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Directors Report of Haldyn Glass Ltd.

Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the Twenty-third Annual Report on the business and operations together with the Audited Statement of Accounts of the Company for the year ended on March 31,2014.

[Rs. Lakhs]

For the year ended march 31 Particulars 2014 2013

Total Income 16,419.23 15,356.34

Earnings before interest, depreciation and tax 3,581.74 4,231.09

Interest and Finance Charges 65.70 167.30

707.30 866.05 Depreciation

Profit before taxation 2,808.74 3,197.74

Provision for Current Tax 900.00 1200.00

66.54 [208.23] Provision for Deferred Tax 1.25 1.13 Wealth Tax

Profit after tax 1,840.95 2,204.84

Surplus brought forward from previous year 5,270.65 4,537.46

Profit available for appropriation

Total 7,111.60 6,742.30

Appropriations:

General Reserve 500.00 1,000.00

Proposed Dividend on Equity Shares 403.14 403.14

Tax on Proposed Dividend 68.51 68.51

Surplus carried forward to next Year 6,139.95 5270.65

Total 7,111.60 6,742.30

Year in retrospect

Your Company has achieved Net Sales of Rs. 16,133.60 lakhs against Rs. 15,254.76 lakhs last year. Earnings before Interest, Depreciation and Tax for the year are at Rs. 3,581.74 lakhs as compared to Rs. 4,231.09 lakhs achieved in 2012-13. The Profit after Tax for the year is Rs. 1,840.95 lakhs vis-a-vis Rs. 2,204.84 lakhs last year.

EPS for 2013-14 is 3.42 as against Rs. 4.10 earned last year

II DIVIDEND

The Board of Directors of your Company is pleased to recommend a dividend of Rs. 0.75 [75%] per Equity Share of Rs. 1 each, for the approval of the shareholders at the ensuing Annual General Meeting. The total payout on account of dividend will be Rs. 471.65 lakhs inclusive of tax thereon of Rs. 68.51 lakhs. The dividend will be tax free in the hands of the shareholders.

iii APPROPRIATIONS

For the year under review, an amount of Rs. 500.00 lakhs is proposed to be transferred to General Reserve and an amount of Rs. 6,139.95 lakhs is proposed to be retained in the Profit and Loss Account.

IV MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to clause 49 [VI] of the Listing Agreement with the BSE Limited, Management Discussion and Analysis Report is given below and a Report on Corporate Governance is annexed to this Report. A declaration in regard to compliance with the Code of Conduct by the Directors and Senior Management Personnel signed by the Managing Director forms part of the Annual Report.

A Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance is also annexed.

MACRO ECONOMY - A PERSPECTIVE

The Indian economy is currently facing several headwinds that have resulted in lower economic growth. The country''s economy expanded at the rate of 4.7% in 2013-14. The economy has been hurt by policy delays, high inflation and general global slowdown. The country has had two consecutive years of below 5% growth and has therefore been the worst performing Asian country for some years. However, the general slowdown in India is mirroring the trends of other emerging economies facing similar macro economic challenges.

On a more positive note, the recent Parliamentary elections have resulted in a clear majority in the lower house for the pre poll alliance for the first time in last 30 years. There is hope this time that a stable and decisive Government can re-engineer India''s growth story going ahead through spearheading structural reforms, reviving the manufacturing sector, improving investor sentiment and manufacturing index thereby improving economic growth.

OVERVIEW :-

New sectors like soft drink, food & beverages, pharmaceuticals and cosmetics industry are opening up as packaging options for the container glass industry. However, the industry still faces several sectoral pressures brought about by the increase in input costs, subdued demand coupled with large capacity creation by some of the existing and new multi-national entrants. The continued practice of recycling used bottles by liquor and beverage industry is a cause for concern to the glass container manufacturers. Moreover, offtake of many large customers has also not shown any significant improvement over the last year.

OUTLOOK :-

To address some of these challenges the Company has embarked on several initiatives that include strategic cost management and investments in upgradation of its equipment. The Company has enhanced its efforts to further strengthen quality standards and improved warehousing capabilities.

