
5 15of Rs.10/- each 1,500,000,000 1,500,000,000
7,50,00,000 (7,50,00,000) Preference Shares of Rs.10/- each 750,000,000 750,000,000
14,30,17,560 (5,30,17,560) Equity Shares of Rs.10/- each 1,430,175,600
Redeemable Preference Shares of Rs.10/- each (Repayable in36 monthly instalments commencing from April 2015, theentire Optionally Convertible Cumulative RedeemablePreference Shares were alloted on part conversion of loans)(Refer Note 3 of Schedule U)
Nil (1,50,00,000)12.5% Cumulative Redeemable Preference -- 150,000,000Shares of Rs.10/- each (Redeemable at par in three equal annualinstalments commencing from December 2001) (Refer Note 3 ofSchedule U)
2,250,000,000 2,250,000,000
Total 1,430,175,600 1,126,384,600
SCHEDULE B : RESERVESAND SURPLUS
Less: Deducted from Debit balance in Profit and Loss account (Schedule T)
SCHEDULES FORMING PART OF THE CONSOLIDATEDBALANCE SHEET AS AT MARCH 31, 2010
74
As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
SCHEDULE C : SECURED LOANS
FROM BANKS
RUPEE TERM LOAN
FROM CORPORATES
OTHER LOANS –
Total 1,005,033,007
680,000,000 935,000,000
70,033,007
Pari-passu first mortgage and charge on all the company'simmoveable and moveable properties (excluding current assets)both present and future.
Pari-passu first mortgage and charge on all the company'simmoveable and moveable properties (excluding currentassets) both present and future and first charge on currentassets of brewery division both present and future.
Inter Corporate Deposit - 335,000,000
Interest Accrued And Due - 3,077,283
680,000,000
SCHEDULE D : UNSECURED LOANS
FROM CORPORATES
Total - 338,077,283
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SCHEDULES FORMING PART OF THE CONSOLIDATEDBALANCE SHEET AS AT MARCH 31, 2010
76
As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
SCHEDULE F : INVESTMENTS
LONG TERM INVESTMENTS – --
Total -- --
Aggregate Net Asset Value of Mutual Fund Investments
Aggregate value of unquoted Investments
(at cost less provision for other than temporary dimunition in the value)
– --
Aggregate Market Value of quoted Investments
Purchase during the year
Sales / Redemption during the year
SCHEDULE G : INVENTORIES
Total 372,244,425 343,406,529
SCHEDULE H : SUNDRY DEBTORS
Total 488,170,509 338,389,360
-- --
-- --
Prudential ICICI Liquid Super Institutional Growth Plan FundNil (21,79,53,104) Units -- 2,618,000,000
Prudential ICICI Liquid Super Institutional Growth Plan FundNil (23,12,34,957) Units – 2,775,657,086
Nil (72) Equity Shares of Rs.10/- each in -- 2,526
Nil (450) Equity Shares of Rs.10/- each in -- 3,000
Nil (10,000) Equity Shares of Rs.10/- each in -- 442,000
[at lower of cost and net realisable value]
[As certified by management]
Fuel Oil 3,852,147 1,667,665
Raw Materials 104,943,461 87,958,392
Packing Materials 63,195,411 78,468,459
Stores & Spares 57,440,199 51,938,065
Finished Goods 84,911,199 73,068,146
Work-in-Process 59,909,529 52,313,323
374,251,946 345,414,050
Less : Provision for obsolete stock 2,007,521 2,007,521
Unsecured:Debts outstanding for more than six months
Considered good 4,729,419 9,806,520
Considered doubtful 1,755,400 1,755,400
6,484,819 11,561,920
Other Debts
Considered good 483,441,090 328,582,840
489,925,909 340,144,760
Less : Provision for Doubtful debts 1,755,400 1,755,400
United Spirits Ltd
Balaji Industrial Corporation Ltd
Balaji Hotels and Enterprises Ltd
SCHEDULES FORMING PART OF THE CONSOLIDATEDBALANCE SHEET AS AT MARCH 31, 2010
77
As at 31.03.10(Rs.)
As at 31.03.09(Rs.)
SCHEDULE I : CASH AND BANK BALANCES
BALANCES WITH SCHEDULED BANKS
Total 392,127,030 287,785,039
SCHEDULE J : LOANS, ADVANCES AND DEPOSITS
Total 140,016,734 119,007,429
Cash on Hand 1,392,627 1,107,281
Cheques on Hand 1,664,928 98,007,266
In Current Account 194,349,232 75,800,687
In Deposit Account 194,720,243 112,869,805
Loans (Unsecured and Considered good):
To Others -- --
Advances recoverable in cash or kind or for value to be received
(Unsecured)
Considered good : 98,013,560 84,847,149
Advance Leave Encashment / Gratuity with LIC 3,191,296 3,524,420
Considered doubtful 2,038,762,660 2,039,462,660
Income Tax (net of provision) 23,303,607 12,981,171
Deposits 15,508,271 17,654,689
2,178,779,394 2,158,470,089
Less : Provision for doubtful advances 2,038,762,660 2,039,462,660
SCHEDULE K : CURRENT LIABILITIES AND PROVISIONS1. CURRENT LIABILITIES
Total 3,432,077,566 3,189,239,685
2. PROVISIONS
Total 10,940,306 10,709,701
Total [1+2] 3,443,017,872 3,199,949,386
SCHEDULE T : PROFIT AND LOSS ACCOUNT
Total 3,553,141,874 3,497,615,746
Sundry Creditors
- Dues to Small & Micro Enterprises – –
- Others
- For Materials 236,238,738 302,693,181
- For Capital Goods 8,110,363 27,673,336
- For Others 3,187,728,465 2,858,873,168
Employee Benefits 10,560,231 9,270,194
Provision for Gratuity – 1,003,732
Wealth Tax 380,075 435,775
Deficit in Profit and Loss Account 4,062,023,344 4,006,497,216
Less : General Reserve (As per schedule B) 508,881,470 508,881,470
SCHEDULES FORMING PART OF THE CONSOLIDATEDPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
78
For the yearended 31.03.10
(Rs.)
