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Directors Report of Hindusthan National Glass & Industries Ltd.

Mar 31, 2018

Board’s Report

Dear Members,

We hereby present the Annual Report together with the Audited Accounts of our business and operations for the financial year ended 31st March, 2018.

FINANCIAL HIGHLIGHTS (Rs, in Lakhs)

Particulars

For the year ended 31st March, 2018

For the year ended 31st March, 2017

Gross sales (including excise duty)

195,512

205,330

Profit before interest, depreciation and tax

11,827

19,116

Interest and finance charges

25,185

23,800

Profit/Loss before depreciation and tax

(13,358)

(4,684)

Depreciation

16,093

17,487

Exceptional Profit

-

9,459

Profit/Loss before tax & after exceptional profit

(29,451)

(12,712)

Profit/Loss for the year (Before Other Comprehensive Income)

(29,451)

(12,712)

Balance brought forward from previous year

(47,603)

(34,890)

Amount available for appropriation

(77,054)

(47,603)

Balance carried forward to the next year

(77,054)

(47,603)

RESULTS OF OPERATIONS AND THE STATE OF COMPANY''S AFFAIRS

During the financial year, at standalone level your Company reported total income of Rs, 1,98,935 Lakhs in 2017-18 compared to Rs, 2,07,128 Lakhs in 2016-17. Your Company recorded an EBITDA of Rs, 11,827 Lakhs and a net loss of Rs, 29,451 Lakhs during the year under review. During the year direct export turnover was Rs, 11,065 Lakhs compared to Rs, 12,006 Lakhs during the preceeding year.

The financial position of the Company continues to be under severe stress. The situation further deteriorates due to increase in Power & Fuel and Raw Material costs. Due to paucity of funds your company could not be able to do any maintenance capex and also fails to meet its debt obligation. Your company is in discussion with the Lenders and is working on various resolution plan and hope to find out a solution acceptable to all stakeholders.

DIVIDEND & RESERVE

Your Directors do not recommend any dividend for the year ended 2017-18. Further, during the year under review no amount was transferred to General Reserve.

ISSUE OF SHARES

During the year under review, the Company pursuant to Special Resolution approved by the Shareholders at the Annual General Meeting held on 18th September, 2017 had issued 22,15,000 Equity Shares of Rs, 2 each at an issue price of Rs, 207 per equity share aggregating to Rs, 45,85,05,000 to persons falling under promoter group on preferential allotment basis.

Pursuant to the Regulation 78 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 Equity Shares allotted to Promoters will be locked in for a period of three years.

SUBSIDIARY COMPANY

As on 31st March, 2018, your Company does not have any subsidiary company.

The Company has joint venture agreement with Trakya Cam Sanayi II AS in HNG Float Glass Limited.

In accordance with Section 136 of the Companies Act 2013, the audited financial statements, including the consolidated audited financial statements and the related information of the Company are available on the website of the company i.e. www.hngil.com. These documents are also available for inspection during business hours by the shareholders of the Company at the Registered Office.

TRUST SHARES

Pursuant to the amalgamation of Ace Glass Containers Limited with the Company, 21,41,448* shares and 13,68,872* shares having face value of Rs, 10 each (corresponding to 1,07,07,240 shares and 68,44,360 shares having face value of Rs, 2 each) were issued to HNG Trust and Ace Trust respectively. During the year under review, the company failed to repay Principal and Interest amount due to L & T Finance Ltd and subsequently 37,94,360 shares of Ace Trust and 1,55,640 shares of HNG Trust shares respectively pledged in favour of L & T Finance Ltd were invoked by them. At present HNG Trust & Ace Trust are holding 76,41,600 & 30,50,000 shares respectively. In terms of an undertaking given to the BSE Limited, the Company is required to make disclosures pertaining to utilisation of proceeds of shares allotted to the said Trusts until they are extinguished. Entire Shareholding of Ace Trust and 75,06,850 Shares of HNG Trust has been pledged in compliance of Corrective Action Plan (CAP) approved by the Joint Lender Forum.

*The Company''s shares were sub-divided from Rs, 10 per share to Rs, 2 per share w.e.f. 13th November, 2009.

DIRECTORS & KEY MANAGERIAL PERSONNEL

Pursuant to the sad demise of Shri Chandra Kumar Somany, the Board of Directors of the Company in its meeting held on 12th August, 2017 appointed Shri Sanjay Somany as the Chairman of the Board of Directors.

During the year under review Shri Sanjay Somany was re-appointed as the Chairman & Managing Director of the Board of Directors of the Company and Shri Mukul Somany was re-appointed as the Vice Chairman & Managing Director of the Company on a honarary basis for a period of 3 years w.e.f. 1st April, 2018.

In accordance with the provisions of Section 152 of the Companies Act, 2013, Shri Sanjay Somany (DIN: 00124538), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, have offered himself for re-appointment. Your Director recommends his re-appointment.

Shri Narayanaswami Sitaraman, an Independent Director left for heavenly abode on 24th April, 2018.The Board places on record its sincere appreciation for the guidance and valuable services rendered by him during his association with the Company.

Shri Ratna Kumar Daga (DIN: 0 0 2 27746), Shri Dipankar Chatterji (DIN: 00031256), & Smt. Rita Bhimani (DIN: 07106069) are the Independent Directors of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under Section 149(6) of the Companies Act 2013. Role, responsibilities and duties of Independent Director, are being uploaded in the Company''s website at the link http://www.hngil.com/report/TermsofAppointmentofIndependent Director.pdf.

Pursuant to the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration the various aspects of the Board''s functioning, composition of the Board, its Committees, culture, execution and performance of specific duties, obligations and governance. The Company has devised a Policy for performance evaluation of Independent Directors and Board which include criteria for performance evaluation of the non-executive directors and executive directors.

The performance evaluation of the Independent Directors, Chairman and the Non Independent Directors was carried out. The Board of Directors expressed their satisfaction with the evaluation process.

The following policies of the Company are attached herewith and marked as "Annexure I” :

A. Nomination & Remuneration Policy

B. Board Evaluation Policy.

The details of Key Managerial Personnel of the Company are as follows:-

Sl No.

Name of Key Managerial Personnel

Designation

1

Shri Sanjay Somany

Chairman & Managing Director

2

Shri Mukul Somany

Vice Chairman & Managing Director

3

Shri Bimal Kumar Garodia

Chief Financial Officer

4

Shri Ajay Kumar Rai

Company Secretary

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Directors hereby confirm that -

a) In the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the loss of the Company for the year ended on that date.

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the annual accounts on a ''going concern basis''.

e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to Rule 3 of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Ministry of Corporate Affairs website.

Equity shares in respect of which the dividend for the year 2008-2009 and 2009-2010 remained unclaimed for seven consecutive years has been transferred to the IEPF Authority in compliance with Section 124 of the Companies Act, 2013 read with rule 6 of the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2017 after giving individual notices to concerned Shareholders and advertisements in newspapers.

CORPORATE GOVERNANCE

The Company has been practicing the principles of good corporate governance with a view to achieve transparent, accountable and fair management. The report on Corporate Governance along with the Certificate of the Auditors M/s M. Rathi & Co., confirming the compliance of Corporate Governance as stipulated in Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations & Disclosures Requirement) Regulations, 2015 forms an integral part of the Annual Report.

Our Corporate governance report for the financial year 2018 forms part of this Annual Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The contracts/arrangements/transactions entered by the Company during the financial year with the related parties were in the ordinary course of business and on an arm''s length basis. All the related party transactions are with the approval of the Audit Committee and are periodically placed before the Board for review. During the year under review the Company has not entered into any contract/arrangement/transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.hngil.com/report/policyonrelatedpartytransactions.pdf.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee has been formulated and comprises of Shri Sanjay Somany, Shri Mukul Somany and Smt. Rita Bhimani as members. Since, the Company has suffered losses in the previous financial years as well as in the current financial year no expenditure was incurred on CSR activities.

The CSR Policy may be accessed on the Company''s website at the link http://www.hngil.com/report/corporatesocialresponsibility policy.pdf.

DEBT MANAGEMENT

During the year under review, due to liquidity crunch your Company has failed to comply with all the terms and conditions stipulated in the Corrective Action Plan (CAP) and could not be able to meet the debt obligation. The Company has been categorized as Non Performing Asset (NPA) w.e.f. 31st March, 2018.

The Company is in discussion with the lenders and your Directors are confident that a Resolution Plan will be derived which will be acceptable by all the stakeholders.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management''s Discussion and Analysis under Schedule V read along with the Regulation 34(3) of the SEBI (Listing Obligations & Disclosures Requirement) Regulations is presented in a separate section forming part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared in accordance with the provisions of the Companies Act, 2013 and with Indian Accounting Standard 110 read with Indian Accounting Standard 28 notified by the Ministry of Corporate Affairs and forms part of this Annual Report.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the Financial Statements of Subsidiaries/ Associate Companies/Joint Ventures is given in Form AOC-1.

RISK MANAGEMENT

Risk management is embedded in your Company''s operating framework. The Company manages and monitors various risks and uncertainties that can have some adverse impact on the Company''s business. Your company believes that managing risks helps in maximizing returns. Your Company is giving major thrust in developing and strengthening its internal audit so that risk threat can be mitigated. The Company''s approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks.

The Company has a formal Risk Management Policy. The Board of Directors from time to time review the same.

INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY

Your Company has a comprehensive and effective internal control and risk-mitigation system, including internal financial control, for all the major processes to ensure reliability of financial reporting, timely feedback on operational and strategic goals, compliance with policies, procedures, law and regulations, safeguarding of assets and economical and efficient use of resources. The Company''s internal control system is commensurate with its size, scale and complexities of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors of the Company actively reviews the adequacy and effectiveness of the Internal Control Systems and suggests improvements to them. The Company has a robust Management Information System (MIS), which is an integral part of the control mechanism.

AUDITORS AND AUDITORS'' REPORT

Statutory Auditors

The Shareholders of the Company at the Annual General Meeting (AGM) held on 18th September, 2017, appointed M/s Doshi Chatterjee Bagri & Co LLP, Chartered Accountants (Firm Registration Number 325197E/E300020), as Statutory Auditor of the Company from the conclusion of 71st AGM till the conclusion of 76th AGM of the Company subject to ratification by members at every AGM.