The Company has also initiated discussions with technology leaders to help further improve technology and knowhow. Thus, despite some of these issues the Company is hopeful of withstanding all the existing challenges.

CERTIFICATIONS

Your Company is re-accredited for Quality management System ISo 9001: 2008 certification and for environment management System ISo 14001: 2004 certification.

RISKS AND CONCERNS

Gas prices being linked to the US Dollar and therefore the industry faces the risk of forex volatility to that extent. Other than this, the company has limited exposure to foreign exchange risks as it operates mainly in the domestic market. The recent government notification to increase gas prices to $8.4mmbtu too will have it''s own impact on the entire industry, when implemented. Apart from normal business risks, the volatility in global economies can have an impact on developing and emerging economies like India. To counter these risks, continuous process improvement and cost reduction through re-engineering of product / production process have been adopted across all the activities of the organisation. Your Company complies with safety norms and has adequate insurance coverage for all assets.

CORPORATE sOCIAL RESPONSIBILITY (Csr)

Your Company continues to be actively associated with several programmes under CSR. Contributions in the areas of educational assistance to the Centre for Performing Arts, promotional supports and waste water management are a few significant areas of participation including donation to registered trusts - engaged in activities of social benefits.

In addition to the above the Company also co-sponsored supported activities carried out by Gavasad Gram Panchayat.

A CSR Committee has already been constituted under the provisions of Section 135 of the Companies Act, 2013. The CSR Committee will formulate and recommend to the Board a CSR Policy revolving around activities specified in Schedule VII of the said Act, as also recommend the amount of expenditure and monitoring of the same.

SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

Your Company''s business activity falls within a single primary business segment viz. bottles / containers. As such there are no separate reportable segments as per Accounting Standard-17 issued by the Institute of Chartered Accountants of India.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are regularly tested and certified by Statutory Auditors as well as Internal Auditors and cover the Plant, Corporate office and key areas of business. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews the adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations including those relating to strengthening of the Company''s risk management policies and system.

Human Resources and Industrial Relations

Employees being a key factor in achieving targeted performance, your Company encourages its employees to foster an attitude of continuous learning and facilitates by conducting periodical training programmes. Industrial relations continued to remain cordial during the year.

CAUTIONARY STATEMENT

Certain statements in the Directors'' Report describing the Company''s operations, objectives, projections and expectations may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied, depending on the economic conditions, Government policies and other incidental factors and developments.

v PARTICULARS OF EMPLOYEES

The information required under Section 217[2A] of the Companies Act, 1956 read with the Companies [Particulars of Employees] Rules 1975, as amended, is given below:-

Notes:

1. Remuneration includes Salary, House Rent Allowance/Rent free furnished accommodation, Commission, Reimbursement of Medical Expenses, Leave Travel Assistance and other perquisites evaluated as per the Income-tax Rules, 1962, excluding Company''s Contribution to Provident Fund.

2. Appointment is on contractual basis. Other terms and conditions are as per the agreement between the incumbent and the Company.

3. Mr. N. D. Shetty and Mr. T. N. Shetty are related to each other and to Ms. V. R. Ajila and Mr. R. Y Ajila, Directors of the Company.

VI CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the provisions of Section 217[1] [e] of the Companies Act, 1956, read with the Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988, the information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, is furnished in the Annexure forming part of this Report.

vii DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217[2AA] of the Companies Act, 1956, the Directors confirm that:-

[1] In the preparation of the annual accounts, the applicable accounting standards have been followed along with explanatory notes relating to material departures;

[2] Appropriate accounting policies have been selected and applied consistently and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

[3] Proper and sufficient care has been taken for maintaining 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;

[4] The annual accounts have been prepared on a going concern basis.

viii DIRECTORATE

In accordance with the provisions of the Section 152 Companies Act, 2013 and the Company''s Articles of Association, Mrs. V R. Ajila and Mr. Rolf E v.Bueren, retire by rotation and, being eligible, offer themselves for re-election.

Mr. L. Rajagopalan, an Alternate Director to Mr. Rolf E.von Bueren, resigned as an Alternate Director on August 08, 2014 and was appointed as an Additional Director by the Board of Directors in its Meeting held on August 08, 2014. Mr. Rajagopalan''s term of office expires at the forthcoming Annual General Meeting of the Company. It is now proposed to appoint him as an Independent Director of the Company, not liable to retire by rotation under section 149 of the Companies Act, 2013.