For the yearended 31.03.09
(Rs.)
SCHEDULE L : INCOME FROM OPERATIONS
Total 6,732,592,389
Total
Closing Stocks
Less : Opening Stocks
Total 63,817,487
Net Sales
- IMFL 4,946,757,303
- Beer 1,785,835,086
Scrap Sales 10,580,031
Interest on others
Profit on sale of Current Investments – 10,384,639
Profit on sale of assets 209,448
Difference in Exchange 389,860
Trade liabilities written back – 3,499,969
Provisions no longer required --
Sale of Spent Malt 9,152,896
Miscellaneous 2,367,231
Finished Goods 73,068,146
Work-in-Process 52,313,323
Finished Goods
Work-in-Process
4,769,570,273
1,999,911,688
15,571,400
[TDS Rs.713,987 (2,577,732)] 8,064,749 12,074,850
88,229
853
770,174
23,160,081
915,650
84,911,199
59,909,529
73,068,146 20,797,388
52,313,323 40,766,594
166,426,851 157,315,617
4,173,431,580 4,247,211,745
4,339,858,431 4,404,527,362
168,138,872 166,426,851
Salaries, Wages and Bonus 139,143,010 139,609,032
Contribution to PF and Other Funds 15,287,663 13,904,713
Staff Welfare & Career Development 18,655,400 15,224,522
6,769,481,961
SCHEDULE M : OTHER INCOME
48,571,136 48,658,924
SCHEDULE N : VARIANCE IN STOCKS
19,439,259
SCHEDULE O : MATERIALS
[CONSUMPTION OF GOODS AND MATERIALS]
Opening Stock
Add: Purchases
Less: Closing Stock
Total 4,171,719,559 4,238,100,511
SCHEDULE P : PERSONNEL
Total 173,086,073 168,738,267
SCHEDULES FORMING PART OF THE CONSOLIDATEDPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
79
For the yearended 31.03.10
(Rs.)
For the yearended 31.03.09
(Rs.)
SCHEDULE Q : OVERHEADSFACTORY
REPAIRS AND MAINTENANCE
Total [a] 409,684,378 460,018,994
1,722,802,378
SCHEDULE S : EXCEPTIONAL ITEMS
19,610,575 314,709,203
Power and Fuel 293,567,186 294,334,471Consumables 34,079,367 23,144,682
- Building 12,356,298 20,814,309- Machinery 48,189,830 64,087,277- Others 4,931,539 5,744,108Provision for Obsolte Stock – 2,007,521Insurance 6,702,247 5,178,012Excise Duty - on opening and closing stock (Net) 9,857,911 36,948,478Extra Excise Duty – 7,760,136
167,726,355427,966,462253,938,693873,170,868
Waiver of Dues by lenders 19,610,575 22,498,473Provision for doubtful advances -- (12,000,000)Provision for doubtful advances no longer required written back -- 79,411,532Relinquishment of rights of assets to RSEB -- 162,702,899Lease income from RSEB (TDS Rs.11,073,420/-) -- 16,727,013Interest income from RSEB -- 48,867,695Poompuhar Shipping Corporation - Charter Hire (TDS Rs.401,177/-) -- 17,701,591Share of settlement of Corporate Guarantee -- (21,200,000)
ADMINISTRATION
Total [b] 64,235,399 55,931,401
SELLING
Total [c] 1,687,064,169
Total [a+b+c] 2,196,722,155 2,203,014,564
SCHEDULE R : FINANCE
Total 274,696,319 353,147,368
Rent 3,845,321 3,896,465Rates and Taxes 8,744,487 6,125,242Printing and Stationery 2,303,229 2,015,793Travelling and Conveyance 2,533,901 2,345,506Communication Expenses 2,341,610 2,036,458Vehicle Maintenance 10,656,757 10,851,227Remuneration to Directors 2,797,500 2,437,500Sitting Fees 40,000 35,000Audit Fees and Expenses 2,235,990 2,289,383Professional Charges 12,466,978 11,242,845Donations 34,013 26,200Excise Establishment 11,123,469 6,938,480Loss on Sale of Assets 578,096 2,490,746General Expenses 4,153,848 2,243,064Bad advances writtenoff - 521,717Wealth Tax 380,200 435,775
Cash Discount 168,337,417Other Selling Expenses 400,616,646Freight and Handling 219,566,916Payment to Brand Owners 898,543,190
Interest - Fixed Loans 145,506,407 169,527,236Interest - Other Loans – 6,494,759Other Finance Charges 129,189,912 177,125,373
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS
1. ACCOUNTING POLICIES :
(i) Basis of consolidation
a) Basis of preparation
b) Principles of consolidation
Company Relationship Country of Incorporation Proportion of ownership
(ii) Basis ofAccounting
(iii) FixedAssets
(iv) Expenditure During Construction period
(v) Borrowing Costs
(vi) Depreciation
(vii) Inventories
The consolidated financial statements are prepared in accordance with Accounting Standard 21 on
Consolidated Financial Statements issued by the Institute of CharteredAccountants of India.
The consolidated financial statements comprise the financial statements of Balaji Distilleries Limited
and the following companies:
BDLDistilleries Pvt Ltd Subsidiary India 100%Chennai Breweries Pvt Ltd Subsidiary India 100%
Financial statements are prepared as a going concern on accrual basis under the Historical cost convention
and in accordance with the generally accepted accounting principles.
FixedAssets are stated at cost less accumulated depreciation. Cost is inclusive of freight, duties, taxes and
all directly attributable costs of bringing the assets to their working condition for intended use.
