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Notes to Accounts of Hindusthan National Glass & Industries Ltd.

Mar 31, 2018

B. The company is paying Anti-Dumping Duty after the same was imposed by Government of India for five years on Soda Ash originating in from (1) China, EU, Kenya, Pakistan, Iran, Ukraine and USA from 03.07.2012 and (2) Turkey and Russia from 18.04.2013. The company has taken up the matter (Mid Term Review) through Trade Association (AIGMF - All INDIA GLASS MANUFACTURER FEDERATION) for removal of these duties on 21.07.2015. DGAD (Director General Anti-Dumping) has for both cases referred as (1) and (2) above, allowed removal of duty on 23.09.2016. However, the matter was challenged in Gujarat High court and accordingly the duty removal is kept in abeyance. On 5th April 2018, DGAD again refused to initiate Sunset Review, thereby proving the grounds that continuation of Anti-Dumping Duty on Soda Ash is not prudent. Though the matter is again reversed by Gujarat High Court, there is a fair chance for removal of Anti-dumping Duty from 2017. In view of judicial uncertainty in the matter, in the accounts for the year 2017-18, the claim is not accounted for and the same has been shown as Contingent Asset.

1._| CAPITALISATION OF EXPENDITURE

The company had capitalized the following expenses of revenue nature incurred for construction of Property, plant and equipment and trial run, to the cost of Property, plant and equipment/capital work-in-progress (CWIP). Consequently, exp

2._| SEGMENT INFORMATION

The Company''s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management this is the only operating business segment, as per the Indian Accounting Standard (Ind AS) 108 on Operating segment. Thus no separate segment information is disclosed for primary business segment. Secondary information is reported geographically.

3.RELATED PARTY DISCLOSURES

I Names of the related parties and nature of relationship A) Joint Venture Company

HNG Float Glass Limited (Refer Note 2.2.6)

B) Key Managerial Personnels and their relatives.

(i) Mr. Chandra Kumar Somany - Chairman and Non Executive Director (Relative of Key Managerial Personnel) (Till 15th May 2017)

(ii) Mrs. Sudha Somany - Wife of Mr. Chandra Kumar Somany

(iii) Mr. Sanjay Somany - Chairman and Managing Director and Key Managerial Personnel

(iv) Mr. Mukul Somany - Vice Chairman and Managing Director and Key Managerial Personnel

(v) Mr. Rakesh Kumar Sharma - Executive Director and Key Managerial Personnel (Till 28th February 2017)

(vi) Mr. Bharat Somany - Relative of the Director

(vii) Mr. Sujit Bhattacharya - Independent Director (Till 31st March 2017)

(viii) Mr. Ratna Kumar Daga - Independent Director

(ix) Mr. Dipankar Chatterji - Independent Director

(x) Mrs. Rita Bhimani - Independent Director

(xi) Mr. Narayanaswami Sitaraman - Independent Director (w.e.f. 13th April 2017)

C) Enterprises over which any person described in [B (i) to (xi)] above is able to exercise significant influence and with whom the Company has transactions during the year.

AMCL Machinery Limited Mould Equipment Limited Brabourne Commerce Private Limited Rungamattee Trexim Private Limited Saurav Contractors Private Limited Khazana Marketing Private Limited Spotme Tracon Private Limited Spotlight Vanijya Limited

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. The Company has provided corporate Guarantees to related parties, as disclosed above, towards their borrowing facilities (refer note 2.34.A.2) and no amount/income is being received by the Company in this regard. For the year ended March 31, 2018, the Company has not recorded any impairment allowances in respect of receivables relating to amounts owed by related parties (March 31, 2017: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

4. LEASES

The company has taken certain land on Finance Lease. Carrying Value of Land taken on Lease is Rs, 5056.20 Lakhs (31st March 2017 - Rs, 5121.69 Lakhs).

The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Blocks of Buildings and Vehicles. The lease term is 75 years (Rishikesh and Head Office) and 95 years (In case of Sinnar) for Building. The lease term is 3-5 years for Vehicles, after which the legal title will pass on the Company. The lease has been recognized as an asset at the present value of the minimum lease payments. Minimum lease payments payable in future at the balance sheet date and their present value are as under:

Assets taken under Operating Leases:

Certian office premises, Office equipments and system storage and support are obtained on operating lease. There is no contingent rent in the lease agreements. The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease agreements. There are no sublease and all the leases are cancelable in nature. The aggregate lease rentals are charged as "Rent" in Note ''2.30'' of the financial statement.

I The Company is incurring losses since Financial Year 2012-2013 which have resulted in reduction of net-worth. Due to depressed market demand and resultant adverse financial performance, the lenders had restructured the term loans w.e.f. December 2014 and laid stipulations thereof which among other things included moratorium in repayment of installments, infusion of equity by Promoters in various periods and fresh valuation of its assets by a Valuer registered with Institute of Valuers. The company has paid Principal for the quarter ended September 2017 and interest thereon till October 2017. However Principal for the quarters ended December 2017 & March 2018 and interest (comprising interest on Term loan and cash credit) for November / December 2017 to March 2018 aggregating to Rs, 13682.34 Lakhs have not been paid. Letter of Credit and interest for November / December 2017 to March 2018 aggregating to Rs, 3470.82 Lakhs has also not been paid on due dates. Penal interest and other claims aggregating to Rs, 237.17 Lakhs has also not been paid. Subsequently, the lenders have asked for fresh projections of profitability and consequent repayment of loans. The company has submitted such projections to the lenders which are under consideration. The company and its promoters are in the process of regularising the above situations. Considering the ameliorative measures taken by the company, expected improvement in the performance of the Company over a period of time and its asset coverage, the accounts of the Company have been prepared on a going concern basis.

The Hon''ble Supreme Court vide its order dated 11th November 2016 has upheld the constitutional validity of levy of Entry Tax. This is being given effect to by the various state governments subject to follow up decisions before various judicial forums and appropriate authorities and the amount of said levy is yet to be determined. Accordingly, the same has not been recognized by the company. In the event of the levy being held sustainable, amount on overall basis in this respect has been estimated to be Rs, 2059 Lakhs (excluding amount of interest if any there against refer note no. 2.34) and the same will be given effect to on determination thereof.

5. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with the insurance companies.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/separation. This is an unfunded plan.

The Company has a separate Provident Fund Trust (funded) whereby, all the employees are entitled to benefits as per Provident Fund Act / Trust Deed. Any shortfall for the Trust is borne by the Company, hence the same is treated as a defined benefit scheme.

As per Ind AS "Employee Benefits" (Ind AS - 19), the disclosures of Employee Benefits as defined in the Standard are given below:

The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the quarter ended December 31, 2011. The actuary has accordingly provided a valuation and based on the below provided assumptions there is no shortfall as at 31st March 2018; 31st March 2017.

The Company contributed '' NIL towards provident fund during the year ended March 31, 2018 ('' NIL during the year ended March 31, 2017).

b) Defined Benefit Plan

The employee''s gratuity fund scheme managed by Insurers is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age.

V. Compensated Absences

The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the company as at 31st March 2018 is Rs, 430.30 Lakhs ( 31st March 2017 is Rs, 440.59 Lakhs, 31st March 2016 is Rs, 384.70 Lakhs).

VI. In respect of Gratuity (funded), the funds are managed by the Insurers. Accordingly, the percentage or amount that each major category constitutes the Fair value of total plan assets and effect thereof on overall expected rate of return on asset have not been disclosed.

The estimates of rate of escalation in salary considered in actuarial valuation taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for plan assets management.

The contributions expected to be made by the Company for the year 2018-19 is yet to be determined.

(iii) Fair Value Technique

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. The following methods and assumptions were used to estimate the fair values:

a) The fair value of cash and cash equivalents, trade receivables, trade payables, current financial liabilities and borrowings approximate their carrying amount largely due to the short-term nature of these instruments. The board considers that the carrying amounts of financial assets and financial liabilities recognized at cost/amortized costs in the financial statements approximates their fair values.

b) Fair Value of Long term debt approximates their carrying value subject to adjustments made for transaction cost.

c) Investments in liquid and short- term mutual funds are measured using quoted market prices at the reporting date multiplied by the quantity held.

6._| FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s financial liabilities comprise borrowings, capital creditors and trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s financial assets include trade and other receivables, cash and cash equivalents, investments at cost/fair value and deposits.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below:

I) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and other price risk, such as raw material and fuel price risk . Financial instruments affected by market risk include FVTPL investments, trade payables, trade receivables, etc.

(a) Foreign currency risk

The company undertakes transactions denominated in different foreign currencies primarily in USD and consequently exposed to exchange rate fluctuations. Exchange Rate exposures are managed within approved policy parameters. The carrying amounts of the company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as disclosed under note no. 2.36 above.

Foreign currency sensitivity

The company is principally exposed to foreign currency risks against USD. Sensitivity of profit or loss arises mainly from USD denominated receivables and payables.

* The above sensitivity do not include foreign currency risk on borrowings amounting to Rs, 617 Lakhs (31st March 2017 - Rs, 640 Lakhs) which are capitalized with the Property, Plant and Equipment and not charged to Statement of Profit and Loss.

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

The company is impacted by the price volatility of certain commodities like raw materials, packing materials and fuel. The Company is impacted by the price volatility of Fuels like Gas, Furnace Oil, etc. To minimize the risk related to fuel price change, the Company uses alternate fuel based on their market prices. The Company swaps and uses alternate fuels based on the cost of energy efficiency and, hence, quantification of sensitivity is not practical. To mitigate the volatility in market price of major raw materials, the company has entered into fixed price contract.

II) Credit risks

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade receivables

Credit quality of a customer is assessed based on an appraisal of customer creation form and individual credit limits are defined in accordance with this assessment and performance of the customer. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for all the customers. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 2.7. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several geographical locations.

III) Liquidity Risk

The Company''s objective is to at all times maintain optimum level of liquidity to meet its cash and collateral requirement at all times. The need of the funds of the company are being met by internal accrual and borrowings. The short and medium term requirements are met through the committed lines of credit.

7. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value. The Company manages its capital structure and makes adjustments in line with changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares or sale assets to reduce debt. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The company includes within net debt, interest bearing long term loans and borrowings less cash and cash equivalents.

The capital structure of the Company consists of Rs, 14664.98 Lakhs (Refer Note No. 2.13 & 2.14). The company is not subject to any externally imposed capital requirements.

8. GEARING RATIO

The Company has long term Debt of Rs, 1,93,277.17 Lakhs as on 31st March 2018 (31st March 2017 : 2,03,944.10 Lakhs). Accordingly the Company has 0.93 gearing ratio as at 31st March 2018 and 0.83 gearing ratio as at 31st March 2017.

9. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

10. These financial statements have been approved by the Board of Directors of the Company on 16th May 2018 for issue to the _| shareholders for their adoption.

Mar 31, 2017

2.1.A.2 Refer Note 2.15.6 and 2.20.1 to Financial Statements in respect of charges created.

CTfACT The company has considered the net carrying value of Property, Plant and Equipment as on the date of transition as deemed

_I cost under Ind AS 101 "First-Time Adoption of Indian Accounting Standards" except Freehold Land and Lease hold Land which

have been fair valued as on 1 April 2015 and have been considered as deemed cost under Ind AS. (Refer note 2.51.A & 2.52).

nrfAn The Company, being a first-time adopter has opted to use the exemption under Ind AS 101 First Time Adoption of

_I Indian Accounting Standards and has continued the policy adopted for accounting for exchange differences arising

from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP i.e. 31st March 2016. The Company has capitalised/decapitalised exchange loss/gain respectively arising on long-term foreign currency loan. Accordingly, exchange gain amounting to '' 1146.30 Lakhs (31st March 2016 - exchange loss '' 2405.00 Lakhs; 1st April 2015 - exchange loss '' 1771.25 Lakhs) has been adjusted to the cost of Plant and Equipments. The unamortised amount as on 31st March 2017 '' 5612.75 Lakhs (31st March 2016 : '' 7694.02 Lakhs ; 1st April 2015 : '' 5971.64 Lakhs).

rami The company has considered the net carrying value of intangible assets as on the date of transition as deemed cost under -Ind AS 101 "First-Time Adoption of Indian Accounting Standards".