Pursuant to the amendment in the Companies Act, 2017 and notification dated 7th May,2018 by the Ministry of Corporate Affairs (MCA), ratification of the Statutory Auditor is no longer required to be passed by shareholders at the ensuing AGM and therefore approval of the shareholders for the same is not sought.

Pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 M/s. Jitendra K. Agarwal & Associates, Chartered Accountants (Firm Registration No.318086E), is appointed as the Joint Statutory Auditor of the Company, to hold office from the conclusion of this 72nd Annual General Meeting until the conclusion of the 77th Annual General Meeting along with the existing Statutory Auditors M/s. Doshi Chatterjee Bagri & Co LLP, Chartered Accountants. The Statutory Auditors have not reported any incidence of fraud to the Audit Committee of the Company during the year under review. Auditors Report

The para-wise management response to the qualifications / observations made in the Independent Auditors Report is stated as under:

a) Attention is drawn to para 9 a of the Independent Auditors Report regarding Basis for Qualified Opinion. The clarification of the same is provided in Note No. 2.38.1 of the Accounts of the Standalone Accounts.

b) Attention is drawn to para 9 b of the Independent Auditors Report regarding Basis for Qualified Opinion. The clarification of the same is provided in Note No. 2.43 of the Accounts of the Standalone Accounts.

c) Attention is drawn to para 9 c of the Independent Auditors Report regarding Basis for Qualified Opinion. The clarification of the same is provided in Note No. 2.40 of the Accounts of the Standalone Accounts.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made there under, the Company has appointed Shri Babu Lal Patni, Practising Company Secretary to conduct the Secretarial Audit for the financial year 2017-18. The Secretarial Audit for the financial year ended 31st March, 2018 does not contain any qualification, reservation or adverse remark and is annexed herewith and marked as "Annexure II” to this report.

DISCLOSURES Audit Committee

The Audit Committee comprises of two Independent Directors namely Shri Ratna Kumar Daga (Chairman), Shri Dipankar Chatterji and Shri Mukul Somany, Non-Independent Director as members. All the recommendations made by the Audit Committee were accepted by the Board during the financial year 2017-18.

Presently, the composition of the Audit Committee is as follows:

Sl. No

Name

Designation

1

Shri Ratna Kumar Daga

Chairman

2

Shri Dipankar Chatterji

Member

3

Shri Narayanaswami Sitaraman (upto 24th April, 2018)

Member

4

Shri Mukul Somany (w.e.f 4th May,2018)

Member

Vigil Mechanism/Whistle Blower Policy

The Company has a Vigil Mechanism, which also incorporates a Whistle Blower Policy for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct. Disclosures can be made by a Whistle Blower through an email to the Chairman of the Audit Committee.

The Policy may be accessed on the Company''s website at the link http://www.hngil.com/report/whistleblowerpolicy.pdf Meetings of the Board

During the year under review 5(five) meetings of the Board of Directors were held. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013. Details of compositions and other information are provided in the Corporate Governance Report.

Extract of Annual Return

Extract of Annual Report in Form MGT-9 is provided separately as "Annexure III” and forms the part of Board''s Report.

Particulars of Loans, Guarantees or Investment made guarantee given and securities provided

Particulars of Loans given, Investments made, Guarantee given and securities provided along with the purpose for which the Loan or Guarantee or Security is proposed to be utilized by the recipient are provided in the Standalone Financial Statements.

Change in nature of business

During the year under review, there has been no change in the nature of business of the Company.

Remuneration from subsidiary

None of the Executive Directors of the Company has received any remuneration or commission from its subsidiary.

Significant or Material order

No significant or material order was passed by the Regulators or Courts or Tribunals, which impact the going concern status and Company''s operations in future.

Material changes and commitments

Due to severe liquidity crunch the Company is not able to meet its debt obligation.

Sexual Harassment

During the year under review no case was reported pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Business Responsibility Reporting

The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015, is not applicable to your company for the financial year ending 31st March, 2018.

ANNUAL LISTING FEES

The Company''s shares continue to be listed at the National Stock Exchange of India Limited, BSE Limited and The Calcutta Stock Exchange Limited.

The annual listing fee for the year 2018-19 has been paid to all these Exchanges.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of Section 197(12) of the Act read with Rule 5(1) (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014, a Statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set-out and other details as required in the said rule are provided as "Annexure IV”

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

The statements containing the required particulars under the Act are provided as "Annexure V” and forms a part of this report.

PERSONNEL AND INDUSTRIAL RELATIONS

Your Company takes pride in the commitment, competence and dedication shown by its employees in all the areas of business. People are the Company''s key assets. The focus in 2017-18 was on enhancing employee engagement and driving performance excellence to achieve the Company''s long term vision. Your Company is consolidating the human resource operations and the internal systems to enhance the operations of the Company. The Company continued to actively drive the Ethics and Compliance agenda via trainings, programmes and employee engagements focusing on non-retaliation and zero tolerance to non-compliance. HR function is a critical pillar to support the organization''s growth and its sustainability in the long run.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their appreciation to the employees at all levels for their contribution to the Company''s performance but for whose hard work, and support, your Company''s achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the Company.

For and on behalf of the Board

Sanjay Somany

Place : Kolkata Chairman & Managing Director

Date : 28th June, 2018 (DIN: 00124538)


Mar 31, 2017

We hereby present the Annual Report together with the Audited Accounts of our business and operations for the financial year ended 31st March, 2017.

FINANCIAL HIGHLIGHTS ('' in Lakhs)

Particulars

For the year ended 31st March, 2017

For the year ended 31st March, 2016

Gross sales (including excise duty)

2,05,330

2,16,207

Profit before interest, depreciation and tax

19,116

27,182

Interest and finance charges

23,800

25,483

Profit/(Loss) before depreciation and tax

(4,684)

1,699

Depreciation

17,487

19,931

Exceptional Profit

9,459

-

Profit/(Loss) before tax & after Exceptional Profit

(12,712)

(18,231)

Profit/(Loss) for the year (Before Other Comprehensive Income)

(12,712)

(18,231)

Balance brought forward from previous year

(34,890)

(16,655)

Amount available for appropriation

(47,603)

(34,890)

Balance carried forward to the next year

(47,603)

(34,890)

Note: The financial statements for the year ended 31st March, 2016 has been restated in accordance with Ind AS and necessary adjustments were made as and where necessary.

RESULTS OF OPERATIONS AND THE STATE OF COMPANY''S AFFAIRS

During the financial year, at standalone level your Company reported a total income of Rs, 2,07,128 Lakhs in 2016-17 (before exceptional income of Rs, 9,459 Lakhs) compared to Rs, 2,18,598 Lakhs in 2015-16, EBITDA of Rs, 19,116 Lakhs (before exceptional income of Rs, 9,459 Lakhs) and a net loss of Rs, 12,712 Lakhs (after considering the effect of exceptional items). During the year direct export turnover was Rs, 12,006 Lakhs compared to Rs, 10,964 Lakhs during the preceeding year.

Lower capacity utilization continues to impact the performance of the Company. Your Directors are pleased to report that consistent efforts and policy to cut down the cost has resulted in reduction in per unit cost and consequently enable the company to achieve better margin.

DIVIDEND & RESERVE

Your Directors do not recommend any dividend for the year ended 2016-17. Further, during the year under review no amount was transferred to General Reserve.

SUBSIDIARY COMPANY

As on 31st March, 2017, your Company does not have any subsidiary company.

The Company has joint venture agreement with Trakya Cam Sanayi II AS in HNG Float Glass Ltd.

In accordance with Section 136 of the Companies Act 2013, the audited financial statements, including the consolidated audited financial statements and the related information of the Company are available on our website i.e. www.hngil.com. These documents are also available for inspection during business hours by the shareholders of the Company at the Registered Office.

INDIAN ACCOUNTING STANDARDS (IND AS)

During the year under review, your Company has adopted Ind AS by replacing the existing Indian GAAP as per notification dated 16th February, 2015 on the Companies (Indian Accounting Standards) Rules, 2015 issued by the Ministry of Corporate Affairs.

The following are the areas which had an impact on account of transition to Ind AS:

1. Business combinations including recording of intangibles and deferred taxes and accounting for common control.

2. Fair valuation of certain financial instruments

The reconciliations and descriptions of the effect of transition from IGAAP to Ind AS have been provided in the notes to accounts in the Standalone and Consolidated financial system.

TRUST SHARES

Pursuant to the amalgamation of Ace Glass Containers Limited with the Company, 21,41,448* shares and 13,68,872* shares having face value of Rs, 10 each (corresponding to 1,07,07,240 shares and 68,44,360 shares having face value of Rs, 2 each) were issued to HNG Trust and Ace Trust respectively. At present HNG Trust & Ace Trust are holding 77,97,240 & 68,44,360 shares respectively. In terms of an undertaking given to the BSE Limited, the Company is required to make disclosures pertaining to utilisation of proceeds of shares allotted to the said Trusts until they are extinguished. Entire Shareholding of Ace Trust and 76,62,490 Shares of HNG Trust has been pledged in favour of SBICAP Trustee Company Limited in compliance of Corrective Action Plan (CAP) approved by the Joint Lender Forum.

*The Company''s shares were sub-divided from Rs, 10 per share to Rs, 2 per share w.e.f. 13th November, 2009.

DIRECTORS & KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013, Shri Mukul Somany (DIN: 00124625), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, have offered himself for re-appointment. The Board recommends his re-appointment.

During the year under review, Shri Rakesh Kumar Sharma (DIN: 02166966), Executive Director and Shri Sujit Bhattacharya (DIN: 00059282), Independent Director has resigned from the Directorship of the Company w.e.f 28th February, 2017 and 31st March, 2017 respectively. The Board places on record its sincere appreciation for the guidance and valuable services rendered by them during their association as Directors of the Company.

Shri Narayanaswami Sitaraman (DIN:01114920) was appointed as an Additional Independent Director of the Company w.e.f 13th April, 2017. Necessary declaration and consent have been received from him under the relevant provisions of the Companies Act, 2013 and requisite notices under Section 160 of the Act have been received from a member proposing his appointment as an Independent Director of the Company.

Shri Ratna Kumar Daga (DIN: 00227746), Shri Dipankar Chatterji (DIN: 00031256), Shri Narayanaswami Sitaraman (DIN: 01114920) & Smt. Rita Bhimani (DIN: 07106069) are the Independent Directors of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under Section 149(6) of the Companies Act 2013. Role, responsibilities and duties of Independent Director, are being uploaded in the Company''s website at the link http://www.hngil.com/report/TermsofAppointmentofIndependent Director.pdf.

