Mar 31, 2018
Boardâs 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 Iâ :
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 IIâ 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 IIIâ 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 IVâ
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The statements containing the required particulars under the Act are provided as "Annexure Vâ 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 Iâ :
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 riskâmitigation 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 IIâ 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 IIIâ 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 IVâ.
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 Vâ 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 Auditorsà 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 Ãgoing concernà 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 Directorsà 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 CompanyÃs 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