2.6.1 Inventories of Stores and Spare Parts include certain slow moving, non-moving and obsolete items. An impairment allowance of '' 788.05 Lakhs (31st March 2016 - '' 746.05 Lakhs ; 1st April 2015 - '' 741.10 Lakhs) towards obsolescence for such slow moving, non-moving and obsolete items is carried in the books and the management is of the opinion that the same is adequate and no further impairment is required there against.

2.6.2 Includes Scrap Inventory (burnt Refractories) amounting to '' NIL Lakhs (31st March 2016 - '' 25.76 Lakhs ; 1st April 2015 -'' 25.76 Lakhs) which is intended for sale.

2.6.3 Inventories includes items lying with third parties.

2.6.4 Refer Note 2.15.6 and 2.20.1 to Financial Statements in respect of charge created.

2.7.1 The accounts of some of the customers are pending reconciliation / confirmation.

2.7.2 There are no customers who represent more than 10% of the total balance of trade receivables as at the end of the reporting period.

2.7.5 Credit quality of a customer is assessed based on an appraisal of customer creation form and individual credit limits are defined in accordance with this assessment and performance of the customer. Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date on an individual basis for all the customers. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several geographical locations.

2.8.A.1 Deposit with Banks are pledged with the Government Authorities.

2.8.A.2 Balance with banks on unpaid dividend account represents monies that can be utilised only to pay dividend to equity shareholders against dividend warrants issued to them.

2.12.1 Includes '' 19.59 Lakhs (31st March 2016 - '' 19.12 Lakhs ; 1st April 2015 - '' 23.21 Lakhs) deposited against demand raised by the Sales Tax Authority.

2.12.2 State incentive includes:

(a) '' 87.10 Lakhs (31st March 2016 - '' 110.39 Lakhs ; 1st April 2015 - '' 80.48 Lakhs) for Input VAT Credit - Deferred, which can be utilised only after repayment of corresponding amount of Sales Tax Deferred Loan.

(b) '' 478.96 Lakhs (31st March 2016 - '' 1155.77 Lakhs; 1st April 2015 - '' 676.80 Lakhs) as Industrial Promotion Assistance.

2.12.3 Represents Plant and Equipment, etc. held for sale and is valued at lower of net book value or estimated net realisable value.

2.13.1 The Company has only one class of Equity shares having a par value of '' 2 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after discharge of all liabilities, in proportion of their shareholding.

2.13.2 There is no change in the number of shares outstanding at the beginning and at the end of the reporting periods.

2.13.3 Details of the Share holders holding more than 5% shares along with number of shares held:

In terms of Scheme of Arrangement pursuant to the Order of Hon''ble High Court, Calcutta dated April 7, 2008 and by the Hon''ble High Court, Delhi dated March 19, 2008 (the Scheme) sanctioning the amalgamation of Ace Glass Containers Limited (AGCL) with the Company, 13,68,872 and 21,41,448 equity shares of '' 10/- each of the Company issued in lieu of the shares of the Company held by AGCL and shares of AGCL held by the Company were transferred to ACE Trust and HNG Trust respectively in earlier years for the sole benefit of the Company. Out of the shares so transferred 68,44,360 and 77,97,240 equity shares of '' 2/- each of the Company (after subdivision of 1 equity share of '' 10/- each into 5 equity shares of '' 2/- each w.e.f. 13/11/2009) are held by ACE Trust and HNG Trust respectively as on 31st March 2017. In view of the shares being held for the sole benefit of the Company as mentioned above, the book value of '' 6,014.85 Lakhs of these investments has been shown as deduction from Share Holders Fund and thereby General Reserve is adjusted to that extent. Receipt from the Trusts on account of beneficial interest is credited to Capital reserve.

2.14.2 Securities Premium Reserve represents the amount received in excess of par value of securities. Section 52 of Companies Act, 2013 specify restriction and utilisation of security premium.

2.14.3 Debenture Redemption Reserve represents the statutory reserve for non-convertible debentures issued by the Company. The company is required to create a debenture redemption reserve out of the profits available for payment of dividend in terms of Section 71 of the Companies Act, 2013 which is equal to 25% of the face value of the debentures issued and outstanding. The reserve will be released on redemption of the debentures.

2.14.4 The General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General Reserve is created by a transfer from one component of equity to another and it will not be reclassified subsequently to Statement of Profit and Loss.

2.14.5 Retained Earnings generally represent the undistributed profits/amount of accumulated earnings of the Company. It includes '' 31,138.35 Lakhs (31st March 2016 - '' 31,223.06 Lakhs; 1st April 2015 - '' 31,316.39 Lakhs) which is not available for distribution as dividend represented by change in carrying amount of Freehold and Leasehold Land upon measurement of Fair Value for deemed cost on the date of transition (Refer Note No. 2.51.A.1) and revaluation reserve as on the date of the transition. Additional Depreciation due to Fair Value Measurement to the extent provided each year becomes available for distribution as dividend.

2.14.6 Other Comprehensive Income (OCI) represent the balance in equity relating to remeasurement gains/(losses) on defined benefit obligations. This will not be reclassified to Statement of Profit and Loss.

2.15.6 Nature of Security for Borrowings:

A) Non-Convertible Debentures are secured by first charge ranking pari-passu on all immovable properties by way of equitable mortgage and hypothecation of all movable properties both present and future of the Company.

B) Vehicle Loans are secured against vehicles hypothecated against them.

C) Term loans from Banks and Financial Institution other than a loan of '' 7500 Lakhs from a Bank (Refer note - 2.15.6(D) below), are secured by first charge ranking pari-passu on all immovable properties by way of equitable mortgage and hypothecation of all movable properties both present and future of the Company and second charge ranking pari-passu on entire current assets of the Company, both present and future, save and except vehicles acquired under vehicle finance loan which are exclusively hypothecated in favour of respective lenders.

D) Term Loan from Other represent Loan from a Body Corporate. The said Loan and a loan of '' 7500 Lakhs from a Bank (Refer Note - 2.15.6(C) above) are secured by second charge ranking pari-passu on all immovable properties by way of equitable mortgage and hypothecation of all movable properties both present and future of the Company.

E) Pledge of treasury shares of the Company held by HNG Trust and ACE Trust.

F) Additional Security to lenders who have agreed to Corrective Action Plan (CAP) :

(i) Pledge of 51% of the Company''s Shareholding held by Promoter and Promoter Group on pari passu basis with other lenders.

(ii) Personal Guarantee of Mr Sanjay Somany and Mr Mukul Somany.

2.15.7 (a) Pursuant to RBI guidelines for Framework for Revitalizing Distressed Assets in the Economy, which laid out the detailed

guidelines on formation of Joint Lenders Forum (JLF) and Corrective Action Plan (CAP), if 75% of lenders by value and 60% by number are agreeable to CAP, then it shall become binding on all the lenders.

In terms of the CAP approved by JLF, the terms and conditions of the outstanding term loans from Banks and Financial Institutions have been restructured with effect from 1st December, 2014. This inter-alia includes moratorium for repayment of principal for two years and thereafter the aforesaid loans to be repaid over the period of 5 to 8 years depending on the nature of the loan. The said restructuring is, however subject to fulfillment of certain conditions and creation of securities etc. including those given in Note 2.15.8, which are being complied with.

Lenders of the Company (comprising of 93% in number and values) except The Hongkong and Shanghai Banking Corporation (HSBC) have agreed to the CAP and have decided to provide the required assistance to the Company. HSBC has not agreed to the terms and conditions of the CAP and has recalled their entire facilities (including working capital facilities). HSBC had filed a suit before the Hon''ble High Court at Calcutta and has also intiated recovery proceedings at Debt Recovery Tribunal (DRT). The DRT vide its order dated 24th February 2017 has stated that original application filed by HSBC is premature and is liable to be dismissed for the reasons mentioned in the order.Subsequent to the order, HSBC vide its letter dated 05th April 2017 has informed to the company that it had assigned all the rights, title and interest in financial assistance granted by them to the company in favour of Edelweiss Asset Reconstruction Company Limited ("EARC"), acting in its capacity as trustee of EARC Trust - SC 245 vide assignment agreement executed in favour of EARC on 22nd March 2017.The amount of term loan recalled by HSBC on 7th January 2015 and outstanding as on Balance sheet date amounting to '' 17,113.15 Lakhs have continued to be classified as per terms and conditions of CAP.

(b) All the loans restructured as above, in addition to their existing securities, have been further secured by pledge of remaining unencumbered promoter shareholding (being 51% of the Company''s shareholding) and Personal guarantee of Mr. Sanjay Somany and Mr. Mukul Somany.

2.15.8 Unsecured Loan from Related parties represents amount brought in by the Promoter''s pursuant to the CAP as mentioned in 2.15.7 above. As agreed with the lenders, the loan amount is proposed to be converted as equity/preference shares in terms of CAP within a period of 18 months from the date of infusion of funds. The unsecured loan carries interest @ 9% p.a upto 31st December 2016 and is interest free with effect from 1st January 2017.

2.15.9 Pursuant to the CAP, lenders shall have a right to convert into Equity upto 20% of the Term Loan outstanding beyond seven years as per SEBI guidelines/ Loan covenants whichever is applicable.

2.18.2 Carry forward unabsorbed depreciation has been considered to the extent of deferred tax liability. As a matter of prudence, the remaining amount of unabsorbed depreciation resulting in deferred tax asset has been ignored.

2.18.3 Since Company is into losses and unrecognised unused tax losses and unused tax credits and there is no tax expense, therefore the reconciliation of tax expense has not been provided.

2.18.4 Items of Deferred Tax Assets and Liabilities above have been recognised in Statement of Profit and Loss.

2.20.1 Working Capital Facilities (Fund Based and Non Fund Based and acceptances as referred to in note no. 2.21.1 below) from banks are secured by -

A) Pari passu first charge hypothecation of entire current assets of the Company, both present and future and pari passu second charge on entire Property, Plant and Equipment of the company in favour of consortium bankers led by State Bank of India.

B) Additional Security to lenders who have agreed to CAP:

(i) Pledge of 51% of the Company''s Shareholding held by Promoter and Promoter Group on pari passu basis with other lenders.

(ii) Personal Guarantee of Mr Sanjay Somany and Mr Mukul Somany.

2.21.3 Trade payables are non-interest bearing and are normally settled on 60 to 90 day terms.

2.22.1 Refer Note no. 2.15.6 for Securities against the borrowings.

2.22.2 There is no due for payment to Investor Education and Protection Fund.

2.22.3 Derivatives not designated as hedging instruments: The Company uses foreign exchange derivative contracts - forward to manage some of its transaction exposures related to foreign currency denominated borrowings. The foreign exchange forward contracts are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally from one to six months.

* The Hon''ble Supreme Court vide its order dated 11th November, 2016 has upheld the constitutional validity of levy of Entry Tax. This is being given effect to by the various state governments subject to follow up decisions before various judicial forums and appropriate authorities and the amount of said levy is yet to be determined. Pending outcome and final decision, no provision has been made for interest liability and has been shown as contingent liability to the extent determinable.

** In respect of certain units, in terms of the Long Term Gas Supply Agreement with GAIL (India) Limited (referred to as the seller), there are under drawn quantities of Re-liquified Natural Gas (RLNG) for the contract year 2015 and for the first quarter of contract year 2016. The Company has signed a "Side Letter" dated 18th January,2016 with the Seller and whereas the Seller has agreed that the AACQ for the contract year 2015 shall be treated as downward flexibility of the Annual Contract Quantity for the contract year 2015. Further the Company has also entered into an agreement with the Seller and RLNG @ 23000 SCM/day has been transferred to another unit at Bahadurgarh with effect from 19th October, 2015. The Seller has preferred not to raise any demand on the Company for the contract year 2015. Further the Company has made the provision for the under drawn quantities equal to 12000 SCM/day for the period from 1st January 2016 to 31st March,2016 on the same basis as the Company has settled the liability for under drawn quantity for the contract year 2014.

2.34.A.1 The Company''s pending litigation comprises of claims against the Company and proceeding pending with tax/statutory/ government authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, and disclosed the contingent liabilities, where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of item no. (1) to (10) as mentioned above are determinable only on receipt of judgement/decisions pending with various forums/authorities.