Pursuant to section 149 of the Companies Act, 2013 ("the Act") which came in to effect from April 01,2014, every listed public company is required to have at least one-third of the total number of directors as independent Directors who are not liable to retire by rotation.

The Board considers that the continual association of Mr. F. S. Broacha, Mrs. K. J. Udeshi, Mr. Sikandar Talwar and Mr. L. Rajagopalan would be of immense benefit to the Company and it is desirable to continue to avail their services as Independent Directors. Accordingly, in compliance with the provisions of section 149 read with Schedule IV of the Act, the Board recommends the appointment of these Directors as Independent Directors for the approval by the shareholders.

ix AUDITORS

The Auditors of the Company, M/s Mukund M. Chitale & Co. (Firm Registration No. 106655W), Chartered Accountants, will retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if reappointed.

x ACKNOWLEDGEMENTS

Your Directors thank all the shareholders, customers, vendors, banks and the State and Central Governments for the support extended during the year and look forward to their continued support in the future. Your Directors also place on record their appreciation of the contribution made by the Company''s employees at all levels.

For and on behalf of the Board

Place : Mumbai N. D. Shetty

Dated : August 08, 2014 Executive Chairman


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the twenty-second Annual Report on the business and operations together with the Audited Statement of Accounts of the Company for the year ended on March 31, 2013.

The recession in the market, growing competition from within the industry and alternate packaging material, the performance of the Company vis-a-vis the fnancial results of the Company achieved in the year 2012-13 are certainly commendable and speak volumes of the hard work, dedication and commitment of all involved in the management of the Company.

I. FINANCIAL RESULTS

[Rs. Lakhs]

for the year ended march 31 Particulars 2013 2012

total Income 15356.34 17745.54

earnings before interest, depreciation and tax 4231.09 4568.92

Interest and Finance Charges 167.30 363.39

Depreciation 866.05 822.69

Profit before taxation 3197.74 3382.84

Provision for Current Tax 1200.00 1008.50

Provision for Deferred Tax [208.23] [53.42]

Income Tax of Earlier year - 1.22

Wealth Tax 1.13 0.98

Profit after tax 2204.84 2425.56

Surplus brought forward from previous year 4537.46 3580.44

Proft available for appropriation total 6742.30 6006.00

appropriations:

General Reserve 1000.00 1000.00

Proposed Dividend on Equity Shares 403.14 403.14

Tax on Proposed Dividend 68.51 65.40

Surplus carried forward to next Year 5270.65 4537.46

total 6742.30 6006.00



YEAR IN RETROSPECT

Year 2012-13 was a critical year for the industry in general and also for your Company. HGL has achieved Net Sales of Rs. 15254.76 lakhs against Rs. 17451.42 lakhs last year. Despite challenges, the Company has managed to maintain margins and Earnings before Interest, Depreciation and Tax for the year at Rs. 4231.09 lakhs as compared to Rs. 4568.92 lakhs achieved in 2011-12. The Proft after Ta x for the year is Rs. 2204.84 lakhs vis-à-vis Rs. 2425.56 lakhs last year.

EPS for 2012-13 is Rs. 4.10 compared to Rs. 4.51 earned last year

II DIVIDEND

The Board of Directors of your Company is pleased to recommend a dividend of Re. 0.75 [75 %] per Equity Share of Re. 1 each, same as last year, subject to the approval of the shareholders at the ensuing Annual General Meeting. The total payout on account of dividend will be Rs. 471.65 lakhs inclusive of tax thereon of Rs. 68.51 lakhs. The dividend will be tax free in the hands of the shareholders.

III APPROPRIATIONS

For the year under review, an amount of Rs. 1000.00 lakhs is proposed to be transferred to General Reserve and an amount of Rs. 5270.65 lakhs is proposed to be retained in the Proft and Loss Account.