At the balance sheet date, an assessment is done to determine whether there is any indication of
impairment in the carrying amount of the company’s fixed assets. If any such indication exists, the asset’s
recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an
asset exceeds its recoverable amount.
After recognition of impairment loss, the depreciation charge for the asset is adjusted in future periods to
allocate the asset’s revised carrying amount, less its residual value (if any), on Straight Line basis over its
remaining useful life.
Expenditure incurred during construction period is included under capital work-in progress and is
capitalised when the asset is ready for commercial use. Expenditure in connection with Project
implementation in so far as such expenditure relates to the period prior to commencement of commercial
production is also included under Capital work in progress.
Borrowing costs that are attributable to construction of qualifying assets are capitalised as part of cost of
such assets till such time the asset is ready for its intended use. A qualifying asset is an asset that
necessarily requires a substantial period of time to get ready for its intended use. All other borrowing costs
are recognised as an expense in the period in which they are incurred.
Assets given on lease net of residual value are depreciated over the primary lease period and depreciation
on all other assets is provided on straight line basis at the rates specified in Schedule XIV of the Companies
Act, 1956. Depreciation on additions and deletions during the year is provided on Pro-rata Basis.
Inventories are valued at cost or net realisable value whichever is lower and the cost is determined as
follows:
SCHEDULES FORMING PART OF ACCOUNTSFOR THE YEAR ENDED MARCH 31, 2010
80
Raw materials & Packing Materials : Distillery: On Weighted Average basis and cost includes
expenses of procurement, excise and other duties.
Brewery: On FIFO basis and cost includes expenses of
procurement, excise and other duties
Finished Goods : Cost includes appropriate share of related overheads and excise
duty payable on such goods
Work in Progress : Cost includes appropriate share of related Overheads
Stores and Spares : Distillery: On Weighted Average basis and cost includes
expenses of procurement, excise and other duties.
Brewery: On FIFO basis and cost includes expenses of
procurement, excise and other duties
Long term investments are valued at cost, after providing for any diminution other than temporary in value.
Current investments are valued at cost or market price whichever is lower. Income from investments is
recognised in the year in which it accrues.
Gross Sales includes Excise Duty, TN Vat collected and is net of trade discount.
Excise Duty has been accounted on the basis of payments made in respect of goods cleared and provision
is made for goods lying as closing stock at the year end.
Contributions to defined contribution schemes such as provident fund and family pension fund are accrued
on actual liability basis. In respect of defined benefit plans like Contributions to gratuity, Superannuation
and Leave Encashment, these are accrued in accordance with the terms of the scheme of the Life
Insurance Corporation of India, the liability whereof is determined using projected Unit Credit Method as
provided inAccounting Standard 15 Revised.
All foreign currency transactions are accounted for at the rates prevailing on the dates of the transaction.
Foreign currency liabilities are converted at the year end rates as applicable.
The exchange difference on settlement / conversion are adjusted to a) cost of imported fixed assets, if the
foreign currency liability relates to fixed assets upto March 31, 2007 and b) Profit and Loss account, in all
other cases.
Tax on Income for the current period is determined on the basis of taxable income and tax credits computed
in accordance with the provisions of Income TaxAct 1961.
Deferred Tax is recognised on timing differences between the accounting income and the taxable income
for the year and quantified using the tax rates and laws prevailing as on the Balance Sheet date. Where
there is a carry forward loss or unabsorbed depreciation, deferred tax asset is created only if the set off is
virtually certain.
All possible obligations that arise from past events and existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
company are recognised as contingent liabilities and disclosed by way of notes to the accounts.
(viii) Investments
(ix) Sales
(x) Excise Duty
(xi) Employee Benefits
(xii) Foreign Currency Transactions
(xiii) Current and Deferred Tax
(xiv) Contingent Liabilities
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
81
a) Revenue and expenses have been identified to the segment on the basis of relationship to operating
activities of the segment. Revenue and expenses which relate to the enterprise as a whole and which
are not allocable to a segment on reasonable basis have been disclosed as unallocable.
b) Segment assets and segment liabilities represent asset and liabilities in respective segments. Other
assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed
as unallocable.
During the year, the Company has allotted 9,00,00,000 equity shares at Rs.13.78 each including Share premium
of Rs.3.78 each consequent upon conversion of 9,00,00,000 Convertible Warrants. An amount equivalent to the
proceeds of issue of Rs.124,02,00,000/-, interalia has been utilized as under:
Particulars Rs.
Towards Redemption of Preference Shares 75,000,000
Towards Redemption of OCCRPS 180,209,400
Towards Payment to Institutions and Banks for OTS 405,489,625
Towards Payment of VAT 252,800,000
Towards Capital Expenditure 326,700,975
During the year, the outstanding Cumulative Redeemable Preference Shares have been redeemed out of fresh
issue of Equity Shares.
In respect of the 12.5% Cumulative Redeemable Preference Shares with a redemption value of
Rs.150,000,000/-, redemption of entire shares has been made during the year at a discount of Rs.5/- per share
which aggregates to Rs.75,000,000/-.
In respect of 6% Optionally Convertible Cumulative Redeemable Preference Shares with a redemption value of
Rs.446,209,000/-, redemption of entire shares has been made during the year at a discount of Rs.5.96 per share
which aggregates to Rs. 265,999,600/-.
The total discount on redemption aggregating to Rs.340,999,600/- has been credited to capital reserve.
During the year the Interest payable on Debentures issued to an institution have been fully settled under one time
settlement. In view of this an amount of Rs.19,610,575 (Rs.22,498,473) has been written back to Profit and Loss
account as exceptional item.
a) Secured loan with bank is secured by pari-passu first mortgage and charge on all the company’s immovable
and moveable properties (excluding current assets) both present and future.
b) Secured loan has been guaranteed by one of the promoters Mr.M.Sreenivasulu Reddy.
c) Secured loan is also collaterally secured by a real estate property of a company owned by associates,
friends, relatives and well wishers of the promoters.