Pursuant to the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration the various aspects of the Board''s functioning, composition of the Board, its Committees, culture, execution and performance of specific duties, obligations and governance. The Company has devised a Policy for performance evaluation of Independent Directors and Board which include criteria for performance evaluation of the non-executive directors and executive directors.

The performance evaluation of the Independent Directors, Chairman and the Non-Independent Directors was carried out. The Board of Directors expressed their satisfaction with the evaluation process.

The following policies of the Company are attached herewith and marked as "Annexure I” :

A. Nomination & Remuneration Policy

B. Board Evaluation Policy.

The details of Key Managerial Personnel of the Company are as follows:-

Sl. No.

Name of Key Managerial Personnel

Designation

1

Shr

Sanjay Somany

Vice Chairman & Managing Director

2

Shr

Mukul Somany

Vice Chairman & Managing Director

3

Shr

Rakesh Kumar Sharma (Upto 28th February, 2017)

Executive Director

4

Shr

Bimal Kumar Garodia

Chief Financial Officer

5

Shr

Ajay Kumar Rai

Company Secretary

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Directors hereby confirm that:

a) In the preparation of the annual accounts for the year ended 31st March, 2017, the applicable Accounting Standards had been followed along with proper explanation relating to material departures.

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March, 2017 and of the loss of the Company for the year ended on that date.

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the annual accounts on a ''going concern basis''.

e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE

The Company has been practicing the principles of good corporate governance with a view to achieve transparent, accountable and fair management. The report on Corporate Governance along with the Certificate of the Auditors M/s Lodha & Co., Chartered

Accountants, confirming the compliance of Corporate Governance as stipulated in Regulation 34(3) read with Schedule V of the SEBI

(Listing Obligations & Disclosures Requirement) Regulations, 2015 forms an integral part of the Annual Report.

Our Corporate Governance Report for the financial year 2017 forms part of this Annual Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The contracts/arrangements/transactions entered by the Company during the financial year with the related parties were in the ordinary course of business and on an arm''s length basis. All the related party transactions are with the approval of the Audit Committee and are periodically placed before the Board for review. During the year under review the Company has not entered into any contract/arrangement/transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.hngil.com/report/policyonrelatedpartytransactions.pdf.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee has been formulated and comprises of Shri Sanjay Somany, Shri Mukul Somany and Smt. Rita Bhimani as members. Since, the Company has suffered losses in the previous financial years as well as in the current financial year no expenditure was incurred on CSR activities.

The CSR Policy may be accessed on the Company''s website at the link http://www.hngil.com/report/POLICYONCORPORATESOCIALR ESPONSIBILITY.pdf.

DEBT MANAGEMENT

The repayment of long term loans of the Company is realigned as per the Corrective Action Plan (CAP) formulated by Joint Lender Forum (JLF) as per the RBI Guidelines. During the year under review, your Company has complied with all the repayment schedule and honored all its obligation on time.

MANAGEMENT DISCUSSION AND ANALYSIS

Management''s Discussion and Analysis under Schedule V read along with the Regulation 34(3) of the SEBI (Listing Obligations & Disclosures Requirement) Regulations, is presented in a separate section forming part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared in accordance with the provisions of the Companies Act, 2013 and with Indian Accounting Standard 110 read with Indian Accounting Standard 28 notified by the Ministry of Corporate Affairs and forms part of this Annual Report.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the Financial Statements of Subsidiaries/ Associate Companies/Joint Ventures is given in Form AOC-1.

RISK MANAGEMENT

Risk management is embedded in your Company''s operating framework. The Company manages and monitors various risks and uncertainties that can have some adverse impact on the Company''s business. Your Company believes that managing risks helps in maximizing returns. Your Company is giving major thrust in developing and strengthening its internal audit so that risk threat can be mitigated. The Company''s approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks.

The Company has a formal Risk Management Policy. The Board of Directors from time to time review the same.

INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY

Your Company has a comprehensive and effective internal control and risk—mitigation system, including internal financial control, for all the major processes to ensure reliability of financial reporting, timely feedback on operational and strategic goals, compliance with policies, procedures, law and regulations, safeguarding of assets and economical and efficient use of resources. The Company''s internal control system is commensurate with its size, scale and complexities of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors of the Company actively reviews the adequacy and effectiveness of the Internal Control System and suggests improvements wherever necessary. The Company has a robust Management Information System (MIS), which is an integral part of the control mechanism.

Statutory Auditors

Pursuant to Section 139 of the Companies Act, 2013, M/s Lodha & Co, Chartered Accountants would complete their current term as Statutory Auditors of the Company at the conclusion of the ensuing 71st Annual General Meeting of the Company. Accordingly, the Board of Directors has considered and recommended the appointment of M/s Doshi, Chatterjee, Bagri & Co LLP, Chartered Accountants (Firm Registration Number 325197E/E300020) as Statutory Auditors of the Company for a period of five (5) consecutive years from the conclusion of 71st Annual General Meeting till the conclusion of the 76th Annual General Meeting, of the Company subject to ratification by the shareholders at each Annual General Meeting.

M/s Doshi, Chatterjee, Bagri & Co LLP, Chartered Accountants have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for appointment as auditors of the Company.

Appointment of M/s Singhi & Co, as Branch Auditor is also placed for ratification by shareholders at the ensuing Annual General Meeting.

The Statutory Auditors have not reported any incidence of fraud to the Audit Committee of the Company during the year under review. Auditors Report

The Auditors Report contains the following observations:

As stated in Note of the financial results due to inadequacy of profit managerial remuneration has become in excess of the limits laid down in the Companies Act, 2013 awaiting Central Government approval. Necessary application has been filed with the Central Government for their approval.

The effect of the decision of Supreme Court on entry tax matter is yet to be given by the various State Governments and the amount of said levy is yet to be determined. Accordingly the same has not been recognized by the Company.

Due to reasons given here above, impact thereof on the financial statements is not ascertainable.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made there under, the Company has appointed Shri Babu Lal Patni, Practicing Company Secretary to conduct the Secretarial Audit for the financial year 2016-17. The Secretarial Audit for the financial year ended 31st March, 2017 does not contain any qualification, reservation or adverse remark and is annexed herewith and marked as "Annexure II” to this report.

DISCLOSURES:

Audit Committee

The Audit Committee comprises of all Independent Directors namely Shri Ratna Kumar Daga (Chairman), Shri Dipankar Chatterji and Shri Narayanaswami Sitaraman as members. All the recommendations made by the Audit Committee were accepted by the Board during the financial year 2016-17.

Presently, the composition of the Audit Committee is as follows:

Sl. No

Name

Designation

1

Shri Ratna Kumar Daga

Chairman

2

Shri Dipankar Chatterji

Member

3

Shri Sujit Bhattacharya (upto 31st March, 2017)

Member

4

Shri Narayanaswami Sitaraman (w.e.f. 13th April, 2017)

Member

Vigil Mechanism/Whistle Blower Policy

The Company has a Vigil Mechanism, which also incorporates a Whistle Blower Policy for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of conduct. Disclosures can be made by a Whistle Blower through an email to the Chairman of the Audit Committee.

The Policy may be accessed on the Company''s website at the link http://www.hngil.com/report/whistleblowerpolicy.pdf

Meetings of the Board

During the year under review 4(four) meetings of the Board of Directors were held. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013. Details of compositions and other information are provided in the Corporate Governance Report.

Extract of Annual Return

Extract of Annual Report in Form MGT-9 is provided separately as "Annexure III” and forms the part of Board''s Report.

Particulars of Loans, Guarantees or Investment made, guarantee given and securities provided

Particulars of Loans given, Investments made, Guarantee given and securities provided along with the purpose for which the Loan or Guarantee or Security is proposed to be utilized by the recipient are provided in the Standalone Financial Statements.

Change in nature of business

During the year under review, there has been no change in the nature of business of the Company.

Remuneration from subsidiary

None of the Vice Chairmen and Managing Directors, Executive Director of the Company has received any remuneration or commission from its subsidiary.

Significant or Material order

No significant or material order was passed by the Regulators or Courts or Tribunals, which impact the going concern status and Company''s operations in future.

Material changes and commitments

There have been no material changes and commitments affecting the financial position between the end of the financial year and the date of the report.

Sexual Harassment

During the year under review no case was reported pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Business Responsibility Reporting

The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015, is not applicable to your company for the financial year ending 31st March, 2017.

ANNUAL LISTING FEES

The Company''s shares continue to be listed at the National Stock Exchange of India Limited, BSE Limited and The Calcutta Stock Exchange Limited.

The annual listing fee for the year 2017-18 has been paid to all these Exchanges.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of Section 197(12) of the Act read with Rule 5(1) (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014, a Statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set-out and other details as required in the said rule are provided as "Annexure IV”.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to Rule 3 of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Ministry of Corporate Affairs website.

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

The statements containing the required particulars under the Act are provided as "Annexure V” and forms a part of this report. PERSONNEL AND INDUSTRIAL RELATIONS

Your Company takes pride in the commitment, competence and dedication shown by its employees in all the areas of business.

People are the Company''s key assets. The focus in 2016-17 was on enhancing employee engagement and driving performance excellence to achieve the Company''s long term vision. Your Company is consolidating the human resource operations and the internal systems to enhance the operations of the Company. The Company continued to actively drive the Ethics and Compliance agenda via trainings, programmes and employee engagements focusing on non-retaliation and zero tolerance to non-compliance. HR function is a critical pillar to support the organization''s growth and its sustainability in the long run.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their appreciation to the employees at all levels for their contribution to the Company''s performance but for whose hard work, and support, your Company''s achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the Company.

For and on behalf of the Board

Place : Kolkata Sanjay Somany Mukul Somany

Date : 15th May, 2017 Vice Chairman & Managing Director Vice Chairman & Managing Director

(DIN: 00124538) (DIN: 00124625)


Mar 31, 2015

Dear Members,

We hereby present Annual Report together with the audited accounts of our business and operations for the year ended March 31, 2015.