2.35J CAPITALISATION OF EXPENDITURE

The company had capitalised the following expenses of revenue nature incurred for construction of Property, Plant and Equipment and trial run, to the cost of Property, Plant and Equipment/Capital Work-in-Progress (CWIP). Consequently, expenses/revenue disclosed under the respective notes are net of amounts capitalised by the company.

* Represents '' Nil (31st March 2016- '' 0.00113 Lakhs ;1st April 2015 - '' 0.00197 Lakhs)

2.38J RELATED PARTY DISCLOSURES

I Names of the related parties and nature of relationship A) Subsidiary Company

HNG Global GmbH (ceases to be subsidiary with effect from 1st April 2016) (Refer Note no. 2.2.7)

B) Joint Venture Company

HNG Float Glass Limited (Refer Note 2.2.7)

C) Key Managerial Personnels and their relatives.

(i) Shri Chandra Kumar Somany - Chairman and Non Executive Director (Relative of Key Managerial Personnel)

(ii) Shri Sanjay Somany - Vice Chairman and Managing Director and Key Managerial Personnel

(iii) Shri Mukul Somany - Vice Chairman and Managing Director and Key Managerial Personnel

(iv) Shri Rakesh Kumar Sharma - Executive Director and Key Managerial Personnel (Upto 28th February 2017)

(v) Shri Sujit Bhattacharya - Independent Director

(vi) Shri Ratna Kumar Daga - Independent Director

(vii) Shri Dipankar Chatterji - Independent Director

(viii) Smt. Rita Bhimani - Independent Director

(ix) Shri Bharat Somany - Relative of the Director

D) Enterprises over which any person described in [C (i) to (ix)] above is able to exercise significant influence and with whom the Company has transactions during the year.

AMCL Machinery Limited Brabourne Commerce Private Limited Khazana Marketing Private Limited Mould Equipment Limited Rungamattee Trexim Private Limited Saurav Contractors Private Limited Spotlight Vanijya Limited Spotme Tracon Private Limited

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. The Company has provided corporate Guarantees to related parties, as disclosed above, towards their borrowing facilities (refer note 2.34.A.2) and no amount/income is being received by the Company in this regard. For the year ended 31st March 2017, the Company has not recorded any impairment allowances in respect of receivables relating to amounts owed by related parties (31st March 2016: Nil, 1st April 2015: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

2.39J LEASES

The company has taken certain land on Finance Lease. Carrying Value of Land taken on Lease is '' 5121.69 Lakhs (31st March 2016 - 5153.53 Lakhs; 1st April 2015 - 5185.37 Lakhs).

The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Blocks of Buildings and Vehicles. The lease term is 75 years (Rishikesh and Head Office) and 95 years (In case of Sinnar) for Building. The lease term is 3-5 years for Vehicles, after which the legal title will pass to the Company. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum lease payments payable in future at the balance sheet date and their present value are as under:

Assets taken under Operating Leases:

Office equipments and system storage and support are obtained on operating lease. There is no contingent rent in the lease agreements. The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease agreements. There are no sub-lease and all the leases are cancelable in nature. The aggregate lease rentals are charged as "Rent" in Note ''2.30'' of the financial statement.

I The Company is incurring losses since the Financial Year 2012-2013 which at the year-ended 31st March 2017 has resulted in erosion of net-worth. Due to prevailing market conditions and resultant adverse financial performance, the lenders had decided to restructure the term loans and stipulations thereof which among other things include moratorium in repayment of installments and infusion of equity by Promoters and disposal of Investment in its Subsidiary have largely been implemented and ameliorative measures are being pursued actively. In view of the above, considering the expected improvement in the performance of the Company over a period of time and asset coverage etc., the accounts of the Company has been continued to be prepared on a going concern basis.

The Hon''ble Supreme Court vide its order dated 11th November, 2016 has upheld the constitutional validity of levy of Entry Tax. This is being given effect to by the various state governments subject to follow up decisions before various judicial forums and appropriate authorities and the amount of said levy is yet to be determined. Accordingly, the same has not been recognised by the company. In the event of the levy being held sustainable, amount on overall basis in this respect has been estimated to be '' 2026 Lakhs (excluding amount of interest if any there against) and the same will be given effect to on determination thereof.

2.44 J GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with the insurance companies.

As per Ind AS "Employee Benefits" (Ind AS - 19), the disclosures of Employee Benefits as defined in the Standard are given below:

The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the quarter ended 31st December 2011. The actuary has accordingly provided a valuation and based on the below provided assumptions there is no shortfall as at 31st March 2017; 31st March 2016; 1st April 2015.

The Company contributed '' NIL towards provident fund during the year ended 31st March 2017 ('' NIL during the year ended 31st March 2016).

b) Defined Benefit Plan

The employees'' gratuity fund scheme managed by Insurers is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age.

V. Compensated Absences

The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the company as at 31st March, 2017 is '' 440.59 Lakhs (31st March, 2016 is '' 384.70 Lakhs, 1st April, 2015 - '' 469.60 Lakhs).

VI. In respect of Gratuity (funded), the funds are managed by the Insurers. Accordingly, the percentage or amount that each major category constitutes the Fair value of total plan assets and effect thereof on overall expected rate of return on asset have not been disclosed.

The contributions expected to be made by the Company for the year 2017-18 is yet to be determined.

(iii) Fair Value Technique

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid

to transfer a liability in an orderly transaction between participants at the measurement date. The following methods and

assumptions were used to estimate the fair values:

a) The fair value of cash and cash equivalents, trade receivables, trade payables, current financial liabilities and borrowings approximate their carrying amount largely due to the short-term nature of these instruments. The board considers that the carrying amounts of financial assets and financial liabilities recognised at cost/amortised costs in the financial statements approximates their fair values.

b) Fair Value of Long term debt approximates their carrying value subject to adjustments made for transaction cost.

c) Investments in liquid and short- term mutual funds are measured using quoted market prices at the reporting date multiplied by the quantity held.

d) Fair Value for valuation of unquoted equity instruments is arrived based on the valuation done by an independent valuer.

e) During the year ended 31st March 2017 and 31st March 2016, there were no transfer between different levels of fair value measurement.

2.47J FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

(a) Foreign currency risk

Foreign currency sensitivity

The company is principally exposed to foreign currency risks against USD. Sensitivity of profit or loss arises mainly from USD denominated receivables and payables.

As per management assessment of reasonable possible changes in the exchange rate of /- 5% between USD-INR currency pair, sensitivity of profit or loss only on outstanding foreign currency denominated monetary items at the period end is presented below:

* The above sensitivity do not include foreign currency risk on borrowings amounting to '' 640 Lakhs (31st March 2016 - '' 650 Lakhs) which are capitalised with the Property, Plant and Equipment and not charged to Statement of Profit and Loss.

(b) Interest rate risk

Trade receivables

III) Liquidity Risk

The table provides undiscounted cash flow towards non-derivative financial liability and net settled derivative financial liabilities into relevant maturities based on the remaining period at balance sheet date to contractual maturity date.

2.48 J CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value. The Company manages its capital structure and makes adjustments in line with changes in economic conditions.To maintain or adjust the capital structure, the Company may

adjust the dividend payment to shareholders, return capital to shareholders or issue new shares or sale assets to reduce debt. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The company includes within net debt, interest bearing long term loans and borrowings less cash and cash equivalents The capital structure of the Company consists of '' 39,477.98 Lakhs (Refer Note No. 2.13 & 2.14). The company is not subject to any externally imposed capital requirements.

2.49J GEARING RATIO

The Company has long term Debt of '' 2,03,944.10 Lakhs as on 31st March 2017 (31st March 2016 : 2,10,350.71 Lakhs, 1st April 2015: 2,02,794.46 Lakhs). Accordingly the Company has 0.83 gearing ratio as at 31st March 2017 and 0.80 gearing ratio as at 31st March 2016 and 0.74 gearing ratio as on 1st April 2015. _{? in} ._a|,h_s

2.50j SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgements

2.50.A Fair Value as Deemed Cost for Property Plant and Equipment:

The company has opted to Fair Value Property, Plant and Equipment as carried out by external valuer and thereby Fair Valuation of Freehold and Leasehold Land been considered to be deemed cost as on the transition date. Such Fair Valuations involves higher degree of uncertainty and subjectivity.

2.50.B Depreciation/Amortisation of and impairment loss on Property Plant and Equipment/Intangible Assets:

Property, Plant and Equipment are depreciated and Intangible assets are amortised on straight line basis over the estimated useful lives (or Lease Term if shorter) in accordance with Schedule II of the Companies Act 2013, taking into account the estimated residual value, wherever applicable. The company reviews the estimated useful lives of the assets regularly in order to determine the amount of depreciation/ amortisation expense to be recorded during any reporting period. This reassessment may result in change in depreciation expense in future periods. The company reviews its carrying value of its Tangible and Intangible assets whenever there is objective evidence that the assets are impaired. The required level of impairment losses to be made is estimated by reference to the estimated value in use or recoverable amount.

2.50.C Impairment loss on Trade receivables:

The company evaluated whether there is any objective evidence that trade recievables are impaired and determines the amount of impairment loss as a result of the inability of the debtors to make required payments. The company bases the estimates on the ageing of the trade receivables balance, creditworthiness of the trade receivables and historical writeoff experiance. If the financial conditions of the trade receivables were to deteriorate, actual writeoffs would be higher than estimated.

2.50.D Deferred tax assets on unused tax losses:

Tax credit and Minimum Alternate Tax (MAT) Credit are recognised to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets/MAT Credit that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. The Company has decided not to recognize deferred tax asset on such unused tax losses nor any MAT credit entitlement.

2.50.E Liability towards decommissioning cost for Nashik and Neemrana land lease has not recognized based on management''s decision that the Company will leave the leased property in as is condition at the expiry of the term of lease. As per the terms of the agreement, in such case the Company is not obligated for any decommisioning or site restoration activity.

2.50.F As per CAP agreed with Joint lender forum, rate of interest for different loans taken by the Company shall be 10.5%p.a. in the financial year ended 31st March 2016 and 31st March 2017 and 11% p.a thereafter and the same has been considered for computing the EIR.

2.50.G The company along with other promoters of the company had entered into a joint venture agreement with Trakya Cam Sanayii AS of Turkey in HNG Float Glass Ltd. By virtue of the terms of the agreement, the company is required to be the shareholder of HNG Float Glass Ltd.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using various valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Explanatory Notes to Balance Sheet Reconciliation as at April 1, 2015

2.51.A.1 Property, Plant and Equipment

(i) Under previous GAAP, the Company has capitalised the processing fees of '' 1379.93 lakhs charged by the lenders against loans taken for Project/Property, Plant and Equipment. As a consequence of the adjustment in 2.51.A.4 below with respect to effective interest rate (EIR) adjustments,i.e. to restate the carrying amount of loan in accordance with paragraph 10 of Ind AS 101 "First- Time Adoption of Indian Accounting Standards", the carrying amount of Property, Plant and Equipment as at the date of the transition has also been reduced by '' 1173.62 lakhs which is the value of processing fees (net of cumulative depreciation impact till the date of transition) capitalised.

(ii) As per para 8 of Ind AS 16 "Property, Plant and Equipment" certain items categorised as spares meet the definition of Property, Plant and Equipment are capitalised, otherwise such items are classified as inventories of stores and spares. As a consequence of above, sum of '' 588.84 Lakhs lying under Capital Work in Progress/ Inventories has been capitalised with Property, Plant and Equipment at the date of transition and corresponding credit of '' 51.95 lakhs and '' 536.89 Lakhs to Capital Work in Progress and inventory of Stores and Spares respectively.

(iii) The company has elected to measure all its Property, Plant and Equipment as per the provisions of Ind AS 101 "First Time Adoption of Indian Accounting Standard" at the previous GAAP carrying amount as on the date of transition i.e. 1st April 2015; as its "Deemed Costs" except in case of Freehold Land and Leasehold Land where fair values as valued by an independent valuer has been considered as "Deemed Costs". Refer Note. 2.52 The details regarding the fair value of Land as above are as follows:

1. The fair Value of Freehold Land and Leasehold Land is '' 34,713.42 Lakhs and '' 5,185.37 Lakhs respectively; and

2. The aggregate adjustment to the carrying amount of Freehold Land and Leasehold Land reported under previous GAAP is '' 19,860.05 Lakhs and '' 2639.95 Lakhs.