IV MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to clause 49 [VI] of the Listing Agreement with the BSE Limited, Management Discussion and Analysis Report is given below and a Report on Corporate Governance is annexed to this Report. A declaration in regard to compliance with the Code of Conduct by the Directors and Senior Management Personnel signed by the Managing Director forms part of the Annual Report.

A Certifcate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance is also annexed.

Macro Economy - A Perspective

Indian Industry is beset with innumerable challenges and the growth potential is seriously hampered due to the continued economic and political uncertainty prevailing in the country.

The fourth quarter earnings from sectors such as capital goods, infrastructure and PSU Banks have not been as expected. Indeed it has been rather continuing to be disappointing so far. The Telecom and IT sectors are the only sectors that have done reasonably well.

The widening Current Account Defcit and a depreciating dollar continues to be a major worry for the policy makers as it dampens the growth trajectory. Due to lack of political will on the part of the Government and consensus among various parties, the disinvestment plans have not met with any success. Many investments into several sectors are all on hold. In the immediate future, the revival of demand seems to be bleak. However, RBI has built hopes of one more interest rate cut in its policy which is expected to give some momentum to the economy in the near term.

The manufacturing index currently indicates GDP growth hovers around 5% for the fscal year.

Overview

The Global economy though has shown signs of slow improvement; it is still short of expectation. The business environment remains diffcult and a challenging one. The economy has been depressed by fscal consolidation which has squeezed domestic demand and weakened exports. The business confdence index has dropped signifcantly as many of the initiatives and policy changes announced by the Government are still to take off. This has prompted many industries to put investments on hold.

The glass industry, in India, as a whole is currently reeling under tremendous pressure mainly due to subdued demand coupled with enormous capacity creation by some of the existing manufacturers as well as new entrants. Further, the continued practice of recycling used bottles in large volume by the liquor and beverage industry is a cause of concern to the glass container manufacturers which has a depressing effect on demand for new bottles. The off take of many large customers has also not shown any signifcant improvement over the last year.

Though glass is the best mode of packaging, of late Pet, Aluminium Cans and Tetra packs have started becoming acceptable to the users resulting in the glass container manufacturers having to struggle with lower margins due to suboptimal utilisation of capacity.

Outlook

Despite all the odds the glass industry is subject to, your Company is very much hopeful of facing the challenges ahead. Quality Standards have been enhanced during the year and further plans are afoot to still signifcantly enhance them and improve service level to become the most preferred supplier to our customers. The Company has put major thrust on Strategic Cost Management and adequate investment into latest technologies and processes which would help the Company to sustain and grow its business. To further strengthen core competency and gain an edge required to enter niche markets, your Company has initiated dialogue with globally reputed glass manufacturers for collaboration and technology transfer.

Your Company has also undertaken several measures for enhanced value addition. In this regard, our printing and decorating plant has started making signifcant contribution. It has also helped the Company to diversify its product portfolios.

Certifications

Your Company is re-accredited for Quality management System ISo 9001: 2008 certification and for environment management System ISo 14001: 2004 certification.

Risks And Concerns

Your Company operates mainly in the domestic market and has limited exposure to foreign exchange risks. Apart from normal business risks, there exist risks and concerns of volatility in global economies and its likely impact on developing and emerging economies like India. Continuous process improvement and cost reduction through re-engineering of production process to counter these risks have been adopted across all the activities of the organisation. Your Company complies with safety norms and has adequate insurance coverage for all assets.

Corporate Social Responsibility [CSR]

Your Company continues to be actively associated with several programmes under CSR. Contributions in the areas of educational assistance, promotional supports and waste water management are a few signifcant areas of participation including donation of Rs. 17 lakhs towards building fund to ''Dr. Babasaheb Ambedkar Vaidyakiya Pratishthan'', The Pratishthan''s pioneering efforts in health care is towards benefting needy persons. In addition to the above the Company also co-sponsored ''Pune Festival 2012'', to encourage various cultural developmental activities.

Segment-Wise / Product-Wise Performance

Your Company''s business activity falls within a single primary business segment viz. bottles / containers. As such there are no separate reportable segments as per Accounting Standard – 17 [AS -17] issued by the Institute of Chartered Accountants of India.