Financial Highlights (Rs,in Lakhs)

Particulars For the year ended For the year ended March 31, 2015 March 31, 2014

Gross sales (including excise duty) 217,261 196,832

Profit before interest, depreciation and tax 27,675 26,436

Interest and finance charges 25,905 25,652

Profit/(Loss) before depreciation and tax 1,770 784

Depreciation 25,382 24,701

Profit/(Loss) before tax (23,612) (23,917)

Provision for tax 92 (2,099)

Profit/(Loss) for the year (23,704) (21,818)

Balance brought forward from previous year (21,801) -

Adjustment pursuant to Merger 155

Provision for proposed dividend including Dividend Distribution Tax written back – - 17

Forgo of right to receive Dividend by HNG Trust and Ace Trust

Amount available for appropriation (45,350) (21,801)

Balance carried forward to the next year (45,350) (21,801)

Result OF Operations Ands the State OF Company's AFFAIRS

During the financial year, your Company reported total income of Rs 2,06,022 Lakhs in 2014-15 compared to Rs. 1,90,349 Lakhs in 2013-14. Your Company recorded an EBITDA of Rs. 27,675 Lakhs and a net loss of Rs. 23,704 Lakhs during the year under review. During the year, direct export turnover was Rs. 11,020.27 Lakhs compared to Rs. 11,482.68 Lakhs during the preceding year. Lower capacity utilization continues to impact the performance of the Company. During the financial year the Company continues to focus on cost optimization initiatives which helped in containing inflationary impact to some extent. We expect with the revival in economy, the demand for container glass will also recover.

During the current financial year your Company has once again given major thrust on implementation of various cost saving measures and your Directors are confident that the aforesaid initiatives will result in substantial improvement in the performance of the Company, some of the efforts are visible in power & fuel cost.

Dividend & Reserve

Your Directors do not recommend any dividend for the year ended 2014-15. Further, during the year under review no amount was transferred to General Reserve.

Merger of glass equipment (India) Ltd. (geiL) and quality Minerals Ltd. (qML) into the Company

Hon'ble Calcutta High Court has vide its Order dated March 31, 2015 approved the merger of Glass Equipment (India) Ltd. and Quality Minerals Ltd. into the Company.

SUBSIDIARY Companies

As on March 31, 2015, your Company has only one subsidiary namely HNG Global GmbH. During the Financial Year GEIL and QML had merged with the Company and as result they are no longer subsidiaries of the Company.

In spite of tough competition and challenging environment HNG Global GmbH has registered sales of Rs. 25,777.17 Lakhs in the financial year 2014-15 compared to Rs. 29,575.90 Lakhs in the financial year 2013-14. EBITA was Rs. 6,949.86 Lakhs in the Financial year 2014-15 compare to Rs. 5,450.70 Lakhs in the financial year 2013-14.

The Company has joint venture agreement with Trakya Cam Sanayi II AS in HNG Float Glass Ltd.

Shareholders of the Company who are interested in obtaining annual accounts of the subsidiary company and related detailed information may write to the Company Secretary at the Registered Office of the Company. These documents are also available for inspection during business hours by the shareholders of the Company at the Registered Office.

Consolidated Financial Statements of the Company and its subsidiary duly audited for the financial year ended March 31, 2015 forms part of the Annual Report of the Company.

trust SHARES

Pursuant to amalgamation of Ace Glass Containers Limited with the Company, 21,41,448* shares and 13,68,872* shares having face value of Rs.10 each (corresponding to 1,07,07,240 shares and 68,44,360 shares having face value of Rs. 2 each) were issued to HNG Trust and Ace Trust respectively. At present HNG Trust & Ace Trust are holding 77,97,240 & 68,44,360 shares respectively. In terms of an undertaking given to the BSE Limited, the Company is required to make disclosures pertaining to utilization of proceeds of shares allotted to the said Trusts until they are extinguished. Entire Shareholding of ACE Trust and 76,62,490 Shares of HNG Trust has been pledged in favor of L&T Finance Ltd., Axis Bank Ltd., State Bank of India and Syndicate Bank, for the loan availed by the company.

*The Company's shares were sub-divided from Rs. 10 per share to Rs. 2 per share w.e.f. November 13, 2009.

Directors & KEY Managerial Personnel

During the year under review Shri Kishore Bhimani, Independent Director has resigned from the Directorship of the Company w.e.f February 11, 2015. The Board places on record its sincere gratitude for the guidance and support rendered by Shri Bhimani during his long tenure as Director of the Company.

During the year under review members have appointed Shri Ratna Kumar Daga, Shri Dipankar Chatterji and Shri Sujit Bhattacharya as Independent Directors who are not liable to retire by rotation. Te Members have also through postal ballot appointed Shri Sanjay Somany and Shri Mukul Somany as Vice Chairman and Managing Director of the Company for a further period of three years w.e.f April 1, 2015 and Shri Rakesh Kumar Sharma as an Executive Director for a further period of two years w.e.f. March 1, 2015.

Smt. Rita Bhimani founder and CEO of Ritam Communication was appointed as Woman Independent Director of the Company w.e.f March 3, 2015. Necessary declaration has been received from her under the relevant provisions of the Companies Act, 2013 and requisite notices in writing from a member proposing appointment of Smt. Rita Bhimani as Woman Independent Director of the Company has also been received.

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

The following policies of the Company are attached herewith and marked as Annexure IA & IB :

1. Nomination & Remuneration Policy

2. Board Evaluation Policy.

The Details of Key Managerial Personnel of the Company are as follows :



sl. no name of Key Managerial Personnel

1 Shri Sanjay Somany Vice Chairman & Managing Director

2 Shri Mukul Somany Vice Chairman & Managing Director

3 Shri Bimal Kumar Garodia Chief Financial Offcer

4 Shri Ajay Kumar Rai Company Secretary



Directors' Responsibility Statement

The Directors hereby confirm that :

a) In the preparation of the annual accounts for the year ended March 31, 2015 the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same.

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2015 and of the loss of the Company for the year ended on that date.

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the annual accounts on a 'going concern basis'.

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Corporate Governance

The Company has been practicing the principles of good governance with a view to achieve transparent, accountable and fair management. The report on Corporate Governance along with the Certificate of the Auditors, M/s Lodha & Co., Chartered Accountants, confirming the compliance of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report.

Contracts And Arrangements With Related Parties

The contracts/arrangements/transactions entered by the Company during the financial year with the related parties were in the ordinary course of business and on an arm's length basis and those transactions which are not in ordinary course of business, approval of shareholders has been obtained in the previous annual general meeting. During the year the Company had not entered into any contract/arrangement/transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: http://www.hngil.com/report/policyonrelatedpartytransactions.pdf.

Corporate social responsibility (Csr)

The Corporate Social Responsibility Committee has been formulated and comprises of Shri Sanjay Somany, Shri Mukul Somany and Smt. Rita Bhimani. The Committee recommended to the Board a Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company. The aforesaid policy was approved by the Board on November 12, 2014.

The CSR Policy may be accessed on the Company's website at the link http://www.hngil.com/report/corporate social responsibility policy.pdf.

Since, Company has suffered losses in the previous financial years as well as in the current financial year no amount was spent on CSR activities.

Debt Management

During the year under review, debt management exercise was undertaken by your Company. All the lenders except one Bank formed a Joint Lender Forum (JLF) and approved the Corrective Action Plan (CAP) to realign the existing banking facilities.

The Company has approached the Lenders to realign the existing repayment and has received support from all except one banker. The Lenders finalized the CAP to give effect to the same. The support by the Lenders through CAP will enable the Company to focus on its operations and help it to revive quickly.

Management Discussion And Analysis Report

Management's Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming a part of the Annual Report.

Outlook

Indian economy is expected to grow marginally higher at 6.4% during the year 2015 as compared to 5.6% in 2014. The India's economy is on a cyclical upswing and forward-looking indicators suggest domestic demand is gathering momentum.

Low inflation has enabled the Reserve Bank of India to cut interest rates by 50 basis points easing pressure on the private sector. Lower rates as well as the Government's Infrastructure and Disinvestment Programs is expected to provide a boost to domestic- oriented industries.

Tough, the glass industry is facing competition from alternative medium, the use of glass is of critical importance in the present day. With the increase in public awareness towards environment the use of glass is expected to increase in the near future.

Consolidated Financial Statements

Consolidated Financial Statements have been prepared in accordance with the provisions of the Companies Act, 2013 and with Accounting Standard 21 read with Accounting Standard 23 issued by the Institute of Chartered Accountants of India and forms part of this Annual Report.

RISK Management

The Company manages and monitors the various risk and uncertainties that can have some adverse impact on the Company's business. Your Company is giving major thrust in developing and strengthening its internal audit so that risk threat can be mitigated.

The Company has a formal Risk Management Policy. The Board of Directors from time to time review the same.

Internal Financial Controls

The Company has a comprehensive internal control system, including internal financial control, for all the major processes to ensure reliability of financial reporting, timely feedback on operational and strategic goals, compliance with policies, procedures, law and regulation, safeguarding of assets and economical and efficient use of resources.

The Audit Committee of the Board of Directors of the Company actively review the adequacy and effectiveness of the Internal Control Systems and suggests improvements to them. The Company has a robust Management Information System (MIS), which is an integral part of the control mechanism.

Auditors And Auditors Report

Statutory Auditors

The Shareholders of the Company at the Annual General Meeting (AGM) held on 5th September, 2014, appointed Messrs Lodha & Co., Chartered Accountants, as Statutory Auditor of the Company from the conclusion of 68th AGM till the conclusion of 71st AGM of the Company subject to ratification by members at the every AGM & Messrs Singhi & Co., Chartered Accountants, as Branch Auditor of the Company from the conclusion of 68th AGM till the conclusion of 72nd AGM of the Company subject to ratification by members at the every AGM.

Accordingly, appointment of Messrs Lodha & Co., as Statutory Auditor & Messrs Singhi & Co., as Branch Auditor is placed for ratification by shareholders at the ensuing AGM.

Auditors Report

The Auditors Report contains the following observations:

As stated in Note no. 2.34.1 of the Financial Statements due to inadequacy of profit managerial remuneration to the extent of Rs. 944.63 lakhs (including Rs. 302.72 lakhs pertaining to previous year) for year 2014-15 , which due to inadequacy of profit exceeded the limits prescribed under the provisions of Companies Act, 2013 and Companies Act, 1956 respectively has become in excess of the limits laid down in the Companies Act, 1956 awaiting Central Government approval. Pending such approvals, impact thereof on the Financial Statements is not ascertainable. The Company has already made necessary application for obtaining Central Government approval.