The fair value above has been determined based on the valuation carried out by external independent valuers. These were determined based on market value of similar assets, significantly adjusted for differences in the nature, location or condition of the specific items of Property, Plant and Equipment. The fair valuation involves higher degree of uncertainty and subjectivity.

2.51.A.2 Derivative instruments

The fair value of derivative instruments is recognised under Ind AS.

2.51.A.3 Deferred Tax Assets

In terms of Ind AS 12 "Income Taxes" deferred tax includes Minumum Alternate Tax (MAT). Deferred tax assets on unused tax losses; tax credit and Minimum Alternate Tax (MAT) Credit are recognised to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Based on the same the Company has decided not to recognize deferred tax asset on such unused tax losses/MAT credit entitlement. Accordingly, MAT credit entitlement has been adjusted.

2.51.A.4 Non Current Borrowings

Under previous GAAP, the Company accounted for borrowings measured at transaction value. Under Ind AS, the Company has to recognise the borrowings at amortised cost using effective interest.

Previous GAAP figures have been reclassified to conform with Ind AS presentation requirement for the purpose of these notes.

Explanatory Notes to Balance Sheet Reconciliation as at 31st March 2016

2.51.B.1 Property, Plant and Equipment

(i) Under previous GAAP, the Company has capitalised the processing fees of loans. As a consequence of the adjustment in 2.51.B.4 below, to restate the carrying amount of loan in accordance with paragraph 10 of Ind AS 101 "First-Time adoption of Indian Accounting Standard", the carrying amount of property, plant and equipment as at the date of the transition has also been reduced by the amount of processing cost (net of cumulative depreciation impact).

(ii) As per para 8 of Ind AS 16 "Property, Plant and Equipment" certain items categorised as spares meet the definition of property, plant and equipment are capitalised, otherwise such items are classified as inventories of stores and spares.

2.51.B.2 Derivative instruments

The fair value of derivative instruments is recognised under Ind AS.

2.51.B.3 Deferred Tax Assets

Deferred tax assets on unused tax losses; tax credit and Minimum Alternate Tax (MAT) Credit are recognised to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Based on the same the Company has decided not to recognize deferred tax asset on such unused tax losses/MAT credit entitlement. Accordingly, MAT credit entitlement has been adjusted.

2.51.B.4 Non Current Borrowings

Under previous GAAP, the Company accounted for borrowings measured at transaction value. Under Ind AS, the Company has to recognise the borrowings at amortised cost using effective interest.

Explanatory Notes to Statement of Profit and Loss Reconciliation for the year 2015-16

2.51.D.1 Under previous GAAP Sales was shown net of Excise Duty but under Ind AS Sales is shown at Gross Value and consequently excise duty has been shown as a part of expense.

2.51.D.2 Gain or Loss on Acturial assumption under Ind AS 19 "Employee Benefits" is separately shown under Other Comprehensive Income (OCI), whereas under previous GAAP it was net off with Employee Benefit Expenses.

2.51.D.3 The fair value of derivative instruments is recognised under Ind AS.

2.51.D.4 The Processing fees on Loan was decapitalised on transition to Ind AS and insurance spares were capitalised. Hence, relevant depreciation has been adjusted.

2.51.D.5 Under previous GAAP, the Company accounted for long term borrowings measured at transaction value. Under Ind AS, the Company has to recognise the long term borrowings at amortised cost using effective interest.

2.51.D.6 In terms of Ind AS 12 "Income Taxes" deferred tax includes Minumum Alternate Tax (MAT). Deferred tax assets on unused tax losses; tax credit and Minimum Alternate Tax (MAT) Credit are recognised to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Based on the same the Company has decided not to recognize deferred tax asset on such unused tax losses / MAT credit entitlement. Accordingly, MAT credit entitlement has been adjusted. The Company charged off '' 772.57 Lakhs under Ind AS but entire balance of MAT Credit as on 01.04.2015 was written off against Retained Earnings, hence, reversal done.

2.51.F Reconciliation of Statement of Cash Flow for the year ended 31st March 2016

There were no material differences between the Statement of Cash Flow presented under Ind AS and the previous GAAP.

2.52_| FIRST-TIME ADOPTION OF Ind AS- Exceptions and Exemptions

- These financial statements, for the year ended 31st March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31st March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31st March 2017, together with the comparative period data as at and for the year ended 31st March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1st April 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2015 and the financial statements as at and for the year ended 31st March 2016.

- Ind AS 103 Business Combinations has not been applied to acquisitions of companies, which are considered businesses under Ind AS that occurred before 1st April 2015. Use of this exemption means that the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognised under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with respective Ind AS. The Company recognises all assets acquired and liabilities assumed in a past business combination, except (i) certain financial assets and liabilities that were derecognised and that fall under the derecognition exception, and (ii) assets and liabilities that were not recognised in the acquirerâs consolidated balance sheet under its previous GAAP and that would not qualify for recognition under Ind AS in the individual balance sheet of the acquiree. Assets and liabilities that do not qualify for recognition under Ind AS are excluded from the opening Ind AS balance sheet. The Company did not recognise or exclude any previously recognised amounts as a result of Ind AS recognition requirements.

- The company has opted to Fair Value Property, Plant and Equipment and thereby Fair Valuation of Freehold and Leasehold Land been considered to be deemed cost as on the transition date. Other items of Property, Plant and Equipment has been taken at carrying value on that date. Differential arising with respect to value as per previous GAAP has been credited to retained earnings.

- As per para 8 of Ind AS 16 certain items categorised as spares meet the definition of property, plant and equipment are capitalised, otherwise such items are classified as inventories of stores and spares.

- The Company has designated unquoted equity instruments/ investment in mutual fund held at 1st April 2015 as fair value through profit or loss.

- In separate financial statements, a first-time adopter that subsequently measures an investment in a subsidiary, joint ventures or associate at cost, may measure such investment at cost (determined in accordance with Ind AS 27 "Separate Financial Statements") or deemed cost (fair value or previous GAAP carrying amount) in its separate opening Ind AS balance sheet. The Company has opted for valuing these investments at cost.

- The Company, being a first-time adopter, has applied the requirements in Ind AS 109, Financial Instruments, and Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance, prospectively to government loans existing at the date of transition to Ind AS and has not recognised the corresponding benefit of the government loan at a below-market rate of interest as a government grant.

- The Company, being a first-time adopter, has continued the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP i.e. 31st March 2016.

These financial statements have been approved by the Board of Directors of the Company on 15th May, 2017 for issue to the

shareholders for their adoption.

Mar 31, 2016

1 Unsecured Loan from Related parties represents amount brought in by the Promoter''s pursuant to the CAP as mentioned in 2.3.7 above. As agreed with the lenders, the loan amount is proposed to be converted as equity/preference shares in terms of CAP within a period of 18 months from the date of infusion of funds. The unsecured loan carries interest @9% p.a.

2. This is not due for payment to Investor Education and Protection Fund.

3 Refer Note 2.3.6 and 2.7.1 to Financial Statements in respect of charges created

4 In accordance with the amendment to AS 11, the company has capitalized/recapitalized exchange loss/gain respectively arising on long-term foreign currency loan, amounting to Rs. 2405.00 Lakhs (Previous Year: Rs. 1771.25 Lakhs) to the cost of Plant & Equipments.

5 Depreciation amounting to Rs. 93.33 Lakhs (Previous year Rs. 108.46 Lakhs) pertains to additional depreciation due to revaluation of certain plants and equipment and building on the dates as mentioned in note 2.11.2(a) & (b) above has been transferred to general reserve in this year.

6 Ministry of Corporate Affairs vide notification dated August 29,2014 has amended Schedule II to the Companies Act,2013 requiring mandatory componentization of fixed assets for financial statements in respect of financial year commencing on and after April 1, 2015. Accordingly, the Company, in terms of Schedule II of the Companies Act, 2013, based on technical evaluation has identified and determined cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset. These components based on technical evaluation are depreciated separately over their useful lives; the remaining components are depreciated over the useful life of the principal asset.

Consequent upon the application of Schedule II of the Companies Act, 2013 as above, depreciation for the year is lower by Rs. 6551.04 Lakhs. Where the remaining useful life of the component is Nil, as on April 1, 2015, the carrying amount of Rs. 1939.10 Lakhs after retaining the residual value has been fully depreciated and charged to statement of Profit and Loss. Accordingly, depreciation for the year is lower by Rs. 4611.94 Lakhs, Loss for the year is lower by Rs. 4611.94 Lakhs and Net Block of Fixed assets is higher by Rs. 4611.94 Lakhs.

7. Investment held by the company in HNG Global GmbH are pledged in the favour of the term lender of HNG Global GmbH in respect of its borrowing facility.

8. Particulars of Investment as required in terms of Sec 186(4) of the Companies Act, 2013, have been disclosed under note no. 2.12 above.

9. In the view of management, the company is expected to pay normal tax within the credit entitlement period based on the future projections and thereby no further adjustment in this respect has been considered necessary.

10. State incentive includes :

(a) Rs. 103.80 Lakhs (Previous year : Rs. 215.70 Lakhs) for Input VAT Credit - Deferred, which can be utilized only after repayment of corresponding amount of Sales Tax Deferred Loan.

(b) Rs. 592.54 lakhs (Previous year : Rs. 951.56 Lakhs) as Industrial Promotion Assistance received.

11. Inventories of Stores and Spare Parts include certain slow moving, non-moving and obsolete items. A provision of Rs.746.05 Lakhs (Previous year Rs.741.10 Lakhs) towards obsolescence for such slow moving, non-moving and obsolete items is carried in the books and the management is of the opinion that the same is adequate and no further provision is required there against.

12. Includes Scrap Inventory (burnt Refractoriness) amounting to Rs. 25.76 Lakhs (Previous year Rs. 25.76 Lakhs ) which is intended for sale.

13. Inventories includes items lying with third parties.

14 The accounts of some of the customers are pending reconciliation / confirmation.

15 Deposit with Banks are pledged with the Government Authorities.

16. Bank deposit with more than 12 months maturity Rs. 2.28 Lakhs (Previous year Rs. 2.21 Lakhs).

17. Includes Rs. 19.12 Lakhs (Previous year Rs. 23.21 Lakhs) deposited against demand raised by the Sales Tax Authority.

18. Includes

(i) Rs.327.10 Lakhs (Previous year - Nil) on account of excess remuneration paid to Vice Chairmen and Managing Directors for financial year 2014-15 (Also refer note- 2.34.II (e)); and

(ii) Insurance Claim Receivable Rs. 45.35 Lakhs (Previous year: Rs. 45.35 Lakhs).

19. State incentive includes:

(a) Rs. 110.39 Lakhs (Previous year: Rs. 80.48 Lakhs) for Input VAT Credit - Deferred, which can be utilised only after repayment of corresponding amount of Sales Tax Deferred Loan.

(b) Rs. 1155.77 Lakhs (Previous year : Rs. 676.80 Lakhs) as Industrial Promotion Assistance received.

20. Includes Industrial Promotion Assistance received under State Incentive Scheme during the period is Rs. 466.80 Lakhs (Previous year: Rs. 1001.26 Lakhs) and export incentives of Rs. 151.84 Lakhs (Previous year : Rs. 102.84 Lakhs).

21. Refer note 2.34.1 for Remuneration paid to Vice Chairmen & Managing Directors

22. Profit or loss on sale of stores has been adjusted in consumption.

23. Electricity duty waiver benefit under State Incentive Schemes credited to Power and Fuel Account is Rs. 659.78 Lakhs (Previous year : Rs.660.59 Lakhs)

* Appeal filed before Tax Board, Rajasthan

** Disputed Entry Tax for the financial year 2007-08 till financial year 2013-14 has been challenged by other bodies corporate and is pending before Hon''ble Supreme Court. Considering the prudence full liability have been provided for i.e. amounting to Rs. 219.79 Lakhs (Previous Year: Rs. 219.79 Lakhs). As per the interim order of Hon''ble High Court, 50% amount have been deposited and shown under noncurrent assets and for remaining 50% amount Bank guarantee have been provided for. In view of final decision, no provision has been made for interest liability and has been shown as contingent liability.