(xv) Segment Reporting
2. EQUITY SHARES :
3. PREFERENCE SHARES :
4. ONE TIME SETTLEMENT WITH LENDERS:
5. SECURED LOANS :
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
82
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
83
6. A. CONTINGENT LIABILITIES:
B. CAPITAL COMMITMENTS
i Sales Tax:
a) For the Assessment years 1986-87 to 1988- 89, the company haswon its case before STAT. However, the department has appealed tothe Sales Tax Special Tribunal. In the absence of details of thegrounds of appeal filed by the department, the amount disputed bythe department could not be quantified.
b) For the Assessment year 1996-97, in the erstwhile Shipping divisionan appeal filed by the Sales tax department before STAT wasallowed. Aggrieved by the order, the company appealed before theHonourable High Court of Madras and got an interim stay order.
c) For the Assessment years 1985-86 & 1986-87, a demand for interesthas been raised through a notice U/Sec 24(3) of the TNGSTAct,1959. When the same was challenged by the company, theHon’ble Madras High Court granted interim injunction and stay afterremittance of Rs.1.00 Crore by the company. Accordingly, thecompany remitted the amount and simultaneously is pursuing thewaiver of interest through industry association before the Tamil NaduState Government. The company is contemplating the option ofsettling the above disputed liabilities under the Samadhan schemeintroduced under Tamil Nadu sales tax (Settlement of Arrears)Act, 2010.
d) In respect of the completed Assessment for the year 2000-01, theSales tax department issued a revision notice proposing levy ofSales tax on the sale of ships. On the challenge by the company, theHon’ble Madras High Court granted interim injunction.
e) The company is contemplating the option of settling the abovedisputed liabilities under the Samadhan scheme introduced underTamil Nadu Sales Tax (Settlement ofArrears)Act, 2010.
ii. Income Tax:
a) For the Assessment years 2002-03 & 2004-05 the companyappealed before CIT (A) against the order of assessing officer.
b) In respect of the Assessment years 1986-87 to 1990-91 the Incometax department appeals against allowance of Commission/Marketing expenses are pending before the Madras High Court.
c) In respect of Assessment years 1994-95 to 2002-03, the Income Taxdepartment’s appeals against sale and lease back transactions, arepending before the Madras High Court.
iii. State Excise Duty:
a) During the year 2007-08 the company has Imported special spirits bypaying Rs.1/- per litre as import permit fee. However based on AG’saudit, the excise department issued notice for Rs.5/- per litre. Thecompany appealed before High court of madras and gotan interim injection order.
The state Government has amended the rule on 18.05.2010imposing import fee at Rs.5/- retrospectively from 2000 onwards.The Excise department has demanded additional payment andcompany has challenged the demand before High court Madras andgot an interim injunction.
337,772,997
498,098,515
204,205,978
498,098,515
Nil
Notquantifiable
Notquantifiable
No DemandQuantified yet
43,783,163 43,783,163
135,171,318135,171,318
Nil
Nil
Nil
103,753,938
30,167,522
3,189,996
13,098,924
2,000,000
2009-10Rs.
2008-09Rs.
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
84
8. REMUNERATION TO STATUTORYAUDITORS: 2009-10 2008-09Rs. Rs
9. PRIOR PERIOD EXPENDITURE:
Included under Head ofAccount 2009-10 2008-09Rs. Rs.
Total - 1,03,385
10. [A] LICENCEDAND INSTALLED CAPACITY :
Indian Made Foreign Liquor (IMFL):
2009-10 2008-09
Beer :
.
i. StatutoryAudit Fee 1,707,444 1,707,444
ii. TaxAudit Fee 424,656 424,655
iii. Certificate / Other services 55,150 92,197
iv. Out of Pocket Expenses 48,740 65,087
Items relating to prior periods have been (debited) / credited to the Profit and Loss Account under the followingAccount Heads:
Interest Income - (3,21,398)
Rent - (49,500)
Others - 4,74.283
This activity is not considered as manufacturing activity under industries(Development and Regulation)Act, 1951.
Licensed Capacity : 11,880,000 Cases 9,967,200 Cases
Installed Capacity : 11,880,000 Cases 9,967,200 Cases
Licensed Capacity : 12,726,000 Cases 12,726,000 Cases
Installed Capacity : 12,726,000 Cases 12,726,000 Cases
7. DIRECTORS’REMUNERATION: 2009-10 2008-09(Rs.) (Rs.)
Managing Director’s Remuneration
i Salary,Allowance and Bonus 2,797,500 2,437,500
ii Bonus 559,500 538,534
iii Contribution to Provident Fund, SuperAnnuation, and Gratuity 899,700 652,500
iv Leave Encashment – 460,000
v Other Perquisites(Rent, LTA, Medical, Insurance, Club Subscription etc) 937,950 409,363
Other Director’s Sitting Fees 40,000 35,000
Note : 1. Company contributes to LIC towards Gratuity, Super Annuation, and Leave Encashment of employeesincluding Managing Director.
IMFL Cases –
Cases –
Litres –
IMFL Cases
BEER Cases
DRAUGHT BEER Litres
LEASE RENTAL
[B] REVENUE
2009-10 2008-09
Actual Production Unit Quantity Value (Rs.) Quantity Value (Rs.)