Internal control Systems and their adequacy

The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are regularly tested and certifed by Statutory Auditors as well as Internal Auditors and cover the Plant, Administrative offce and key areas of business. Signifcant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews the adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations including those relating to strengthening of the Company''s risk management policies and system.

Human Resources And Industrial Relations

Employees being a key factor in achieving target performance, your Company encourages its employees to foster an attitude of continuous learning and facilitates by conducting periodical training programmes. Industrial relations continued to remain cordial during the year.

Cautionary Statement

Certain statements in the Directors'' Report describing the Company''s operations, objectives, projections and expectations may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied, depending on the economic conditions, Government policies and other incidental factors and developments.

V PARTICULARS OF EMPLOYEES

The information required under Section 217[2A] of the Companies Act, 1956 read with the Companies [Particulars of Employees] Rules 1975, as amended, is given below:-

Notes:

1. Remuneration includes Salary, House Rent Allowance / Rent free furnished Accommodation, Performance Award and Commission, Reimbursement of Medical Expenses, Leave Travel Assistance, Company''s Contribution to Provident Fund and other perquisites evaluated as per the Income-tax Rules, 1962.

2. Appointment is on contractual basis. Other terms and conditions are as per the agreement between the incumbent and the Company.

3. Mr. N. D. Shetty and Mr. T. N. Shetty are related to each other and also related to Ms. V. R. Ajila and Mr. R. Y. Ajila, Directors of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EAR

In accordance with the provisions of Section 217[1] [e] of the Companies Act, 1956, read with the Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988, the information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, is furnished in the Annexure forming part of this Report.

VII DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217[2AA] of the Companies Act, 1956, the Directors confrm that:- [1] In the preparation of the annual accounts, the applicable accounting standards have been followed along with explanatory notes relating to material departures; [2] Appropriate accounting policies have been selected and applied consistently and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the fnancial year and of the Proft of the Company for that year;

[3] Proper and suffcient care has been taken for maintaining 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;

[4] The annual accounts have been prepared on a going concern basis.

VIII DIRECTORATE

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Mr. Rolf E.v. Bueren and Mrs. V. R. Ajila, retire by rotation and, being eligible, offer themselves for re-election.

Mr. Rohan Y. Ajila had resigned as an Alternate Director to Mrs. V. R. Ajila with effect from May 29, 2013. However, at the Board Meeting held on May 30, 2013, Mr. Rohan Y. Ajila was appointed as an Additional Director of the Company pursuant to Section 260 of the Companies Act, 1956 and he holds offce upto the date of the ensuing Annual General Meeting of the Company. Your Directors, seek your approval, to appoint Mr. Rohan Y. Ajila as a Director at the ensuing Annual General Meeting of the Company. In this connection, a notice in writing has been received from a member under Section 257 of the Act, signifying his intention to propose Mr. Rohan Y. Ajila for the offce of Director.

Ix AUDITORS

The Auditors of the Company, M/s Mukund M. Chitale & Co., Chartered Accountants, will retire at the conclusion of the ensuing Annual General Meeting and have confrmed their eligibility and willingness to accept the offce, if reappointed.

X APPOINTMENT OF COST AUDITOR

The Central Government has approved the appointment of M/s. Rajesh Shah & Associates, Cost Auditor, for conducting cost audit for the year ended March 31, 2013.

The due date for fling the Cost Audit Report with the Ministry of Corporate Affairs for the year ended March 31, 2012 was February 28, 2013 and the Cost Audit Report was fled by the Cost Auditor on December 29, 2012. The due date for fling the Cost Audit Report for the year ended March 31, 2013 is September 30, 2013. The Board has approved M/s. Y. R. Doshi and Associates as Cost Auditors for the year ending March 31, 2014 in place of M/s. Rajesh Shah & Associates and the application for approval is being made to the Central Government for their approval.

XI ACKNOWLEDGEMENTS

Your Directors thank all the Shareholders, Customers, Vendors, Banks and the State and Central Governments for the support extended during the year and look forward to their continued support in the future. Your Directors also place on record their appreciation of the contribution made by the Company''s employees at all levels.



For and on behalf of the Board

Place : mumbai N. D. Shetty

Dated: may 30, 2013 Executive Chairman

 
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