*** In respect of certain Plants, in terms of the Long Term Gas Supply Agreement with GAIL (India) Limited (referred to as the seller), there are under drawn quantities of Re-liquified Natural Gas (RLNG) for the contract year 2015 and for the first quarter of contract year 2016. The Company has signed a "Side Letter" dated January 18, 2016 with the Seller and whereas the Seller has agreed that the AACQ for the contract year 2015 shall be treated as downward flexibility of the Annual Contract Quantity for the contract year 2015. Further the Company has also entered into an agreement with the Seller and RLNG @ 23000SCM/day has been transferred to another Plant at Bahadurgarh with effect from October 19, 2015. The Seller has preferred not to raise any demand on the Company for the contract year 2015. Further the Company has made the provision for the under drawn quantities equal to 12000 SCM/day for the period from January 1, 2016 to March 31, 2016 on the same basis as the Company has settled the liability for under drawn quantity for the contract year 2014.

24. .A.1 The Company''s pending litigation comprises of claims against the Company and proceeding pending with tax/statutory/ government authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, and disclosed the contingent liabilities, where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of item no. (iii) to (xii) as mentioned above are determinable only on receipt of judgment/decisions pending with various forums/authorities.

25. The Board is of the opinion that the assets other than Fixed Assets and Non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

26. SEGMENT INFORMATION

The Company''s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management this is the only reportable segment, as per the Accounting Standard 17 on Segment Reporting.

27. Remuneration paid to Vice Chairmen and Managing Directors amounting to Rs. 641.99 Lakhs for the Financial year ended 2015-16 which due to inadequacy of profit has exceeded the limits prescribed under the provisions of Companies Act, 2013. The Company has made an application before the Central Government and necessary approvals in this respect are awaited.

In respect of Financial year 2013-14 and 2014-15, the company has given effect to the orders of Central Government received during the year. In terms of the said orders, Rs. 311.86 Lakhs and Rs. 327.10 Lakhs being excess remuneration for the Financial year 2013-14 and 2014-15 have been refunded/since been refunded by such managerial personnelâs and adjusted to salaries and wages under employee benefit expenses. Rs. 327.10 Lakhs has been included under short term loans and advances, and has since been received by the Company.

28. DEFERRAL/CAPITALISATION OF EXCHANGE DIFFERENCES

In accordance with the amendment to AS 11, the company has capitalized/recapitalized exchange loss/gain respectively arising on long-term foreign currency loan, amounting to Rs.2405.00 Lakhs (Previous year: Rs. 1771.25 Lakhs) to the cost of Plant & Equipments. The company does not have any other long-term foreign currency monetary item. Hence, the amount of exchange loss deferred in the "Foreign Currency Monetary Item Translation Difference Account" is Rs.NIL (Previous year: Rs. NIL). The unamortized amount as on March 31, 2016 is Rs. 7694.02 Lakhs (Previous year : Rs. 5971.64 Lakhs).

29. Figures for previous year have been regrouped and/or rearranged wherever considered necessary.

Mar 31, 2015

1. Contingent Liabilities and Commitments

a. Contingent Liabilities' (to the extent not provided for) (Rs,in Lakhs)

SI. Particulars ref As at As at No. note no. March 31, 2015 March 31, 2014

(i) Guarantee furnished to bank on behalf of Subsidiaries 2.29.A.2 29,449.50 49,262.31

(ii) Guarantee furnished to banks on behalf of an entity over 2.29.A.2 1,800.00 1,800.00

which directors of the Company has significant influence.

(iii) Sales Tax matter under appeals 3,224.54 1,148.57

(iv) Excise Duty and Octopi demand issued against which the 1,563.70 1,618.32

Company has preferred appeals and which in the opinion of the management are not tenable.

(v) Cases pending with labour courts (to the extent ascertainable) 530.72 599.24

(vi) Other Claims against the Company not acknowledged as debt. 450.36 432.78

(vii) Octroi on Transportation of natural gas through pipeline. 323.77 310.09

(viii) Local Area Development Tax Demand 4,724.52 2,982.37

(ix) Demand of stamp duty against leasehold land purchased 96.10 96.10 from Haryana Sheet Glass Ltd.*

(x) Disputed Entry Tax for the Financial Year 2007-08, 2008-09, 153.04 59.81

2009-10, 2010-11, 2011-12 ,2012-13 and 2013-14 **

(xi) Mathadi Act for 1999-2001 45.48 -

(xii) Maharashtra Tax on the Entry of Goods into Local Areas Act, 1,684.00 - 2002 from 2012-13 to 2014-15

(xiii) Right of Recompense of Lenders as per CAP guidelines. 1,242.00 -

(xiv) Demand from Gas Authority of India limited for under drawn 1,758.00 -

quantity of LNG***

* Appeal fled before Tax Board, Rajasthan

** Disputed Entry Tax for the FY 2007-08 till 2013-14 challenged by other body corporate and pending before H'ble Supreme Court. Considering the prudence full liability have been provided for i.e. amounting to Rs. 219.79 Lakhs. As per the interim order of H.ble High Court, 50% amount have been deposited/ shown under noncurrent assists and for remaining 50% amount Bank guarantee have been provided for. In view of final decision, no provision have been made for interest liability and has been shown as contingent liability.

*** In terms of Long Term Gas supply Agreement (GSA) with GAIL (India) Limited (referred to as 'Seller'), there are under drawn quantities of Re-Liquifed Natural Gas (RLNG) equivalent to Rs. 4600 Lakhs for the contract year 2014. Unit has received demand notice dated February 27, 2015 from Seller aggregating to Rs. 1758 Lakhs only representing an aggregate under drawn quantity of 4.398 MMSCM approximately against Take or Pay deficiency. However, the Unit had disputed the same and fled a writ petition with H'ble High Court of Jaipur and the same is pending for resolution.

The unit has represented to the seller to waive off the demand raised since the plant is closed due to various factors and there is no possibility to use the gas. Unit had also alternatively requested Gail India Limited to transfer the under drawn RLNG to another unit at Bahadurgarh (Haryana) and surrender the connection. Accordingly, pending resolution and in view of proposed use of RLNG in other unit as stated above, no effect of the same has been given in these accounts. Further, management is confident that there will not be any material amount on resolution/ settlement.

2. The Company's pending litigation comprises of claims against the Company and proceeding pending with tax/statutory/ government authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, and disclosed the contingent liabilities, where applicable, in its financial statement. The Company does not expects the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of item no. (iii) to (xiv) as mentioned above are determinable only on receipt of judgment/decisions pending with various forums/ authorities.

3. The Board is of the opinion that the assets other than Fixed Assets and Non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

4.Related Party disclosures

i. names of the related parties and nature of relationship a) subsidiary Companies

Glass Equipment (India) Limited (GEIL) (Merged with HNGIL with effect from April 1, 2014, Refer note no. 2.44)

HNG Global GmbH

Quality Minerals Limited (QML) (Merged with HNGIL with effect from April 1, 2014, Refer note no. 2.44)

B) Joint Venture Company (up to September 30, 2014)

HNG Float Glass Limited (HNGFGL) (Refer Note 2.12.8 &2.12.9)

C) Joint Venture Company (from October 1, 2014)

HNG Float Glass Limited (HNGFGL) (Refer Note 2.12.8 & 2.12.9)

d) Key Managerial Personnels and their relatives.

(i) Shri C. K. Somany - Chairman and Non Executive Director (Relative of Key Managerial Personnel) (ii) Shri Sanjay Somany - Vice Chairman and Managing Director and Key Managerial Personnel (iii) Shri Mukul Somany - Vice Chairman and Managing Director and Key Managerial Personnel (iv) Shri Rakesh Kumar Sharma - Executive Director and Key Managerial Personnel (v) Shri Bharat Somany - Relative of the Director

e) enterprises over which any person described in [d (i) to (v)] above is able to exercise significant influence and with whom the Company has transactions during the year.

AMCL Machinery Limited (AMCL) Brabourne Commerce Private Limited (BCPL) Mould Equipment Limited (MEL) Rungamattee Trexim Private Limited (RTPL) Somany Foam Limited (SFL) Saurav Contractors Private Limited (SCPL) Khazana Marketing Private Limited (KMPL) Spotme Tracon Private Limited (STPL) Spotlight Vanijya Limited (SVL)

5. Remuneration paid to Vice Chairman and Managing Directors amounting to Rs. 641.91 Lakhs for the year and Rs. 302.72 Lakhs (excluding Rs. 399.03 Lakhs for which the central government approval has been received during the year) for year 2013-14, which due to inadequacy of proft exceeded the limits prescribed under the provisions of Companies Act, 2013 and Companies Act, 1956 respectively. The Company has made an application before the Central Government and necessary approvals in this respect are awaited.

6. Leases

The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Blocks of Buildings and Vehicles. The lease term is 75 years (Rishikesh and Head Office) and 95 years (In case of Sinnar) for Building. The lease term is 3 - 5 years for Vehicles, after which the legal title will pass on the Company. The lease has been recognized as an asset at the present value of the minimum lease payments. Minimum lease payments payable in future at the balance sheet date and their present value are as under :

7. deferral/Capitalization of exchange differences

In accordance with the amendment to AS 11, the company has capitalized/recapitalized exchange loss/gain respectively arising on long-term foreign currency loan, amounting to Rs. 1,771.25 Lakhs (Previous year Rs. 3,545.75 Lakhs) to the cost of Plant & Equipments. The company does not have any other long-term foreign currency monetary item. Hence, the amount of exchange loss differed in the "Foreign Currency Monetary Item Translation Difference Account" is Rs. NIL (Previous Year : Rs. NIL). The unamortized amount as on March 31, 2015 is Rs. 5,971.64 lakhs (Previous year : Rs. 5,088.98 lakhs).

The estimates of rate of escalation in salary considered in actuarial valuation taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan assets management.

The contributions expected to be made by the Company for the year 2015-16 is yet to be determined.

8. Pursuant to Scheme of Amalgamation (the scheme)under the provisions of Companies Act 1956, with effect from April 1, 2014 (appointed date), Glass Equipment (India) Limited (GEIL) and Quality Minerals Limited (QML) have been amalgamated with the Company. GEIL is engaged in manufacturing of IS machines and services of IS machines which are used in glass manufacturing industry. QML is engaged in business of cursing of feldspar and supply of same.

The scheme has been sanctioned by the Hon'ble High Court at Calcutta vide its order dated March 31, 2015. The scheme became effective on May 7, 2015.

The amalgamation has been accounted for under "Pooling of Interest Method" as prescribed by the Accounting Standard-14 "Accounting of Amalgamation". Amalgamation has been done in the nature of merger.

In accordance with the scheme of amalgamation :

(i) The Assets and Liabilities of the GEIL and QML have been incorporated in the financial statement of the company at the carrying amount as at March 31, 2014.

(ii) Upon the scheme becoming effective, all the equity shares of GEIL and QML held by the Company have been cancelled.

9. In view of the aforesaid amalgamation, the figure for the previous year are not comparable with figures of the current year.

10. Figures for previous year have been regrouped and/or rearranged wherever considered necessary.

Mar 31, 2014

NOTE 1.1 SHARE APPLICATION MONEY PENDING ALLOTMENT

The Shareholders in its meeting held on December 18, 2012 had approved the proposal of allotment of 110,00,000 equity shares of Rs. 2 each for cash at price ofRs. 200, including a premium ofRs. 198 each aggregating to Rs. 220,00,00,000 to M/s Rungamattee Trexim Private Limited, Spotlight Vanijya Limited and Spotme Tracon Private Limited on a preferential basis. The Company had received share application money of Rs. 1,460.00 Lakhs for 7,30,000 equity shares. Equity Shares were required to be allotted within 15 days from the receipt of all necessary approvals from statutory authorities (stock exchanges wherever Company''s shares are listed, in this case). In view of inordinate delay in receiving such approvals, the Company has refunded the application money so received during the year.

1.1.2 Term loans from Banks and Financial Institutions are secured by first charge ranking pari-passu on all immovable properties by way of equitable mortgage and hypothecation of all moveable properties both present and future of the Company and second charge ranking pari-passu on entire current assets of the Company, both present and future, save and except specific assets exclusively hypothecated in favour of respective lenders. Vehicle Finance Loans are secured against vehicles obtained under finance lease arrangements.