[I] Turnover (Net)
9,442,929 – 9,604,027
BEER 8,946,410 – 7,944,267
DRAUGHT BEER 218,690 – 231,080
9,431,118 # 4,769,570,273 9,548,874 4,946,757,303
8,968,210 1,998,460,461 7,995,624 1,784,301,639
218,690 1,451,227 231,080 1,533,447
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
85
Raw Material - IMFL
i) Rectified Spirit Bulk Litres 37,801,286 1,362,429,699 3,8471,466 1,294,494,447
ii) Malt Spirit Bulk Litres 110,730.120 16,480,085 260,908.039 45,285,481
iii) Grape Spirit Bulk Litres 256,998.630 65,215,922 255,430.541 67,435,292
iv) Others 58,978,565 95,693,800
Raw Material - BEER
i) Malted Barley M.Ton 9,593.451 227,969,878 8,425.768 219,079,435
ii) Broken Rice / (Maize Flakes) KGS 4,661,180 57,241,197 3,748,335 44,161,156
iii) Others 120,118,794 89,958,256
Packing Material
IMFL 1,615,137,888 1,830,086,711
BEER 648,147,531 551,905,933
Imported [In %] 0.023% 959,774
Indigenous [In %] 99.977% 4,170,759,785 100% 4,238,100,511
[II] Stock of finished goods
Opening Stock
IMFL Cases 59,927 22,457,931* 4,774 1,743,023*
BEER Cases 49,863 6,919,813* 101,220 12,215,770*
Closing Stock
IMFL Cases 71,738 27,408,519** 59,927 22,457,931**
BEER Cases 28,063 3,955,558** 49,863 6,919,813**
[III] Consumption
Total 4,171,719,559 4,238,100,511
Percentage of TotalConsumption Materials
BEER:, ,
, ,* Excluding excise duty of Rs.1 695,841 (Rs.3 442,492)** Excluding excise duty of Rs. 954 423(Rs.1 695,841)
IMFL:, ,, ,
* Excluding excise duty of Rs.41 994,560 (Rs.3 396,103)** Excluding excise duty of Rs.52 592,699 (Rs.41 994,560)# Includes 160 cases of obsolete stock written off.
11. EXPENDITURE IN FOREIGN EXCHANGE : 2009-10 2008-09(Rs.) (Rs.)
Total -- 231,600,000
12. CIF VALUE OF IMPORTS : 2009-10 2008-09(Rs.) (Rs.)
Total 17,261,152 21,886,842
Principal to Financial Institutions – 231,600,000
The repayment of principal and interest of Rs.Nil(23,16,00,000)/- on foreign Currency loans have been paidin Indian currency on the principal translated in to the Indian currency at the rates prevailing on the date ofcrystalisation.
Purchase of spares & Consumables 8,854,423 5,263,835
Purchase of Plant and Machinery 7,446,955 1,204,400
Purchase of Generator -- 15,418,607
Purchase of Empty bottles 959,774 --
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
86
13. CHANGE INACCOUNTING POLICY:
During the year, due to the introduction of SAP in Distillery division, the inventories of Raw Material, PackingMaterial and Stores & Spares have been valued at Weighted Average Method as against FIFO basis followed bythe Company. In view of the magnitude of the transactions, the impact of such change in the policy of the inventoryvaluation on the Profit or Loss for the year could not be quantified. In view of the fact that the prices of the RawMaterial, Packing Material and Stores & Spares remained stable throughout the year, the impact of the change inthe valuation method will not be material.
14. SEGMENT REPORTING :
The company has identified three reportable primary business segments viz. Brewery, Distillery and Leasingsegments. Segments have been identified and reported taking into account nature of products and services, thediffering risks and returns and the internal business reporting systems. The company caters to the needs of thedomestic market and as such there are no reportable geographical segments. The accounting policies adoptedfor segment reporting are in line with the accounting policies of the company. During the year, the leasingbusiness segment has been wound up.
Sales
Distillery 4,946,757,303
Brewery 1,785,835,086
Leasing – --
Total segment revenue for the period
Distillery 139,555,142 183,451,798
Brewery (25,073,598)
Leasing -- (2,160,651)
Distillery
- Waiver of Principal and Interest 22,498,473
- Provision for doubtful advances (12,000,000)
- Settlement of Corporate Guarantee (21,200,000)
Leasing
-Amount received against written off 79,411,532
- Relinguishment of rights of assets 162,702,899
- Lease income from RSEB 16,727,013
- Interest income from RSEB 48,867,695
Unallocated
- Poompuhar Shipping Corporation 17,701,591
(16 525,854) (16 601,706)
(353,145,085)
12,074,850
103,385
(18,193,487)
Provision for Tax:
Current Tax / Earlier year tax 1,352,305
PARTICULARS 31.03.10 (Rs) 31.03.09 (Rs)
[A] Revenue:
6,732,592,389
[B] Result:
Total Segment 208,020,722 156,217,549
Profit/(Loss) before tax 95,164,709
Profit / (Loss) afer tax
4,769,570,273
1,999,911,688
68,465,580
19,610,575
(274,696,320)
8,064,749
6,769,481,961
(55,526,128)
(55,526,128) 93,812,404
Profit / (Loss) Before Interest , Exceptional Items andprior period adjustments
Exceptional Items
Unallocated Expenditure
Others , ,
Interest
Interest Income / Dividend Income
Prior period adjustments
Provision for fringe benefit tax
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
87
15. RELATED PARTY DISCLOSURES :
LIST OF RELATED PARTIESAND RELATIONSHIPS
S.No. Party
(A) Associates
(B) Key Management Personnel
1. Hiwide Enterprises P Ltd.
2. Diadem Enterprises P Ltd.
1. R.Raghuram
2. S. Nagarajan
Distillery 2,485,266,910 2,539,046,003
Brewery 1,105,708,869 791,425,550
Leasing -- --
Unallocated Liabilities 680,000,000 1,343,178,816
Distillery 38,432,613 101,756,186
Brewery 514,538,233 29,253,566
Leasing -- --
Distillery 23,224,446 19,519,284
Brewery 73,180,507 61,842,547
Leasing – 2,160,651
PARTICULARS 31.03.10 (Rs) 31.03.09 (Rs)
[D] Segment Liabilities
Total Liabilities 4,270,975,779 4,673,650,369
[E] Other Information
[C] SegmentAssets:
TotalAssets 42,70,975,779 4,673,650,369
Distillery 1,390,111,053 1,085,160,232
Brewery 1,715,552,712 1,593,318,412
Leasing -- --
Shareholders Funds [ Net of Losses] 1,142,008,407 1,947,452,879
UnallocatedAssets 23,303,607 47,718,846
Capital Expenditure
Depreciation
Non cash expenditure excluding depreciation
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
88
2009-10 2008-09Particulars Associates Key Management Associates Key Management
Personnel PersonnelRs. Rs. Rs. Rs.