Secretarial Auditor

The Board has appointed Mr. Babu Lal Patni, Practicing Company Secretary to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit for the financial year ended March 31, 2015 is annexed herewith and marked as Annexure II to this report.

The Secretarial Audit report does not contain any qualification, reservation or adverse remark.

DISCLOSURES

Audit Committee

The Audit Committee comprise of all Independent Directors namely Shri Ratna Kumar Daga (Chairman), Shri Dipankar Chatterji, and Shri Sujit Bhattacharya as members. All the recommendations made by the Audit Committee were accepted by the Board.

vigil Mechanism

The Vigil Mechanism of the Company, which also incorporates a Whistle Blower Policy in terms of the Listing Agreements is approved by the Board of Directors of the Company on May 20, 2014. Disclosures can be made by a Whistle Blower through an email to the Chairman of the Audit Committee. The Policy may be accessed on the Company's website at the link http://www.hngil.com/report/ whistleblowerpolicy.pdf

Meeting of the Board

During the year 4 meetings of the Board of Directors were held. Details of compositions and other information's are provided in the Corporate Governance Report.

extract of annual return

Extract of Annual Report in Form MGT-9 is provided separately as Annexure III and forms the part of Directors' Report.

Particulars of Loans, guarantees or investment made guarantee given and securities provided

Particulars of loans given investments made, guarantee given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to note 2.18 to the standalone financial statement)

General

fixed deposits

Your Company did not accept any deposits from the public covered under Chapter V of the Companies Act, 2013 during the financial year 2014-15.

issue of shares

During the year under review, your Company did not issue any equity shares with differential rights as to dividend, voting or otherwise or issue any sweat equity shares to employees of the Company under any scheme.

remuneration from subsidiaries

Neither of the Vice Chairmen and Managing Directors nor the Executive Director of the Company receive any remuneration or commission from its subsidiary.

significant or Material order

No significant or material order was passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

Material changes and commitments

Tree have been no material changes and commitments affecting the financial position between the end of the financial year and the date of the report except the Merger of Glass Equipment (India) Ltd. (GEIL) and Quality Minerals Ltd. (QML) into the Company.

sexual harassment

During the year under review no case was fled pursuant to the Sexual Harassment of Women at Workplace (Prohibition and Redressal) Act, 2013.

Annual Listing FEES

The Company's shares continue to be listed at the National Stock Exchange of India Limited, BSE Limited and The Calcutta Stock Exchange Limited.

The annual listing fee for the year 2015-16 has been paid to all these exchanges.

Particulars OF EMPLOYEES And Related DISCLOSURES

In terms of Section 197(12) of the Act read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014 a Statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set-out in the said Rule are provided as Annexure IV.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014 are provided in Annexure IV.

transfer to Investor Education And Protection Fund

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956 relevant amount which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund established by the Central Government.

Pursuant to the provisions of Investor Education and Protection Fund (uploading of information regarding unpaid and unclaimed amount lying with companies), Rules, 2013 the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Ministry of Corporate Affairs website.

Conservation OF Energy, technology Absorption And Foreign Exchange Earnings And Outgo

The statements containing the required particulars under the Act are provided as Annexure V and forms a part of this report.

Personnel And Industrial Relations

Your Company is consolidating the human resource operations and the internal systems to enhance the operations of the Company. The Human Resource team is very active as it recruits and retains the existing talent pool of the Company. It is continuously involved in manpower planning, forecasting and conducting regular workshops to enhance the skill sets. Cordial industrial relations resulted in efficient production at all the plants of your Company.

Acknowledgements

The Directors would like to express their sincere appreciation to the business associates for their support and contribution during the year under review. The Directors would also like to thank the Company's executives, staff and workers, shareholders, customers, suppliers, alliance partners and bankers for the continued support given by them to the Company and their confidence reposed in the management.

For and on behalf of the Board,

Chandra Kumar Somany

Place : Kolkata (Chairman)

Date : May 28, 2015 DIN : 00124310


Mar 31, 2014

Dear Members,

We hereby present Annual Report together with the audited accounts of our business and operations for the financial year ended March 31, 2014.

FINANCIAL HIGHLIGHTS (Rs. in Lakhs)

Particulars For the year ended For the year ended March 31, 2014 March 31, 2013

Gross sales (including excise duty) 196,832 198,430

Profit before interest, depreciation and tax 26,436 15,569

Interest and finance charges 25,652 20,357

Profit/Loss before depreciation and tax 784 (4,788)

Depreciation 24,701 19,831

Profit/Loss before tax (23,917) (24,619)

Provision for tax (2,099) (7,439)

Profit/Loss after tax (21,818) (17,180)

Balance brought forward from previous year - 10,287

Provision for proposed dividend including Dividend Distribution Tax written 17 255 back - Forgo of right to receive Dividend by HNG Trust and Ace Trust

Transfer from General Reserve - 6,740

Amount available for appropriation (21,801) 102

Appropriation

Proposed dividend - 87

Tax on dividend - 15

Balance carried forward to the next year (21,801) -

REVIEW

In this challenging economic environment, your Company has reported total income of Rs. 190,349 Lakhs in F.Y. 2013-14 compared toRs. 183,233 Lakhs in F.Y. 2012-13. Your Company recorded an EBITDA ofRs. 26,436 Lakhs and a net loss of Rs. 21,818 Lakhs during the year under review. Due to increase in price of major raw materials the performance of the Company is severely affected. During the financial year the Company has implemented cost optimisation initiatives which helped in containing inflationary impact to some extent. Over the past few years, the glass industry witnessed capacity addition which substantially increased the demand and supply gap and consequently lowered capacity utilisation. We expect demand to increase which will lead to recovery of Glass Industry.

During the current financial year your Company has once again given major thrust on implementation of various cost saving measures. Some of the main initiatives initiated during the financial year 2013-14 are as follows :

i. Development of alternate source and vendors for procurement of raw materials;

ii. Optimising Raw Material and Power & Fuel Cost;

iii. Increasing usage of cullet;

iv. Waste reduction;

v. Enforce quality checks;

Your Directors are confident that the aforesaid initiatives will result in substantial improvement in the performance of the Company.

DIVIDEND

Your Directors do not recommend any dividend for the financial year 2013-14.

OUTLOOK

The Indian economy is expected to grow at 5% during the financial year 2014-15. Indian glass market is estimated to increase driven primarily by growth in end user market like Liquor, Beer and Food & Beverage segment. The Liquor and Beer market which has seen the entry of major MNC players like Diageo, Carlsberg, Mools and Cobra, etc. is expected to grow at double digit rate due to favorable demographic and high disposable income.

Though, the glass industry is facing competition from alternative mediums, but with the key properties such as inertness, transparency, recyclability, glass will be a dominant packaging medium for Liquor and Beverage segment. The use of glass is of critical importance in the present day when deteriorating environmental conditions have set alarm bells ringing for protection of environment in the interest of human health and well-being. There is an urgent need for preservation and improvement of environment. Increase in use of glass will go a long way in surging ahead towards achieving this objective.

Growth drivers for Glass Industry :

- Increasing population and low per capita consumption of glass

- Rising consumer awareness for Health

- Inertness

- Favourable demography and rising disposable income

- Growth in Packaging Industry Challenges faced by the Glass Industry :

- Increasing prices of the raw material

- High Power and Fuel Cost

MERGER OF GLASS EQUIPMENT (INDIA) LTD. (GEIL) AND QUALITY MINERAL LTD. (QML) WITH THE COMPANY

The Board of Directors of your Company has approved the proposal of merger of GEIL and QML, 100% subsidiaries of HNGIL with the Company.

DIRECTORS & CHIEF FINANCIAL OFFICER

The Company has received requisite notices in writing from members proposing appointment of Shri Ratna Kumar Daga, Shri Dipankar Chatterji, Shri Kishore Bhimani and Shri Sujit Bhattacharya for appointment as an Independent Directors.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence under the Companies Act, 2013. Accordingly, the Board recommends the appointment of aforesaid existing Directors as Independent Directors of the Company w.e.f. April 1,2014.

Shri Sanjay Somany and Shri Mukul Somany, Vice Chairmen and Managing Director of the Company, are liable to retire by rotation and being eligible offer their candidature for the Directorship of the Company. Your Directors recommend the re- appointment of aforesaid Directors.

Shri L.N. Mandhana, relinquished the post of Chief Financial Officer (CFO) of the Company and Shri Bimal Kumar Garodia is appointed as Sr. Vice President and Chief Financial Officer of the Company.

TRUST SHARES

Pursuant to the amalgamation of Ace Glass Containers Limited with the Company, 21,41,448* shares and 13,68,872* shares having face value of Rs. 10 each (corresponding to 1,07,07,240 and 68,44,360 shares having face value of2 each) were issued to HNG Trust and Ace Trust respectively. At present HNG Trust and Ace Trust are holding 7,797,240 & 6,844,360 shares respectively. In terms of an undertaking given to the Bombay Stock Exchange, the Company is required to make disclosures pertaining to utilisation of proceeds of shares allotted to the said Trusts until they are extinguished. During the financial year ended on March 31, 2014, 14,006,850 shares in aggregate were pledged by both the Trusts for the loan availed by the Company of Rs. 314.38 crores from State Bank of India, Syndicate Bank, Axis Bank and L&T Finance Limited.

*The Company''s shares were sub-divided from Rs. 10 per share tot 2 per share w.e.f November 13, 2009.

FIXED DEPOSITS

Your Company did not accept any deposits from the public within the meaning of section 58A of the Companies Act, 1956 during the financial year 2013-14.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 read with Accounting Standard 23 issued by the Institute of Chartered Accountants of India and form part of this Annual Report and accounts in accordance with disclosures made in respect thereto in the Notes on Financial Statements No. 1 to 2.41.

NEW COMPANIES ACT, 2013

The historic Companies Act, 2013 which replace more than five decades old Companies Act, 1956 was passed by the Parliament. The new act provides major thrust on compliance and accountability from the corporate sector and will provide further transparency in the disclosures. Your Company is already taking steps to comply with the provisions of the new Companies Act.

INTERNAL CONTROL SYSTEM

The Company has a comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on operational and strategic goals, compliance with policies, procedures, law and regulation, safeguarding of assets and economical and efficient use of resources.

The Audit Committee of the Board of Directors of the Company actively review the adequacy and effectiveness of the Internal Control Systems and suggests improvements to them. The Company has a robust Management Information System (MIS), which is an integral part of the control mechanism.

