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Directors Report of Hindusthan National Glass & Industries Ltd.

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

 
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