Remuneration - M.D. 5,194,650 4,497,897
Remuneration - CFO 4,168,200 4,138,115
Purchases 67 651,462
Interest Paid 3 932,055
Payable:
Diadem Enterprises Pvt Ltd 16,893,790 18,676,550
Hiwide Enterprises Pvt Ltd 335,000,000
, 63,296,125
, – –
Outstanding as at year end
16. RELATED PARTY TRANSACTIONS :
17. EARNINGS PER SHARE (EPS) :
2009-10 2008-09Rs. Rs.
Total (55,526,128)
18. DEFERRED TAX :
19. SCHEME OFARRANGEMENT :
In respect of equity shares :
Profit (Loss) after Tax attributable to ordinary
Less: Preference Dividend and Dividend Tax
In view of the net deferred tax being an asset, the same has not been recognised in the books, as there is no virtualcertainty of set off
The Board of Directors of the Company in their meeting held on 29th November 2008 had decided to merge theCompany into United Spirits Ltd (USL) and approved the scheme of arrangement subject to the approval of BIFRand other agencies.
Two Equity shares of USL for every 55 equity shares of BDL.
Shareholders (55,526,128) 93,812,404
-- 53,259,096
The scheme of arrangement interalia provides for transfer of Brewery Division Undertaking of Balaji DistilleriesLimited to Chennai Breweries Private Limited and thereafter merger of Balaji Distilleries Limited (consisting ofDistillery Division Undertaking and investments in subsidiaries) into United Spirits Limited on a going concernbasis. The swap has been fixed as under:
One.12.5% Redeemable Preference Shares of Rs.10/- each of USLredeemable in March 2014, for every two 12.5% Cumulative RedeemablePreference Shares of Rs.10/- each held in BDL (These preference shareshave been redeemed during the year)
One 12.5% Redeemable Preference Shares of Rs.10/- each of USL,redeemable in March 2014 for every two 6% Optionally ConvertibleCumulative Redeemable Preference Shares of Rs.10/- each held in BDL(These preference shares have been redeemed during the year)
40,516,308
WeightedAverage of Equity Shares of Rs.10 each 124,524,409 53,017,560
Basic EPS (0.45) 0.76
WeightedAverage of Equity Shares (including Dilutive) 124,524,409 56,393,070
Diluted EPS (0.45) 0.72
In respect of Preference shares :
In respect of OCCRPS :
89
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
20 BOARD FOR INDUSTRIALAND FINANCIAL RECONSTRUCTION (BIFR) :
21. GOING CONCERN :
22. BREAK-UP OF CAPITAL WORK IN PROGRESS :
2009-10 2008-09(Rs. in lacs) (Rs. in lacs)
Description 2009-10 2008-09(Rs.) (Rs.)
The Hon’ble Board for Industrial and Financial Reconstruction (BIFR) has declared the company as sickindustrial undertaking in terms of section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985at its hearing held on 20th December, 2006 and appointed M/s. IDBI Bank Ltd as the operatingAgency (OA). TheOA has submitted the revised Draft Rehabilitation Scheme (DRS) on 5th February, 2009 after taking into accountthe Scheme of Arrangement approved by the Board of Directors, which interalia envisages transfer of brewerydivision of Balaji Distilleries Limited to Chennai Breweries P Ltd, a wholly owned subsidiary of Balaji DistilleriesLimited and thereafter merger of distillery division of Balaji Distilleries Limited with United Spirits Limited (USL).The shareholders of USL have also approved the Scheme of Arrangement at their meeting held on 21st April,2010.
The Hon’ble BIFR has circulated the DRS vide its order dt 19th February, 2010. Mandatory hearings have beenheld on 10th May, 2010, 26th May,2010 and 4th June,2010 and no creditor has raised any objection for the DRS.In the meeting held on 4th June, 2010, the Hon’ble BIFR has reserved its order and directed that the order will bepronounced on 24th June,2010 in the Open court. The pronouncement of order was postponed to 30th June,2010. On 30th June,2010, the Hon’ble BIFR has pronounced the order and copy of the order is yet to be receivedby the company.After reviewing the order, the Company will take necessary steps for future course of action.
Though the Company has been declared as a Sick Industrial Undertaking, referred to BIFR and has negativenetworth, in view of settlement of most of its term liabilities successfully through One Time Settlement (OTS) andafter considering successful operation and Company’s business plans, the company’s accounts are prepared asa going concern.
Building 427,385 47,794,589
Plant & Machinery 1,000,000 287,069,020
Water Supply Installations -- 6,490,828
Electrical Installations & Fittings -- 34,316,001
The company does not have any foreign currency exposure at the end of the year. The company has not enteredinto any derivative transactions during the year nor is any such transaction outstanding at the year end.
a) Interest on Sales Tax for the year 2001-02 356.60 356.60
b) Undisputed sales tax relating to F.Y 2003-04
Sales tax of January, 2004 payable in February, 2004 1,600.00 1,600.00
Sales tax of February, 2004 payable in March, 2004 2,948.91 2,948.91
Interest thereon upto 31.3.2010 6,710.13 5,611.23
c) Interest on VAT March, 2007 upto 31.3.2009 875.23 875.23
d) Current ValueAdded Tax relating to March, 2010 remitted inApril, 2010 7,366.09 6,741.21
Interest on Sales Tax / VAT 124,094,506 148,179,061
Management fee paid to a bank 500,000 --
Particulars 31.03.10 31.03.09(Rs.) (Rs.)