1.1.3 Timing difference with respect to depreciation differential has been considered to the extent of deferred tax liability. As a matter of prudence, the remaining amount of the differential resulting in deferred tax asset has been ignored.

1.1.4 Working Capital Facilities (Fund Based and Non-Fund Based and acceptances as referred to in Note no. 2.8.1 below) from banks are secured by hypothecation of entire current assets of the company, both present and future and second charge on entire fixed assets of the company in favour of consortium bankers led by State Bank of India

1.1.5 This is not due for payment to Investor Education and Protection Fund

1.1.6 Represents advance received in respect of Sale Deed executed for Land at Outram Street.

2.12.2 Investment held by the Company in HNG Global GmbH are pledged in the favour of the term lender for HNG Global GmbH in respect of its borrowing facility.

2.12.3 During the year, the Company, along with the promoters of HNG Float Glass Limited (HNGFL) (HNG Group) has entered into a Joint Venture agreement on a equal basis (50:50) with Trakaya Cam Sanayii AS of Turkey (joint venture partner) for jointly pursuing the float glass business through HNGFL in India. Accordingly, 586.27 lakhs equity shares in HNGFL have been divested by the Company in favour of the joint venture partner and profit of Rs. 7,598.06 lakhs arising in this respect has been included in Other Income for the year ended March 31, 2014.

2.15.1 Inventories of Stores and Spare Parts include certain slow moving, non-moving and obsolete items. A provision of Rs. 729.97 Lakhs (Previous Year Rs. 715.01 Lakhs ) towards obsolescence for such slow moving, non-moving and obsolete items are carried in the books and the Management is of the opinion that the same is adequate and no further provision is required there against.

2.15.2 Inventories includes items lying with third parties.

2.15.3 Refer Note 2.3 to Financial Statements in respect of charge created.

2.17.1 Deposit with Banks are pledged with the Government Authorities.

2.18.2 Includes Rs. 23.21 Lakhs (Previous Year Rs. 23.21 Lakhs) deposited against demand raised by the Sales Tax Authority.

2.18.3 Includes Insurance Claim Receivable Rs. 45.65 Lakhs (Previous Year : Rs. 143.56 Lakhs).

2.19.1 Valued at lower of net book value or estimated net realisable value.

2.21.2 The Company has entered into a settlement with a bank, with regard to certain disputed foreign exchange transactions entered into in earlier years. In terms of the settlement, the Company has paid the settled amount and excess provision to the extent ofRs. 764.63 Lakhs has been written back.

2.22.1 Profit or loss on sale of Raw Materials has been adjusted in consumption.

2.25.1 Profit or loss on sale of stores has been adjusted in consumption.

2.25.2 Electricity Duty waiver benefit under State Incentive Schemes and subsidy received under State Incentive has been credited to Power and Fuel Account.

NOTE 2.29

Rs. in Lakhs

CONTINGENT LIABILITIES (to the extent not provided for)

SI. Particulars Ref As at As at No. Note No. March 31, 2014 March 31, 2013

(i) Guarantee furnished to bank on behalf of Subsidiaries 49,262.31 43,487.85

(ii) Guarantee furnished to a bank on behalf of an entity over which directors of the Company have significant influence 1,800.00 1,800.00

(iii) Sales Tax matter under appeals 1,148.57 1,169.28

(iv) Excise Duty and octroi demand issued against which the Company has preferred appeals and which in the opinion of the Management are not tenable. 1,618.32 1,186.19

(v) Cases pending with Labour Courts (to the extent ascertainable) 599.24 179.37

(vi) Claim for increased price of land acquired at Bahadurgarh by the then Punjab Government and given to the Company against which the claimants have preferred an appeal in the Supreme Court against the order of the High Court. 0.30 0.30

(vii) Other Claims against the Company not acknowledged as debt. 432.48 561.44

(x) Demand of stamp duty against leasehold land purchased 96.10 96.10 from Haryana Sheet Glass Ltd.*

(xi) Disputed Entry Tax for the Financial Year 2007-08, 2008- 59.81 59.59 09, 2009-10, 2010-11, 2011-12, 2012-13 and 2013-14**

(xii) Show cause notice from Central Excise FY 2008-09 *** - 9.74

(xiii) Export Commitment against EPCG - 535.48

* Appeal filed before Tax Board, Rajasthan

** Challenged by the other body and pending before Hon''ble Supreme Court.

*** Appeal filed before Commissioner- Appeal - Jaipur

On the basis of current status of individual cases and as per the legal advices received, wherever applicable the Management is of the view that no provision is required in respect of these cases. Further Cash outflow in respect of item no. (iii) to (xii) as mentioned above is dependent upon outcome of final judgement/decision.

NOTE 2.33

GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

As per Accounting Standard 15 "Employee Benefits" (AS - 15), the disclosures of Employee benefits as defined in the Accounting Standard are given below :

The guidance on implementing Accounting Standard - 15 (Revised 2005) on Employees Benefits issued by Accounting Standard Board (ASB) states that benefits involving employer established provident funds, which require the interest shortfalls to be recompensed are to be considered as "Defined Benefit Plans". The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the quarter ended December 31, 2011. The actuary has accordingly provided a valuation and based on the below provided assumptions there is no shortfall as at March 31, 2014.

The Company contributed Rs. NIL towards provident fund during the year ended March 31, 2014 (Rs. NIL during the year ended March 31, 2013).

b) Defined Benefit Plan

The employees'' gratuity fund scheme managed by Insurer is a Defined Benefit Plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

V. Compensated Absences

The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the Company as at March 31, 2014 is Rs. 348.77 Lakhs (March 31, 2013- Rs. 396.55 Lakhs).

VI. In respect of Gratuity (funded), the funds are managed by the insurers. Accordingly, the percentage or amount that each major category constitutes the Fair Value of total plan assets and effect thereof on overall expected rate of return on asset have not been disclosed.

The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, pro- motion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for plan assets manage- ment.

The contributions expected to be made by the Company for the year 2014-15 is yet to be determined.

NOTE 2.34 SEGMENT INFORMATION

The Company''s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the Management this is the only reportable segment, as per the Accounting Standard 17 on Segment Reporting, issued under Companies (Accounting Standards) Rules, 2006.

RELATED PARTY DISCLOSURES

I. Names of the related parties and nature of relationship

A) Subsidiary Companies

Glass Equipment (India) Limited (GEIL) HNG Global GmbH (HNGGG) Quality Minerals Limited (QML)

B) Associate Company (Upto June 30, 2013)

HNG Float Glass Limited (HNGFL)

C) Joint Venture Company (From July 1, 2013)

HNG Float Glass Limited (HNGFL)

D) Key Management Personnels and their relatives.

(i) Mr. C. K. Somany - Chairman and Non Executive Director (Relative of Key Management Personnel) (ii) Mr. Sanjay Somany - Vice Chairman and Managing Director and Key Management Personnel (iii) Mr. Mukul Somany - Vice Chairman and Managing Director and Key Management Personnel (iv) Mr. Rakesh Kumar Sharma - Executive Director and Key Management Personnel

E) Enterprises over which any person described in [D (i) to (iv)] above is able to exercise significant influence and with whom the Company has transactions during the year.

AMCL Machinery Limited (AMCL)

Brabourne Commerce Private Limited

Mould Equipment Limited (MEL)

Rungamattee Trexim Private Limited (RTPL)

Somany Foam Limited (SFL)

Spotme Tracon Private Limited (STPL)

Spotlight Vanijya Limited (SVL)

2.35.1 Remuneration paid to Vice Chairmen and Managing Directors and Executive Director includes Rs. 579.43 Lakhs for the previous year and Rs. 542.27 Lakhs for the year, which due to inadequacy of profit has exceeded the limits prescribed under the provisions of Companies Act, 1956. The Company has made an application before the Central Government and necessary approval in this respect is awaited.

NOTE 2.36 LEASES

The Company has acquired certain assets under Financial Lease, the cost of which is included in the gross blocks of buildings and vehicles. The lease term is 75 years (Rishikesh and Head Office) and 95 years (in case of Sinnar) for Building. The lease term is 3 years for vehicles, after which the legal title will pass on the Company. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum lease payments payable in future at the Balance Sheet date and their present value are as under:

Assets taken under operating leases :

Office premises and office equipments are obtained on Operating Lease. There is no contingent rent in the lease agree- ments. The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease agreements. There are no sublease and all the leases are cancelable in nature. The aggregate lease rentals are charged as "Rent" in Note ''2.25'' of the financial statement.

NOTE 2.37 DEFERRAL/CAPITALISATION OF EXCHANGE DIFFERENCES

In accordance with the amendment to AS 11, the Company has capitalised/decapitalised exchange loss/gain respectively arising on long-term foreign currency loan, amounting to Rs. 3,545.75 Lakhs (PY. Rs. 2,079.50 Lakhs ) to the cost of Plant & Equipments. The Company does not have any other long-term foreign currency monetary item. Hence, the amount of exchange loss deffered in the "Foreign Currency Monetary Item Translation Difference Account" is Rs. NIL (Previous Year : Rs. NIL). The unamortised amount as on March 31, 2014 is Rs. 5,088.98 Lakhs (Previous year : Rs. 2,172.55 Lakhs).

NOTE 2.44

The Board is of the opinion that the assets other than Fixed Assets and non current investments have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated.

NOTE 2.45

The Board of Directors of the Company has approved the Scheme of Amalgamation of its wholly owned subsidiaries, Glass Equipment (India) Limited and Quality Minerals Limited with the Company with effect from April 1, 2014, subject to necessary approvals.

NOTE 2.46

Figures for previous year have been regrouped and/or rearranged wherever considered necessary.

Mar 31, 2013

1.1.1 Term loans from Banks and Financial Institutions are secured by first charge ranking pari-passu on all immovable properties by way of equitable mortgage and hypothecation of all moveable properties both present and future of the Company and second charge ranking pari-passu on entire current assets of the Company, both present and future, save and except specific assets exclusively hypothecated in favour of respective lenders. Vehicle Finance Loans are secured against fixed assets obtained under Finance Lease arrangements.

1.1.2 Term Loans is against non disposal undertaking and power of attorney given by the HNG & ACE Trusts on the shares of the Company held by them.

1.1.3 Term Loans is against pledge of shares of the Company held by HNG & ACE Trusts.

1.2.1 Timing difference with respect to depreciation differential has been considered to the extent of deferred tax liability. As a matter of prudence, the remaining amout of the differential resulting in deferred tax asset has been ignored.

1.2.2 In terms of Scheme of Amalgamation under section 391 to 394 of the Companies Act, 1956 as sanctioned by the Hon''ble High Court of Calcutta vide its Order dated April 7, 2008 and by Hon''ble High Court of Delhi vide its Order dated March 19, 2008, deferred tax liability is adjusted to Securities Premium Account. Accordingly, such liability of Rs. Nil lacs (Previous year Rs. 2,419.91 lacs) for the year has been adjusted to

Securities Premium Account.

1.3.1 The Company had entered into certain foreign exchange transactions in earlier years which are disputed by the Company. The Company has been legally advised that these contracts are not permissible derivative transactions and therefore void. During the year, an arbitration award upholding the claim (including interest) of Rs. 4,349.73 lacs against the Company in relation to these very transactions has been made, which the Company has contested before the Hon''ble High Court of Bombay.

However pending final decision on the matter, as a matter of prudence the said claim alongwith interest thereon aggregating to Rs. 3,627.83 lacs (including Rs. 3,227.51 lacs till previous year) has been made in the financial statements.

1.4.1 Deposit with Banks are pledged with the Government Authorities.

1.4.2 In the opinion of the Management/Board of Directors, the "Loans and Advances" have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

1.5.1 The accounts of some of the customers are pending reconciliation/confirmation.

1.5.2 Provision as carried in the books are against doubtful debts and in the opinion of the Management the same is adequate and no further provision is required thereagainst.

1.6.1 Includes Rs. 23.21 lacs (Previous Year Rs. 22.81 lacs) deposited against demand raised by the Sales Tax Authority.

1.7.1 Includes Rs. 1,448.28 lacs (Previous Year: Rs. 1,448.28 lacs) recoverable from certain parties. The Company has re-called the said amount from the parties and the matter has been referred for arbitration for adjudication. Pending this, the amount has been considered good and recoverable.