AUDITORS'' REPORT

The Auditors Report contains the following observations:

As stated in Note no.2.35.1 of the Financial Statements due to inadequacy of profit managerial remuneration to the extent of Rs. 1,121.70 Lakhs (including Rs. 579.43 Lakhs pertaining to previous year) has become in excess of the limits laid down in the Companies Act, 1956 awaiting Central Government approval. Pending such approvals, impact thereof on the Financial Statements is not ascertainable. The Company has already made necessary application for obtaining the Central Govt. approval.

ANNUAL LISTING FEES

The Company''s shares continue to be listed at the National Stock Exchange of India Limited, Bombay Stock Exchange Limited and The Calcutta Stock Exchange Limited.

The annual listing fee for the year 2014-15 has been paid to all these exchanges.

AUDITORS

M/s Lodha & Company, Chartered Accountants, Registration No. 301051E, Statutory Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Statutory Auditors, if re-appointed. It has been confirmed by M/s Lodha & Company that they have subjected themselves to peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of the ICAI.

M/s Singhi & Co., Chartered Accountants, Branch Auditors of the Company''s three units namely Nashik, Puducherry and Rishikesh will also retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Branch Auditors, if re-appointed.

The Board of Directors recommends re-appointment of the aforesaid Auditors.

COST AUDITORS

In respect of financial year under review your Company had appointed M/s Shome and Banerjee and M/s N. Radhakrishnan & Company, Cost Accountants for conducting cost audit of the Company. The Cost Audit reports for the financial year 2012- 13 were filed by the Cost Auditor within the due date.

The Cost Auditors have confirmed their eligibility and willingness to accept the office of the Cost Auditors for the financial year 2014-15.

SECRETARIAL AUDITORS

In terms of section 204 of the Companies Act, 2013 the Board at its meeting held on May 20, 2014 has appointed Mr. Babu Lal Patni, Practicing Company Secretaries, as Secretarial Auditor for conducting Secretarial Audit of the Company for the financial year 2014-15.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956 relevant amount which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund established by the Central Government.

Pursuant to the provisions of Investor Education and Protection fund (uploading of information regarding unpaid and unclaimed amount lying with companies), Rules, 2013 the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September 27, 2013 (date of last AGM) on the Ministry of Corporate Affairs website.

DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956

The Directors hereby confirm that :-

i) In preparation of the annual accounts for the financial year 2013-14, applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) They selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year 2013-14 and of the profits/losses of the Company for the said financial year.

iii) They took proper and sufficient care to maintain 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) They prepared the annual accounts on a ''going concern'' basis.

CORPORATE GOVERNANCE

The Company has been practising the principles of good governance with a view to achieve transparent, accountable and fair management. The report on Corporate Governance along with the Certificate of the Auditors, M/s Lodha & Co., Chartered Accountants, confirming the compliance conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report.

SUBSIDIARY COMPANIES

As on March 31, 2014, your Company has three subsidiaries namely : Quality Minerals Limited, Glass Equipment (India) Ltd. and HNG Global GmbH.

Pursuant to the General Circular No. 2/2011 issued by the Ministry of Corporate Affairs, granting general exemption to the companies from attaching annual accounts of the subsidiary companies, the Board of Directors in its meeting held on May 20, 2014 has given its consent for not attaching the balance sheet of its subsidiaries.

Shareholders of the Company as well as of the subsidiary companies who are interested in obtaining annual accounts of the subsidiary companies and related detailed information may write to the Company Secretary at the Registered Office of the Company. These documents are also available for inspection during business hours by the shareholders of the Company and its subsidiaries at the Registered Offices.

Consolidated Financial Statements of the Company and its three subsidiaries duly audited for the financial year ended March 31, 2014 forms part of the Annual Report of the Company.

EXPORTS

During the year, direct export turnover was Rs. 11,483 Lakhs compared to Rs. 14,031 Lakhs during the preceding year.

PERSONNEL AND INDUSTRIAL RELATIONS

Your Company is consolidating the human resource operations and the internal systems to enhance the operations of the Company. The Human Resource team is very active as it recruits and retains the existing talent pool of the Company. It is continuously involved in manpower planning, forecasting and conducting regular workshops to enhance the skill sets. Cordial industrial relations resulted in efficient production at all the plants of your Company.

STATEMENT OF EMPLOYEES

Statement of particulars of employees as required under section 217(2A) of the Companies Act, 1956 and rules framed there under forms a part of this Annual Report.

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

The statements containing the required particulars under 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 are annexed hereto and forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

Sustainable development is an integral part of HNGIL Group''s business philosophy. The Group has always believed in creation of wealth for its stakeholders. As a responsible corporate, HNGIL is focused on the happiness of people living in its larger neighbouring communities. We are also committed to the best industry standards in Health, Safety and Environment. The best safety equipments have been deployed at the critical locations and constant supervision is also done to maintain the highest safety standards. Our CSR team works towards improving the living conditions of the underprivileged and makes a positive difference in their lives. A number of focused initiatives have been implemented near the plant locations. The Company in compliance of Companies Act, 2013 has constituted a CSR committee comprising of Shri Sanjay Somany, Shri Mukul Somany and Shri Kishore Bhimani.

ACKNOWLEDGMENTS

Your Directors wish to express their gratitude and appreciation for assistance, co-operation and encouragement extended by all financial institutions, banks, government authorities, customers, vendors and members during the year and place on record their deep sense of appreciation for the committed services of their executives, staff and workers for an overall performance of the Company.

For and on behalf of the Board

Place : Kolkata Chandra Kumar Somany

Date : May 20, 2014 Chairman


Mar 31, 2012

We are delighted to present the Annual Report together with the Audited Accounts of our business and operations for the year ended March 31, 2012.

Financial Highlights

(Rs. In Lacs) Particulars Year ended March 31, 2012 Year ended March 31, 2011

Gross sales (including excise duty) 2,04,249 1,68,183

Profit before interest, depreciation and tax 30,390 27,029

Interest and finance charges 9,233 5,083

Profit before depreciation and tax 21,157 21,946

Depreciation 11,652 9,967

Profit before tax 9,505 11,979

Provision for tax 419 3,337

Profit after tax 9,086 8,642

Balance brought forward from previous year 5,962 3,590

Provision for proposed dividend including Dividend 255 248

Distribution Tax - forego of right to receive Dividend by HNG Trust and Ace Trust

Transfer from Debenture Redemption Reserve 2,500 -

Amount available for appropriation 17,803 12,480

Appropriation

General Reserve 1,000 5,000

Debenture Redemption Reserve 5,000 -

Proposed dividend 1,310 1,310

Tax on dividend 206 208

Balance carried forward to the next year 10,287 5,962

Review

Year 2011-12 was a critical year for us at HNGIL. The cost of key inputs continued to soar during the year. We continued to pursue our ambitious expansion programmes at Nashik and Naidupeta. Despite the challenges, we posted 21.4% increase in our Gross Sales to cross Rs 2,000 crore mark. While our net sales increased by 21.7% from Rs 1,543 crore in 2010-11 to Rs 1878 crore in 2011-12; our EBIDTA improved by 12.2% from Rs 271 crore in 2010-11 to Rs 304 crore in 2011-12. Our net profit improved by 5.8% from Rs 86 crore in 2010-11 to Rs 91 crore in 2011-12. During the year, your Company completed the Nashik project within its scheduled time, leading to no cost over-runs. Your Company's greenfield project at Naidupeta remained on schedule, and is expected to be commissioned by Q2FY13.

Dividend

Your Directors recommend a dividend of 75% i.e. Rs. 1.50/- per share for the year ended 2011-12 which is same as dividend declared for the financial year 2010-11. The outgo as dividend, including applicable tax, this year is Rs. 1,516 Lacs.

Outlook

The glass container industry globally is expected to grow to $53 billion by 2016 against $45 billion by 2012. Most of this growth will be propelled by the emerging economies having lower per capita consumption. India, with a per capita consumption of 1.5 kgs, ranks among the lowest in the world. With the end user industries like alcohol, beer, food and FMCG expected to soar in wake of the inherent demographic advantage, rising per capita income and increasing demand for quality products, the glass container industry is expected to benefit manifolds. Having pre-empted the trend, we at HNG have built our capacities in a phased manner. Being the leader, we have further honed our competitive advantage in terms of quality, cost-advantage, scale and product range to cater to the commodity and premium segments alike. Our product development initiatives coupled with our understanding of the processes have enabled us to evolve into a preferred partner to our clients. With the foundation built, we are confident in paving our way towards a sustainable future.

Directors & Company Secretary

The Board wishes to place on record its sincere appreciation and gratitude for the unstinted support and guidance received from Dr. Indrajit Kumar Saha who left for his heavenly abode on December 10, 2011.

During the year under review, Shri Shree Kumar Bangur resigned from the directorship of the Company. The Board also places its sincere appreciation for his valuable contribution during his tenure as a director of the company. Shri Sujit Bhattacharya and Shri Dipankar Chatterji are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re- appointment. Your Directors recommend the re-appointment of aforesaid Directors.

Shri Priya Ranjan, Company Secretary resigned from the services of the Company, at the close of business hours on September 10, 2011 & Shri Laxmi Narayan Mandhana was appointed as Company Secretary of the Company w.e.f. September 19, 2011.

Trust Shares

Pursuant to amalgamation of Ace Glass Containers Limited with the Company, 21,41,448* shares and 13,68,872* shares having face value of Rs. 10 each (corresponding to 1,07,07,240 and 68,44,360 shares having face value of Rs. 2 each) were issued to HNG Trust and Ace Trust respectively. At present HNG Trust & Ace Trust are holding 77,97,240 & 68,44,360 shares respectively. In terms of an undertaking given to the Bombay Stock Exchange, the Company is required to make disclosures pertaining to utilisation of proceeds of shares allotted to the said Trusts until they are extinguished. During the financial year ended on March 31 2012, 1,22,43,000 shares in aggregate were pledged by both the Trusts with IDBI Trusteeship Services Limited, for the loan availed by the Company of Rs. 100 Crore from Tata Capital Ltd. for meeting its capital expenditure.

*The Company's shares were sub-divided from Rs.10 per share to Rs. 2 per share w.e.f. November 13, 2009.

Fixed Deposits

Your Company did not accept any deposits from the public within the meaning of section 58A of the Companies Act, 1956 during the financial year 2011-12.