Total 1,427,385 375,670,438
23.
24. SUNDRY CREDITORS OTHERS INCLUDE :
25. OTHER FINANCE CHARGES INCLUDES :
90
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
26. EMPLOYEE BENEFITS :
Particulars 2009-10 2008-09(Rs.) (Rs.)
II Defined Benefit Plans
(A) Gratuity
Particulars 2009-2010 2008-2009
Net Liability / (Asset) (553,488)
Net Liability / (Asset) recognized in the Balance Sheet (553,488) 1,003,732
Particulars
Total 2,485,864 11,085,684
I Defined Contribution Plans
1,003,732
2009-2010 2008-2009
a. Provident Fund
b. Superannuation Fund
c. State Defined Contribution Plans
i) Employer’s contribution to Employee’s State Insurance
ii) Employer’s Contribution to Employee’s Pension scheme 1995
During the year, the Company has recognised the following amounts in the Profit and loss account:
Employers contribution to provident fund and employees pension scheme 6,496,899 5,799,915
Employers contribution to superannuation fund 3,155,400 2,453,292
Employers contribution to Employee State Insurance 1,848,612 2,286,962
The company has defined benefit plans namely Superannuation, Leave encashment / Compensated absence foremployees and Gratuity for employees. With effect from 2007-08, the liability for these benefit plans isdetermined using Projected Unit Credit Method and accrued as provided in Accounting Standard 15 (R). All theadditional liability has been debited / credited to the profit & loss account of the year.
(a) Description of the Gratuity Plan: The Company provides for gratuity a defined benefit retirement plan coveringeligible employees. Gratuity plan provides for a lump sum payment to employees on retirement, death,incapacitation, termination of employment, of amounts that are based on salaries and tenure of the employees.
The contribution to LIC is made by the Company based on actuarial valuation done by a professional Actuary.
(b) Amount recognized in the Balance Sheet and movements in net liability
Present Value of Funded Obligations 29,773,163 25,552,688
Fair Value of PlanAssets 30,326,651 24,548,956
Present Value of Unfunded Obligations (553,488) 1,003,732
Unrecognized Past service Cost -- -
Liabilities -- 1,115,889
Asset (553,488) (112,157)
Net Liability / (Asset) (553,488) 1,003,732
(c) The fair value of the plan assets does not include the Company’s own financial instruments.
(d) Expenses recognized in the Statement of Profit and LossAccount
Current Service Cost 1,715,298 1,112,768
Interest on Defined Benefit Obligation 2,044,216 1,135,387
Expected Return on PlanAssets (2,335,888) 1,521,733
NetActuarial Losses/ (Gains) Recognized in the year 1,062,238 9,243,373
Past Service Cost -- --
Losses/ (Gains) on “Curtailments & Settlements” -- --
Effect of the limit in Para 59(b) -- --
Net gratuity expenses included in payments to and provision for employees 2,485,864 9,969,795
Add : Unpaid Gratuity provided in Profit and LossAccount -- 1,115,889
Amounts in the Balance Sheet
91
(e) TheActual Return on PlanAssets is Rs.23,35,888 (Rs.1,571,958)
(f) ActuarialAssumptions at the Valuation date
Discount Rate 8% 8%
Expected Rate of Return on PlanAssets* 8% 8%
Salary Escalation Rate
% (Brewery) 6
* This is based on expectation of the average long term rate of return expected on investments of the Fund duringthe estimated term of the obligations.
(g) Descriptions of the PlanAssets
Government of India Securities
Corporate Bonds
Special Deposit Scheme
Insurer Managed Funds 100% 100%
Others
Total 100% 100%
(a) Amount recognized in the Balance Sheet and movements in net liability:
Present Value of Funded Obligations 8,399,219 5,804,812
Fair Value of PlanAssets 11,022,144 9,329,232
Present Value of Unfunded Obligations (2,622,925) (3,524,420)
Unrecognized Past service Cost -- --
Amount not Recognized asAsset, because of limit in Para 59(b) -- --
Liabilities 14,833 526,473
Assets (2,637,808) (4,050,893)
Net Liability/(Asset) (2,622,925) (3,524,420)
Unpaid Gratuity for transferred employees -- --
(b) The fair value of the plan assets does not include the Company’s own financial instruments; no property of theGratuity Trust is occupied by the Company.
(c) Expenses recognized in the Statement of Profit and LossAccount
Particulars 2009-2010 2008-2009
Particulars 2009-2010 2008 - 2009
Total 1,870,745 5,212,423
5% (Distillery) 5% (Distillery)
6 % (Brewery)
Current Service Cost 3,572,173 531,465
Interest on Defined Benefit Obligation 464,385 50,653
Expected Return on PlanAssets (903,829) 39,830
NetActuarial Losses/ (Gains) Recognized in the year (1,261,984) 4,143,662
Past Service Cost -- --
Losses/ (Gains) on “Curtailments & Settlements” -- --
Effect of the limit in Para 59(b) – --
Net leave encashment expenses included in payments to andprovision for employees 1,870,745 4,685,950
Add : Unpaid Leave encashment provided in Profit and LossAccount -- 526,473
Category ofAssets As at 31.03.2010 As at 31.03.2009
(B) Leave Encashment
Particulars 2009-2010 2008 - 2009
Net Liability/(Asset) (2,622,925) (3,524,420)
Net liability/(asset) recognized in the Balance Sheet (2,622,925) (3,524,420)
Amounts in the Balance Sheet
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
92
(d) TheActual Return on PlanAssets is Rs. 9,03,829 (Rs.4,87,124)
(e) ActuarialAssumptions at the Valuation date
Discount Rate 8% 8%
Expected Rate of Return on PlanAssets* 8% 8%
Salary Escalation Rate 5% (Distillery) 5% (Distillery)
6% (Brewery) 6% (Brewery)
* This is based on expectation of the average long term rate of return expected on investments of the Fund duringthe estimated term of the obligations.