1.7.2 Includes Insurance Claim Receivable Rs. 143.56 lacs (Previous Year: Rs. 268.14 lacs).

1.8 SEGMENT INFORMATION

The Company''s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the Management this is the only reportable segment, as per the Accounting Standard 17 on Segment Reporting, issued under Companies (Accounting Standards) Rules, 2006.

Geographical Segment

a) The following table shows the distribution of the Company''s Revenue from operations by Geographical market.

1.9 RELATED PARTY DISCLOSURES

I Names of the related parties and nature of relationship

A) Subsidiary Companies

(i) Glass Equipment (India) Limited (GEIL) (ii) Quality Minerals Limited (QML) (iii) HNG Global GmbH (HNGGG)

B) Associate Company

(i) HNG Float Glass Limited (HNGFL)

C) Key Management Personnels and their relatives

(i) Mr. C. K. Somany - Chairman and Non Executive Director (Relative of Key Management Personnel) (ii) Mr. Sanjay Somany - Vice Chairman and Managing Director and Key Management Personnel (iii) Mr. Mukul Somany - Vice Chairman and Managing Director and Key Management Personnel (iv) Mr. Rakesh Kumar Sharma - Executive Director and Key Management Personnel

D) Enterprises over which any person described in [C (i) to (iv)] above is able to exercise significant influence and with whom the Company has transactions during the year.

(i) AMCL Machinery Limited (AMCL)

(ii) Mould Equipment Limited (MEL)

(iii) Rungamattee Trexim Private Limited (RTPL)

(iv) Somany Foam Limited (SFL)

(v) Spotme Tracon Private Limited (STPL)

(vi) Spotlight Vanijya Limited (SVL)

1.10.1 Remuneration paid to Vice Chairmen & Managing Directors and Executive Director includes Rs. 579.43 lacs which due to inadequacy of profit has exceeded the limits prescribed under the provisions of the Companies Act, 1956. The Company has made an application on November 23, 2012 before the Central Government and necessary approval in this respect is awaited. Further the reappointment and remuneration of Rs. 4.76 lacs of the Executive Director with effect from the period from March 1, 2013 to March 31, 2013 is subject to approval of Shareholders in the ensuing General Meeting and Central Government.

1.11 LEASES

The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Blocks of Buildings and Vehicles. The lease term is 75 years (Rishikesh and Head Office) and 95 years (In case of Sinnar) for Building. The lease term is 3 years for Vehicles, after which the legal title will pass on to the Company. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum lease payments payable in future at the Balance Sheet date and their present value are as under:

Assets taken under operating leases:

Office premises and office equipments are obtained on operating lease. There is no contingent rent in the lease agreements. The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease agreements. There are no sublease and all the leases are cancelable in nature. The aggregate lease rentals are charged as "Rent" in Note ''2.25'' of the financial statement.

1.12 DEFERRAL/CAPITALISATION OF EXCHANGE DIFFERENCES

In accordance with the amendment to AS 11, the Company has capitalised/decapitalised exchange loss/gain respectively arising on long-term foreign currency loan, amounting to Rs. 2,079.50 lacs (PY. Rs. 235.25 lacs ) to the cost of Plant & Equipments. The Company does not have any other long-term foreign currency monetary item. Hence, the amount of exchange loss deffered in the "Foreign Currency Monetary Item Translation Difference Account" is Rs. NIL (PY. Rs. NIL)

1.13 Figures for previous year have been regrouped and/or rearranged wherever considered necessary.

Mar 31, 2012

* Ceramic Decorators Limited have been merged with Bra Bourne Commerce Limited with effect from April 1, 2010 as per Scheme of Arrangement duly passed by Hon'ble High Court of Calcutta vide its order dated August 9, 2011.

# Noble Enclave & Towers Private Limited and Topaz Commerce Limited have been merged with Spotlight Vanjya Limited with effect from April 1, 2010 as per Scheme of Arrangement duly passed by Hon'ble High Court of Calcutta vide its order dated December 20, 2011.

1.1 In respect of 14,641,600 Equity Shares held by HNG Trust and ACE Trust, the Trustees had informed the Company of their decision to forego their rights to dividend on shares held by them for the year 2010-11 and accordingly dividend was not declared on these shares. Consequently, Proposed Dividend and Dividend Distribution Tax amounting to Rs.219.62 Lacs and Rs.35.63 Lacs respectively has been written back during the year.

1.2 Term Loan from Banks and Financial Institutions are secured by first charge ranking paripassu on all immovable properties by way of equitable mortgage and hypothecation of all moveable properties both present and future of the Company and second charge ranking pari-passu on entire current assets of the Company, both present and future, save and except specific assets exclusively hypothecated in favour of respective lenders.

Rupee Term Loan from others are secured by pledge of Equity Share held by HNG and ACE Trust.

Vehicle Finance Loans are secured against fixed assets obtained under finance lease arrangements.

Note:

1.1 Working Capital Facilities (Fund Based and Non Fund Based) from banks are secured by hypothecation of entire Current Assets of the Company, both present and future and second charge on entire Fixed Assets of the Company in favour of consortium bankers led by State Bank of India.

1.2 The Company had entered into certain derivative transactions in earlier years which are being disputed by the Company. However, in pursuance of announcement dated March 29, 2008 of "The Institute of Chartered Accountants of India" on "Accounting for Derivatives" and as a matter of prudence the claims as crystallised as on the date of knock out intimation on such transaction in earlier years and interest thereon amounting to Rs. 3,227.51 Lacs (including Rs. 2,827.18 Lacs provided in the previous year) remains provided and included in the above provision. The matters are subjudice and the Company has been legally advised that these contracts are void ab-initio.

1.3 The Company has provided for Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and accordingly based on evidences MAT Credit of Rs.1,450 Lacs (P Y Rs.NIL) has been recognised in these Financial Statements.

1.4 In terms of Scheme of Arrangement pursuant to the Order of Hon'ble High Court of Calcutta dated April 7, 2008

(a) and by the Hon'ble High Court, Delhi dated March 19, 2008 (the Scheme) sanctioning the amalgamation of Ace Glass Containers Limited (AGCL) with the Company, 1,368,872 and 2,141,448 equity shares of Rs. 10/- each of the Company issued in lieu of the shares of the Company held by AGCL and shares of AGCL held by the Company were transferred to ACE Trust and HNG Trust respectively in earlier years for the sole benefit of the Company. Out of the shares so transferred 6,844,360 and 7,797,240 equity shares of Rs. 2/- each of the Company (after subdivision of 1 equity share of Rs. 10/- each into 5 equity shares of Rs. 2/- each w.e.f. November 13, 2009) are held by ACE Trust and HNG Trust respectively as on 31st March 2012.

1.5 In view of the shares being held for the sole benefit of the Company as mentioned above and book value thereof

(b) as such not being Company's investments representing the value of the beneficial interest recoverable from the Trust, these have no longer been so classified in the accounts of the Company. Accordingly, these have been shown as deduction from the Shareholders' Fund and adjusted against the General Reserve of the Company. Consequent to this, General Reserve and Investments are lower to that extent. However, this does not have any impact on the profit of the Company for the year.

1.6 Receipt from the Trusts on account of beneficial interest will be credited to the Capital Reserve.

1.7 Inventories of Stores and Spare Parts include items, which are lying since earlier years. A provision of Rs. 729.97 Lacs (P Y. Rs. 685.15 Lacs) towards obsolescence is carried in the books and the Management is of the opinion that the same is adequate and no further provision is required there against.

1.8 Inventories includes items lying with third parties.

1.9 The accounts of some of the customers are pending reconciliation / confirmation.

1.10 A provision is carried in the books against doubtful debts and the Management is of the opinion that the same is adequate and no further provision is required there against.

1.11 A provision of Rs.32.50 Lacs (P.Y. Rs.46.04 Lacs) is carried in the books against credit notes issuable to customers and the Management is of the opinion that the same is adequate and no further provision is required there against.

* Appeal filed before Tax Board, Rajasthan

** Challenged by the other body and pending before Hon'ble Supreme Court.

On the basis of current status of individual cases and as per the legal advice obtained, wherever applicable the Management is of the view that no provision is required in respect of these cases. Further cash outflow in respect of item no. (iii) to (xii) as mentioned above is dependent upon outcome of final judgment/decision.

1.12 In the opinion of the Management/Board of Directors, the "Loans and Advances" have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

2. RELATED PARTY DISCLOSURES

I Names of the related parties and nature of relationship

A) Subsidiary Companies

Glass Equipment (India) Limited (GEIL)

Quality Minerals Limited (QML)

HNG Global GmbH (HNGGG)

B) Associate Company

HNG Float Glass Limited (HNGFL)

C) Key Management Personnels and their relatives

(i) Mr. C. K. Somany - Chairman and Non Executive Director (Relative of Key Management Personnel)

(ii) Mr. Sanjay Somany - Vice Chairman and Managing Director and Key Management Personnel

(iii) Mr. Mukul Somany - Vice Chairman and Managing Director and Key Management Personnel

(iv) Mr. Rakesh Kumar Sharma - Executive Director and Key Management Personnel

D) Enterprises over which any person described in [C (i) to (iv)] above is able to exercise significant influence and with whom the Company has transactions during the year.

AMCL Machinery Limited (AMCL)

Brabourne Commerce Private Limited (BCPL)

Mould Equipment Limited (MEL)

Rungamatte Trexim Private Limited (RTPL)

Somany Foam Limited (SFL)

Spotlight Vanjya Limited (SVL)

3. LEASES

The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Blocks of Buildings and Vehicles. The lease term is 75 years for Building. The lease term is 3 years for Vehicles, after which the legal title will pass on the Company. The lease item has been recognised as an asset at the present value of the minimum lease payments. Minimum lease payments payable in future at the balance sheet date and their present value are as under:

4. DEFERRAL/CAPITALISATION OF EXCHANGE DIFFERENCES

The Ministry of Corporate Affairs (MCA) has issued the amendment dated December 29, 2011 to AS 11 - The Effects of Changes in Foreign Exchange Rates, to allow Companies deferral/capitalisation of exchange differences arising on Long-term Foreign Currency Monetary Items.

In accordance with the amendment to AS-11, the Company has capitalised/decapitalised exchange loss/gain respectively arising on long-term foreign currency loan, amounting to Rs. 195.15 Lacs (P.Y. NIL ) to the Capital Work-in-Progress. The Company does not have any other Long-term Foreign Currency Monetary Item. Hence, the amount of exchange loss deffered in the "Foreign Currency Monetary Item Translation Difference Account" is Rs. NIL (PY. Rs. NIL)

5. Figures for P. Y. have been regrouped and/or rearranged wherever considered necessary.

6. Till the year ended March 31, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956, for the preparation and presentation of its Financial Statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified P Y. figures to conform to this year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of Financials Statements. However, it significantly impacts presentation and disclosures made in the Financial Statements, particularly presentation of Balance Sheet.

Mar 31, 2011

(Rs. in Lacs) 2010-2011 2009-2010

1) Contingent liabilities not provided for

a) Outstanding Bank Guarantees/Letter of Credit 8,939.96 4,336.91

b) Guarantee furnished to a bank on behalf of an entity over which directors of the 3,600.00 3,600.00 Company has significant influence.

c) Sales Tax matter under appeals 1,088.94 1,345.17

d) Excise Duty and Octroi demand issued against which the Company has preferred 1,120.00 958.37 appeals and which in the opinion of the management are not tenable.

e) Cases pending with labour courts (to the extent ascertainable) 507.28 530.92

f) Claim for increased price of land acquired at Bahadurgarh by the then Punjab 0.30 0.30 Government and given to the Company against which the claimants have preferred an appeal in the Supreme Court against the order of the High Court.

g) Other Claims against the Company not acknowledged as debt. 379.61 304.63

h) Disputed entry Tax for the Financial Year 2007-08, 2008-09 and 2009-10 248.22 167.37

Notes : On the basis of current status of individual cases and as per the legal advice obtained, wherever applicable the management is of the view that no provision is required in respect of these cases. Further Cash outflow in respect of item no. c) to i) as mentioned above is dependent upon outcome of final judgment/decision.

b) (i) In terms of Scheme of Arrangement pursuant to the Order of Honble High Court at Calcutta dated 7 April 2008 and by the Honble High Court at Delhi dated 19 March 2008 (the Scheme) sanctioning the amalgamation of Ace Glass Containers Limited (AGCL) with the Company, 2141448 and 1368872 equity shares of the Company issued in lieu of the shares of AGCL held by the Company and shares of the Company held by AGCL were transferred to HNG Trust and Ace Trust respectively in earlier years. (ii) These shares have been held for the benefit of the Company. Therefore proceeds of Rs.5592.95 Lacs arising on sale of 29,10,000 shares by the HNG Trust during the year being part of the shareholders fund, based on experts opinion have been credited to the Capital Reserve and the corresponding book value of beneficial interest in these shares have been adjusted from the said reserve. The remaining beneficial interest represented by 14641600 shares of the Company have been continued to be shown under investments at book value, as originally classified in terms of the Scheme.