Consolidated Financial Statements

Consolidated financial statements have been prepared in accordance with Accounting Standard 21 read with Accounting Standard 23 issued by the Institute of Chartered Accountants of India and form part of this Annual Report and Accounts in accordance with disclosure made in respect thereto in the notes on Financial Statements No. 2.1 to 2.46.

Auditors' Report

The Auditors' Report read along with notes on accounts is self-explanatory and therefore, does not call for any further comment under section 217(3) of the Companies Act, 1956.

Annual Listing Fees

The Company's shares continue to be listed at the National Stock Exchange of India Limited, Bombay Stock Exchange Limited and The Calcutta Stock Exchange Limited.

The annual listing fee for the year 2012-13 has been paid to all these exchanges.

Auditors

M/s Lodha & Co., Chartered Accountants, Registration No. 301051E, Statutory Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Statutory Auditors, if re-appointed. It has been confirmed by M/s Lodha & Co., that they have subjected themselves to peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of the ICAI.

M/s Singhi & Company, Chartered Accountants, Branch Auditors of the Company's three units namely Nashik, Puducherry and Rishikesh will also retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Branch Auditors, if re-appointed.

The Board of Directors recommend re-appointment of the aforesaid Auditors.

Directors' Responsibility Statement pursuant to Section 217(2AA) of the Companies Act, 1956 The Directors hereby confirm that:-

i) In preparation of the annual accounts for the financial year 2011-12, applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) They selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year 2011-12 and of the profits of the Company for the said financial year.

iii) They took proper and sufficient care to maintain 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) They prepared the annual accounts on a 'going concern' basis.

Corporate Governance

The Company has been practising the principles of good governance with a view to achieve transparent, accountable and fair management. The report on Corporate Governance along with the certificate of the Auditors M/s Lodha & Co., Chartered Accountants, confirming the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms a part of this Annual Report.

Subsidiary Companies

As on March 31, 2012 your Company has three subsidiaries namely: Quality Minerals Limited, Glass Equipment (India) Limited and HNG Global GmbH.

Pursuant to the General Circular No. 2/2011 issued by Ministry of Corporate Affairs, granting general exemption to the companies from attaching annual accounts of the subsidiary companies, the Board of Directors in its meeting held on May 15, 2012 has given its consent for not attaching the balance sheet of its subsidiaries.

Shareholders of the Company as well as of the subsidiary companies who are interested in obtaining annual accounts of the subsidiary companies and related detailed information may write to the Company Secretary at the Registered Office of the Company. These documents will be available during business hours for inspection by the shareholders of the Company and of the subsidiary companies at the Registered Office of the Company and at the Registered Offices of its subsidiaries.

Consolidated financial statements of the Company and its subsidiaries duly audited for the financial year ended March 31, 2012 forms part of the Annual Report of the Company.

Exports

During the year, direct export turnover was Rs 7,687 Lacs, compared to Rs. 6,730 Lacs during the preceding year.

Personnel and Industrial relations

The Company has a strong workforce of 7000 people (including contractual lab our) as on March 31, 2012. The Company believes in the highest standards of people management and personal growth. It instills in each of the members of the HNG family a feeling of ownership, responsibility and performance to the par of excellence in each of the operations pertaining to production and servicing. The Company aspires to set the highest standards of internationally benchmarked human resource practices, which would be exemplary for other manufacturers. The industrial relations were cordial and the Management thoroughly acknowledges the support from the employees at all levels.

Statement of employees

Statement of particulars of employees as required under section 217(2A) of the Companies Act, 1956 and rules framed there under forms a part of this Annual Report.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The statements containing the required particulars under 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 are annexed hereto and forms a part of this report.

Corporate Social Responsibility

At HNG, we believe that the primary motive of every business is to create value for its stakeholders. As a result, our social obligations command the same weight age as our passion to achieve financial benchmarks. We have always believed in the power of inclusive growth. As a result, we have dedicated a part of our efforts and resources in contributing to the key social causes relating to education, healthcare for women and children and environment. As a part of greater social cause, we have established small townships adjoining our units, which has enabled recruitment of quality professionals and also contributes to the local economy of the region.

Acknowledgments

Your Directors wish to place on record their sincere appreciation for the support and cooperation extended by all clients, financial institutions, banks, employees, all the stakeholders of your Company, Government of India and State Governments and look forward to their continued support in the years ahead.

For and on behalf of the Board

Kolkata Chandra Kumar Somany

May 15, 2012 Chairman


Mar 31, 2011

We are delighted to present the Annual Report together with the Audited Accounts of our business and operation for the year ended March 31, 2011.

Financial Highlights

(Rs. in lacs)

Year ended Year ended March 31, 2011 March 31, 2010

Gross sales (including excise duty) 1,67,290 1,44,988

Profit before interest, depreciation and tax 27,051 31,633

Interest and finance charges 5,106 4,717

Profit before depreciation and tax 21,945 26,916

Depreciation 9,967 8,612

Profit before tax 11,979 18,304

Provision for tax 3,337 2,785

Profit after tax 8,642 15,520

Balance brought forward from previous year 3,590 2,575

Provision for proposed dividend including 247 - Dividend Distribution Tax - Forgo of right to receive Dividend by HNG Trust and Ace Trust

Amount available for appropriation 12,480 18,094

Appropriation

General Reserve 5,000 11,115

Debenture Redemption Reserve - 1,875

Proposed dividend 1,310 1,310

Tax on dividend 208 204

Balance carried forward to the next year 5,961 3,590

Review

The year under review was an eventful year which saw huge escalation in cost for most of the critical inputs. In this challenging environment your Company reported a gross sales of Rs. 1,67,290 lacs in 2010-11 compared to Rs. 1,44,988 lacs in 2009-10 on account of increased scale and higher sales. Your Company recorded an EBIBTA of Rs. 27,051.39 lacs and a net profit of Rs. 8,642 lacs in the year under review.

Dividend

Your Directors recommend a dividend of 75% i.e. Rs. 1.50 per share for the year ended 2010-11 which is same as dividend declared for the financial year 2009-10. The outgo as dividend, including applicable tax, this year is Rs. 1,518 lacs.

Outlook

The container glass industry is poised with the growing awareness on account of rising hygienic packaging demand, growing population, increasing per capita income of average Indians and low per capita glass consumption. In order to capitalise the emerging opportunities, your Company is constantly improving, widening and emphasising on the various range of colours, size and design possibilities of glass and investing in technology to improve the weight and strength of glass containers. Your Company is exploring various areas of cost reduction.

Directors

During the year under review, Shri Venkatesan Sridar was appointed as an Additional Director with effect from 2nd November, 2010 and Shri Rakesh Kumar Sharma was appointed as an Executive Director with effect from 1st March, 2011 in place of Shri Ram Raj Soni who had resigned from the services of the Company.

Shri Chandra Kumar Somany, Shri Shree Kumar Bangur and Shri Kishore Bhimani are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment. Your Directors recommend the re-appointment of aforesaid Directors.

Trust Shares

Pursuant to amalgamation of Ace Glass Containers Limited with the Company, 21,41,448* shares and 13,68,872* shares having face value of Rs. 10 each (corresponding to 1,07,07,240 and 68,44,360 shares having face value of Rs. 2 each) were issued to HNG Trust and Ace Trust respectively. In terms of an undertaking given to the Bombay Stock Exchange, the Company is required to make disclosures pertaining to utilisation of proceeds of shares allotted to the said Trusts until they are extinguished. During the financial year ended on March, 31 2011, HNG Trust sold 29,10,000 shares (post split). The proceeds from the sale of shares would be utilised for the purpose of meeting capital expenditure requirement of the Company.

*The Companys shares were sub-divided from Rs. 10 per share to Rs. 2 per share w.e.f. November 13, 2009.

Fixed Deposits

Your Company did not accept any deposits from the public within the meaning of section 58A of the Companies Act, 1956 during the financial year 2010-11.

Consolidated Financial Statements

Consolidated financial statements have been prepared in accordance with Accounting Standard 21 read with Accounting Standard 23 issued by the Institute of Chartered Accountants of India and form part of this Annual Report. Applicable disclosures are made in the Notes on Accounts in Schedule S

Auditors Report

The Auditors Report read along with notes on Accounts is self-explanatory and therefore, does not call for any further comment under section 217(3) of the Companies Act, 1956.

Annual Listing Fees

The Companys shares continue to be listed at the National Stock Exchange of India Ltd, Bombay Stock Exchange Limited and The Calcutta Stock Exchange Limited.

The annual listing fee for the year 2011-12 has been paid to all these exchanges.

Auditors

M/s. Lodha & Company, Chartered Accountants, Registration No. 301051E, Statutory Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Statutory Auditors, if re-appointed. It has been confirmed by M/s. Lodha & Company that they have subjected themselves to peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of the ICAI.

M/s. Singhi & Co., Chartered Accountants, and Branch Auditors of the Companys three Units namely Nashik, Puduchery and Rishikesh will also retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Branch Auditors, if re-appointed.

The Board of Directors recommend re-appointment of the aforesaid Auditors.

Directors Responsibility Statement pursuant to Section 217(2AA) of the Companies Act, 1956

The Directors hereby confirm that:- i) In preparation of the annual accounts for the financial year 2010-11, applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) They selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year 2010-11 and of the profits of the Company for the said financial year.

iii) They took proper and sufficient care to maintain

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) They prepared the annual accounts on a going concern basis.

Corporate Governance

The Company has been practising the principles of good governance with a view to achieve transparent, accountable and fair management. The report on Corporate Governance along with the Certificate of the Auditors M/s. Lodha & Co., Chartered Accountants, confirming the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms a part of this Annual Report.

Subsidiary companies

As on 31.03.2011, your Company has two subsidiaries namely: Quality Minerals Limited and Glass Equipment (India) Ltd.

Pursuant to the Circular No. 2/2011 issued by Ministry of Corporate Affairs, general exemption has been granted to the companies from attaching annual accounts of the subsidiary companies, with that of the Companys accounts. The Board of Directors in its meeting held on 21.05.2011 has given its consent for not attaching the Balance Sheet of its subsidiaries. Accordingly, shareholders of the Company who are interested in obtaining annual accounts of the subsidiary companies may write to the Company Secretary at the Registered Office of the Company. This document will also be available for inspection by the shareholders of the Company at the Companys Registered Office during business hours.