(f) Descriptions of the PlanAssets
Government of India Securities
Corporate Bonds
Special Deposit Scheme
Insurer Managed Funds 100% 100%
Others
Total 100% 100%
The data with respect to experience adjustment and estimated exhausted gratuity and leave encashment liabilityfor next year has not been provided byActuary.
The company has subscribed for 100% of share capital of BDL Distillery Pvt Ltd and Chennai Breweries Pvt Ltd.There is no diminution other than temporary in the value of these investments.
The company has not received any information from the suppliers as regards their status under the Micro, Smalland Medium Enterprises Development Act, 2006 and hence disclosure requirements in this regard as perSchedule –VI of the Companies Act, 1956, could not be provided. However, no interest has been accrued / paidduring the year to any of the suppliers.
Previous Year’s figures have been regrouped / reclassified wherever necessary to conform to the current Year’spresentation.
Particulars 2009-2010 2008-2009
Category ofAssets As at 31.03.2010 As at 31.03.2009
27. INVESTMENT IN SUBSIDIARY COMPANIES :
28. MICRO, SMALLAND MEDIUM ENTERPRISES :
29.
SCHEDULE U : CONSOLIDATED NOTES ON ACCOUNTS (Contd..)
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
Place : ChennaiDate : July 31, 2010
G. SRIRAMANCompany Secretary
S. NAGARAJANChief Financial Officer
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
DirectorV. CHANDRASEKHARA REDDY
On behalf of the Board
R. RAGHURAMManaging Director
CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED MARCH 31, 2010
93
For the year ended31.03.2010
Rs.
For the year ended31.03.2009
Rs.
A. CASH FROM OPERATING ACTIVITIES:
Net Profit Before Tax and Extraordinary Items
Adjusted for:
Operating Profit Before Working Capital Changes 214,638,182
Adjusted for:
Cash Generated From Operations 243,045,584 622,544,484
--
Cash Flow Before Extraordinary Items 656,877,725
Net Cash From (Used) Operating Activities
B. CASH FLOW FROM INVESTING ACTIVITIES:
(130,671,503)
Depreciation 83,522,482
Interest and Other Finance Charges 353,14 ,
Interest / Dividend Income (12,074,850)
Foreign Exchange Fluctuation [Net] (389,860)
[Profit] / Loss on sale of Fixed Assets [Net] 2,281,298
[Profit] / Loss on sale of Investments [Net] – (10,384,639)
Wealth Tax Provision 435,775
Provision no longer required (445,000)
Trade Receivables 58, 09,123
Trade Payables 154,801,172 434,150,579
Inventories (84,753,400)
Wealth Tax Paid (95,363)
34,428,604
Prior Period Adjustments – 103,385
Purchase of Fixed Assets (411,139,969)
Sale of Fixed Assets 282,994,67
Sale of Investments – --
Interest Received 61,515,788
Dividend Received – --
Purchase of Investments (Net) ( )
(75,136,703) (201,454,392)
96,404,953
274,696,319 7 368
(8,064,749)
(853)
489,867
380,075
(700,000)
(170,986,602) 5
(28,837,896)
(435,900)
Lease income and Charter Hire
(198,290,827)
400,647 5
8,260,898
(81,850,438) 64,041,997
288,068,909
Cash Flow Before Exceptional Items 242,609,684 622,449,121
242,609,684
242,609,684
(271,479,720)
656,981,110
C. CASH FLOW FROM FINANCING ACTIVITIES:
NET CASH FROM (USED IN) FINANCING ACTIVITIES 51,361,592 (729,568,600)
NET INCREASE/(DECREASE) INCASH AND CASH EQUIVALENTS [A+B+C] 22,491,555 (203,258,992)
CASH AND CASH EQUIVALENTS AS AT 31.03.09
Proceeds From Issue Of Share Capital 1,116,180,000 --
Redemption of Prefence shares (255,209,400) --
Proceeds From Borrowings (Net) (619,811,004) (493,391,733)
Repayment Of Finance Lease Liabilities – –
Dividend Paid – --
Non Trade Advances 700,000 –
Interest Paid (190,498,004) (236,176,866)
174,915,234 378,174,226
CASH AND CASH EQUIVALENTS AS AT 31.03.10
INCREASE / (DECREASE) IN CASH EQUIVALENTS 22,491,553 (203,258,992)
Particulars
Cash and cash equivalents, end of year 197,406,787 174,915,234
3) Components of cash and cash equivalents:
BALANCES WITH SCHEDULED BANKS
197,406,787 174,915,234
197,406,787 174,915,234
Notes:
1) The above cash flow statement has been prepared under the "Indirect Method" as set out in the AccountingStandard - 3 on Cash Flow Statements.
2) The reconciliation to the cash and bank balances as given in the Balance Sheet is as follows:
Cash and bank balances, per Schedule I 392,127,030 287,785,039
Less : Fixed deposits with maturity over 90 days 194,720,243 112,869,805
Cash on Hand 1,392,627 1,107,281
Cheques on Hand 1,664,928 98,007,266
In Current Account 194,349,232 75,800,687
Total
CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED MARCH 31, 2010
For the year ended31.03.2010
Rs.
For the year ended31.03.2009
Rs.
For the year ended31.03.2010
For the year ended31.03.2009
94
ForChartered AccountantsFirm Registration No. 007368S
PartnerMembership No: 23202
P.A. REDDY & CO
P. ASHOK REDDY
Place : ChennaiDate : July 31, 2010
G. SRIRAMANCompany Secretary
S. NAGARAJANChief Financial Officer
ForChartered AccountantsFirm Registration No. 003990S
PartnerMembership No: 25973
PKF SRIDHAR & SANTHANAM
V. KOTHANDARAMAN
DirectorV. CHANDRASEKHARA REDDY
On behalf of the Board
R. RAGHURAMManaging Director
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