Consolidated financial statements of the Company and its two subsidiaries duly audited for the financial year ended March 31, 2011 forms part of the Annual Report of the Company.

Exports

During the year, direct export turnover was Rs. 6,730 lacs, compared to Rs. 7,668 lacs during the preceding year.

Personnel and Industrial relations

Your Company is consolidating the human resource operations and the internal systems to enhance the operations of the Company. The Human resource team is very active and is involved right from manpower planning to forecasting and conducting regular workshops to enhance the skill sets. The human resource team undertook initiatives such as procurement initiatives and conducted yoga classes. Cordial industrial relations resulted in efficient production at all the plants of your Company.

Statement of employees

Statement of particulars of employees as required under section 217(2A) of the Companies Act, 1956 and rules framed thereunder forms a part of this Annual Report.

Conservation of energy, technology absorption and foreign exchange earning and outgo

The statements containing the required particulars under 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 are annexed hereto and forms a part of this report.

Corporate Social Responsibility

HNG is not just a profit driver but it is a responsible corporate citizen. It plays an important role in developing the community by ensuring holistic life enhancement with its initiatives.

HNG actively participates for the sustained development of the community and its employees. Its developmental activities are incessantly expanding in the realms of healthcare, education, women upliftment and green initiatives to maintain the ecological balance.

Acknowledgments

Your Directors wish to express their gratitude and appreciation for assistance, co-operation and encouragement extended by all financial institutions, banks, government authorities, customers, vendors and members during the year and place on record their deep sense of appreciation for the committed services of their executives, staff and workers for an overall performance of the Company.

For and on behalf of the Board

Kolkata Chandra Kumar Somany

May 21, 2011 Chairman


Mar 31, 2010

We are delighted to present the Annual Report together with the Audited Accounts of our business and operation for the year ended March 31, 2010.

Financial Highlights

Rs. (in lacs)

Year ended March 31, 2010 Year ended March 31, 2009

Gross sales (including excise duty) 1,44,988 1,43,860

Profit before interest, depreciation and tax 31,633 23,591

Interest and finance charges 4,717 4,345

Profit before depreciation and tax 26,916 19,246

Depreciation 8,612 7,474

Profit before tax 18,304 11,772

Provision for tax 2,785 997

Profit after tax 15,519 10,775

Balance brought forward from previous year 2,575 1,072

Amount available for appropriation 18,094 11,847 Appropriation General reserve 11,115 7,000

Debenture Redemption Reserve 1,875 1,250

Proposed dividend 1,310 873

Tax on dividend 204 14,504 149 9,272

Balance carried forward to the next year 3,590 2,575



Review

There was a sense of business pessimism in the global business environment in the financial year 2009-10 on account of recession, and your Company successfully fought it out and achieved higher numbers of sales and profits through vigorous efforts. During the year under review, your Company has achieved a profit of Rs. 31,633 lacs before interest, depreciation and tax as compared to profit of Rs. 23,591 lacs achieved during the previous year representing a robust increase of 34.09%.

The Companys profit before tax stood at Rs. 18,304 lacs as against Rs. 11,772 lacs attained during the previous year. The increase in profit before tax by 55.49% could be achieved primarily because of efficient inventory management and reduction in manufacturing and operational cost.

Dividend

Your Directors recommend a dividend of 75% i.e. Rs. 1.50 per share for the year ended 2009-10 as against Re. 1 per share last year. The outgo as dividend, including applicable tax, this year is Rs. 1514.41 lacs.

Outlook

The Indian economy is expected to grow @ 8.5% in the next fiscal year. With the growing demand in Indian packaging and food industry, your Directors are confident that the Company will continue to grow and prosper with the opportunities associated with the expanding market. The increasing per capita income of average Indians and low per capita glass consumption is expected to drive the off-take of the container glass industry. Besides, the per capita beer and alcohol consumption is also very low compared to the global average, providing optimism for the container glass industry. With the increasing environment consciousness and health consciousness, container glasses positioned at an advantageous position compared to other forms of packaging like PET bottles. Your Company is well equipped to address the growing demand anticipated in the coming years.

Directors & CFO

Dr. Indrajit Kumar Saha, Shri Dipankar Chatterji and Shri Ratna Kumar Daga are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment. Your Directors recommend the re-appointment of aforesaid Directors.

Shri Sanjay Somany, Managing Director and Shri Mukul Somany, Joint Managing Director of the Company whose tenure of appointment expires on September 30, 2010, have offered to render their services, if re-appointed. The Board of Directors in its meeting held on August 13, 2010 resolved to recommend their appointment as Vice Chairman and Managing Director to the shareholders, in view of the valuable contribution made by them in the growth of the Company.

Subject to the approval of Shareholders in the ensuing Annual General Meeting and Central Government, your Directors recommend appointment of Dr. Indrajit Kumar Saha a noted Management, Human Resource & Industrial Relation Consultant on retainership basis.

During 2009-10, Shri Laxmi Narayan Mandhana was appointed as Sr. Vice President and Chief Financial Officer of the Company with effect from December 5, 2009.

Trust Shares

Pursuant to amalgamation of Ace Glass Containers Limited with the Company, 21,41,448* shares and 13,68,872* shares were issued to HNG Trust and Ace Trust respectively. In terms of an undertaking given to the Bombay Stock Exchange, the Company is required to make disclosures pertaining to utilisation of proceeds of shares allotted to the said Trusts until they are extinguished. During the financial year ended on March, 31 2010, no shares lying in the account of the Trusts were disposed off.

*The Companys shares were sub-divided from Rs.10 per share to Rs. 2 per share w.e.f. November 13, 2009. Post sub-division, shares held by HNG Trust is 1,07,07,240 and ACE Trust is 68,44,360.

Splitting of Equity Shares

During 2009-10, the equity share of the Company having face value of Rs.10 each were sub-divided into five equity shares of Rs. 2 each.

Fixed Deposits

Your Company did not accept any deposits from the public within the meaning of section 58A of the Companies Act, 1956 during the financial year 2009-2010.

Consolidated Financial Statements

Consolidated financial statements have been prepared in accordance with Accounting Standard 21 read with Accounting Standard 23 issued by the Institute of Chartered Accountants of India and form part of this Annual Report and accounts in accordance with disclosure made in respect thereto in the Notes on Accounts (Schedule "S").

Auditors Report

The observations of the Auditors in para 4 of the Auditors’ Report has been explained in Note 1(e) of Schedule S to the Notes on Accounts.

Annual Listing Fees

The Companys shares continue to be listed at the National Stock Exchange of India Ltd, Bombay Stock Exchange Limited and The Calcutta Stock Exchange Limited.

The annual listing fee for the year 2010-11 has been paid to all these exchanges.

Auditors

M/s Lodha & Company, Chartered Accountants, Statutory Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Statutory Auditors, if re-appointed. It has been confirmed by M/s Lodha & Company that they have subjected themselves to peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of the ICAI.

M/s Singhi & Co., Chartered Accountants, Branch Auditors of the Companys three units namely Nashik, Puduchery and Rishikesh will also retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Branch Auditors, if re-appointed.

The Board of Directors recommend re-appointment of the aforesaid Auditors.

Directors Responsibility Statement pursuant to Section 217(2AA) of the Companies Act, 1956

The Directors hereby confirm that:-

i) In preparation of the annual accounts for the financial year 2009-10, applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) They selected such accounting policies and applied them

consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year 2009-10 and of the profits of the Company for the said financial year.

iii) They took proper and sufficient care to maintain 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) They prepared the annual accounts on a ‘going concern’ basis.

Corporate Governance

The Company has been practising the principles of good governance with a view to achieve transparent, accountable and fair management. The report on Corporate Governance along with the Certificate of the Auditors M/s Lodha & Co., Chartered Accountants, confirming the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms a part of this Annual Report.

Subsidiary companies

As on 31.03.2010, your Company has two subsidiaries namely: Quality Minerals Limited and Glass Equipment (India) Ltd.

Pursuant to an exemption received from the Ministry of Corporate Affairs, Government of India, the Directors’ Reports and Report of the Auditors of the aforesaid two subsidiaries along with their financial statements have not been attached to the accounts of the Company for 2009-10.

Any shareholder who is interested in obtaining a copy of these details may write to the Company Secretary at the Registered Office of the Company. These documents will also be available during business hours for examination by the shareholders of the Company at its Registered Office and also at the Registered Offices of the two subsidiaries.

However, a statement containing brief financial details of the Companys subsidiaries for the financial year ended 31st March, 2010 is included in the Annual Report, as per the terms of the aforesaid exemption order.

Exports

During the year, direct export turnover was Rs. 5030 lacs, compared to Rs. 5773 lacs achieved during the preceding year. Your Company is making vigorous efforts to tap export market and believes that there is a large potential demand overseas.

Personnel and Industrial relations

Your Company is strengthening and developing human resources and systems to improve overall efficiency and motivation. The principal initiatives undertaken by the Company comprised skill development, acquisition programmes and also yoga classes to name a few. Industrial relations at all plants continued to remain cordial during the year.

Statement of employees

Statement of particulars of employees as required under section 217(2A) of the Companies Act, 1956 and rules framed thereunder forms a part of this Annual Report.

Conservation of energy, technology absorption and foreign exchange earning and outgo

The statements containing the required particulars under 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 are annexed hereto and forms a part of this report.

Corporate Social Responsibility

HNG endeavors blending optimally its business conduct with corporate care and instill within an utmost commitment to social responsibilities either directly or through its affiliates.

HNG has established Bal Bharti School at Bahadurgarh, which not only caters to the requirement of the children of the Company’s employees but also ensures that those in the peripheral areas are also benefitted. It has also promoted healthcare benefits by contributing to corpus funds of hospitals and setting up special programs viz. eye checking campaigns and heart treatment amongst others. Parks and gardens such as the McPherson Square, now called Maharana Pratap Udyan in South Kolkata maintained by the Company has given a fillip to the residents of the area who can relax and take in fresh breath amidst the citys chaos.

Acknowledgments

Your Directors wish to express their gratitude and appreciation for assistance, co-operation and encouragement extended by all financial institutions, banks, government authorities, customers, vendors and members during the year and place on record their deep sense of appreciation for the committed services of their executives, staff and workers for an overall performance of the Company.

For and on behalf of the Board

Kolkata Chandra Kumar Somany

August 13, 2010 Chairman

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