2) Financial and Derivative Instruments:

a) The Company had entered into certain derivative transactions in earlier years which are being disputed by the Company. However, in pursuance of announcement dated 29 March 2008 of "The Institute of Chartered Accountants of India" on "Accounting for derivatives" and as a matter of prudence the claims as crystallised as on the date of knock out intimation on such transaction and interest thereon amounting to Rs. 2827.18 Lacs (including Rs. 2,452.19 Lacs provided in the previous year) remains provided in these accounts.

b. In terms of Scheme of Amalgamation under section 391 to 394 of the Companies Act, 1956 as sanctioned by the Hon,ble High Court of Calcutta vide its Order dated 7 April 2008 and by Hon,ble High Court at Delhi vide its Order dated 19 March 2008, deferred tax liability of Rs.148.82 Lacs (previous year Rs.2792.84 Lacs) for the year has been adjusted to Share Premium Account.

c. The Company has provided for Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and accordingly based on evidences MAT Credit of Rs. NIL Lacs (previous year Rs. 365.00 Lacs) has been recognised in these accounts.

d. Provision for Income Tax has been made after considering the set off of unabsorbed depreciation and bought forward business loss of erstwhile Ace Glass Containers Limited merged with the Company with effect from 1 April 2006.

3) The Company has incurred Rs. 12.83 Lacs (Previous year Rs. 11.98 Lacs) on account of Research and Development expenses which has been charged to Profit and Loss Account.

4) As per Accounting Standard 15 "Employee Benefits" (AS - 15), the disclosures of Employee benefits as defined in the Accounting Standard are given below:

The guidance on implementing Accounting Standard - 15 (Revised 2005) on Employees Benefits issued by Accounting Standard Board (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be made by the employers needs to be treated as "Defined Benefit Plan". According to the management, in consultation to the actuary, it is not practical or feasible to actuarially value the Provident liability in the absence of any guidance from Actuarial Society of India and also due to the fact that the rate of interest as notified by the Government can vary annually. Accordingly, the Company is currently not in a position to provide other related disclosures as required by the AS - 15 read with ASB guidance. However, with regard to the position of the fund and confirmation to the Trustees of such fund there is no shortfall as at year-end.

Defined benefit Plan

The employees gratuity fund scheme managed by Insurer is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

V. Compensated Absences

The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the Company as at 31.03.2011 is Rs. 342.17 Lacs (31 March 2010 - Rs. 233.92 Lacs).

VI. In respect of Gratuity (funded), the funds are managed by the insurers. Accordingly, the percentage or amount that each major category constitutes the Fair value of total plan assets and effect thereof on overall expected rate of return on asset have not been disclosed.

The estimates of rate of escalation in salary considered in actuarial valuation taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Companys policy for plan assets management.

The contributions expected to be made by the Company for the year 2011-12 is yet to be determined.

5) The Companys exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management this is the only reportable segment, as per the Accounting Standard 17 on Segment Reporting, issued under Companies (Accounting Standards) Rules, 2006.

6) The accounts of some of the customers are pending reconciliation / confirmation and Sales Tax deferment loan of Rs.938.69 Lacs is subject to confirmation and the same have been taken as per the balances appearing in the books.

A provision of Rs.749.09 Lacs (Previous year Rs. 695.06 Lacs) is carried in the books against doubtful debts and the management is of the opinion that the same is adequate and no further provision is required there against.

7) In the opinion of the Management/Board of Directors, the "Current Assets Loans and Advances" have a realisable value on in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

8) Disclosure of "Sundry Creditors under Current Liabilities" is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" (the Act). There are no delays in payment made to such suppliers. There is no overdue amount outstanding as at the balance sheet date. Based on above the relevant disclosures u/s 22 of the Act are as follows:

9) Profit or loss on sale of Raw Materials and Stores has been adjusted in consumption.

10) Stores and Spare Parts consumption includes materials consumed for Repairs and Replacement.

11) Inventories of Stores and Spare Parts include items, which are lying with the Company. A provision of Rs. 685.15 Lacs (Previous year Rs. 706.27 Lacs) towards obsolescence is carried in the books and the management is of the opinion that the same is adequate and no further provision is required there against.

12) Related Party Disclosures as identified by the management in accordance with the Accounting Standard - 18.

A) Subsidiary Companies

i) Glass Equipment (India) Limited

ii) Quality Minerals Limited

B) Associate

i) HNG Float Glass Limited

C) Directors and Relatives

i) Shri Chandra Kumar Somany - Chairman and Non Executive Director (Relative of Key Management Personnel)

ii) Shri Sanjay Somany - Vice Chairman and Managing Director and Key Management Personnel*

iii) Shri Mukul Somany - Vice Chairman and Managing Director and Key Management Personnel*

iv) Shri Rakesh Sharma - Executive Director and Key Management Personnel w.e.f. 1 March 2011

v) Shri Ram Raj Soni - Executive Director and Key Management Personnel upto 30 September 2010

* Shri Sanjay Somany, Managing Director and Shri Mukul Somany, Joint Managing Director, both of them have been re-designated as Vice- Chairman and Managing Director w.e.f 1 October 2010

D) Enterprises over which any person described in [C (i) to (iv)] above is able to exercise significant influence and with whom the Company has transactions during the year.

i) AMCL Machinery Limited

ii) Ceramic Decorators Limited

iii) Microwave Merchants Private Limited

iv) Mould Equipment

v) Mould Equipment Limited

vi) Noble Enclave and Towers Private Limited

vii) Somany Foam Limited

viii) Rungamatte Trexim Private Limited

ix) Topaz Commerce Limited

13) a) The Company has acquired certain assets under financial lease, the cost of which is included in the Gross blocks of Buildings and Vehicles. The lease term is 75 years for Building. The lease term is 3 years for Vehicles, after which the legal title will pass on the Company. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum lease payments payable in future at the Balance Sheet date and their present value are as under. There is no escalation clause in the lease agreement for vehicles:

b) Assets taken under operating leases:

Office premises and office equipments are obtained on operating lease. There is no contingent rent in the lease agreements. The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease agreements. There are no sublease and all the leases are cancelable in nature. The aggregate lease rentals are charged as "Rent" in Schedule Q of the financial statement.

14) Figures for previous year have been regrouped and/or rearranged wherever considered necessary.

15) Schedule "A" to "L" and "S" form an integral part of Balance Sheet and Schedule "M" to "S" form an integral part of Profit and Loss Account.

Mar 31, 2010

(Rs. in lacs)

2009-2010 2008-2009

1) Contingent liabilities not provided for

a) Outstanding Bank Guarantees / Letter of Credit 4336.91 6410.93

b) Guarantee furnished to a bank on behalf of an entity over which directors of the Company has significant influence. 3600.00 3600.00

c) Sales Tax matter under appeals 1345.17 216.88

d) Excise Duty and Octroi demand issued against which the Company has preferred 958.37 1639.10 appeals and which in the opinion of the management are not tenable.

e) Cases pending with labour courts (to the extent ascertainable) 530.92 544.44

f) Claim for increased price of land acquired at Bahadurgarh by the then 0.30 0.30 Punjab Government and given to the Company against which the claimants have

preferred an appeal in the Supreme Court against the order of the High Court.

g) Amount of duty against Export Obligation in respect of exemption - 19.19 availed against Advance License Scheme.

h) Other Claims against the Company not acknowledged as debt. 304.63 105.91

i) Disputed entry Tax for the Financial Year 2007-08, 2008-09 and 2009-10 167.37 -

Notes : On the basis of current status of individual cases and as per the legal advice obtained, wherever applicable the management is of the view that no provision is required in respect of these cases. Further Cash outflow in respect of item no. c) to i) as mentioned above is dependent upon outcome of final judgment/decision.

3) The face value of equity shares of Rs. 10/- each has been subdivided into the face value of Rs. 2/- per equity share with effect from 13.11.2009, being the record date. Accordingly the number of shares has increased. The EPS for the current year as well as for the previous year has been stated / restated taking into account the sub-division of shares.

4) Financial and Derivative Instruments:

a) The Company had entered into certain derivative transactions in earlier years which are being disputed by the Company. However, in pursuance of announcement dated March 29, 2008 of ÃThe Institute of Chartered Accountants of IndiaÃ on ÃAccounting for derivativesÃ and as a matter of prudence the claims as crystallised as on the date of knock out intimation on such transaction and interest thereon amounting to Rs. 2452.19 lacs (including Rs. 2146.99 provided in the previous year) remains provided in these accounts.

The matters are subjudice and the Company has been legally advised that these contracts are void ab- initio.

b. In terms of Scheme of Amalgamation under section 391 to 394 of the Companies Act, 1956 as sanctioned by the Honble High Court of Calcutta vide its Order dated April 7, 2008 and by Honble High Court at Delhi vide its Order dated March 19, 2008, deferred tax liability of Rs. 2792.84 lacs (previous year Rs.2369.18 lacs) for the year has been adjusted to Share Premium Account.

c The Company has provided for Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and accordingly based on evidences MAT Credit of Rs. 365.00 lacs (previous year Rs. 355.00 lacs) has been recognised in these accounts.

d. Provision for Income Tax has been made after considering the set off of unabsorbed depreciation and bought forward business loss of erstwhile Ace Glass Containers Limited merged with the Company with effect from 1st April, 2006.

* Advance to employees pursuant to general business practice and employees welfare.

5)The Company has incurred Rs 11.98 Lacs (Previous year Rs 38.26 lacs) on account of Research and Development expenses, which has been charged to Profit and Loss Account.

6) As per Accounting Standard 15 ÃEmployee BenefitsÃ (AS Ã 15), the disclosures of Employee benefits as defined in the Accounting Standard are given below:

The guidance on implementing Accounting Standard - 15 (Revised 2005) on Employees Benefits issued by Accounting Standard Board (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be made by the employers needs to be treated as ÃDefined Benefit PlanÃ. According to the management, in consultation to the actuary, it is not practical or feasible to actuarially value the Provident liability in the absence of any guidance from Actuarial Society of India and also due to the fact that the rate of interest as notified by the Government can vary annually. Accordingly, the Company is currently not in a position to provide other related disclosures as required by the AS Ã 15 read with ASB guidance. However, with regard to the position of the fund and confirmation to the Trustees of such fund there is no shortfall as at year-end.

Defined Benefit Plan

The employees gratuity fund scheme managed by Insurer is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

V. Compensated Absences

The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the company as at 31.03.2010 is Rs. 233.92 lacs (31.03.2009 Ã Rs. 246.17 lacs).

VI. In respect of Gratuity (funded), the funds are managed by the insurers. Accordingly, the percentage or amount that each major category constitutes the Fair value of total plan assets and effect thereof on overall expected rate of return on asset have not been disclosed.

The estimates of rate of escalation in salary considered in actuarial valuation taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Companys policy for plan assets management.

The contributions expected to be made by the Company for the year 2010-11 is yet to be determined.

7) The Companys exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management this is the only reportable segment, as per the Accounting Standard 17 on Segment Reporting, issued under Companies (Accounting Standards) Rules, 2006.

Geographical Segment

The following table shows the distribution of the Companys Sales by Geographical market.

8) The accounts of some of the customers are pending reconciliation / confirmation and Sales Tax deferment loan of Rs.1610.55 lacs is subject to confirmation and the same have been taken as per the balances appearing in the books.

A provision of Rs. 695.06 lacs (Previous year Rs. 863.04 lacs) is carried in the books against doubtful debts and the management is of the opinion that the same is adequate and no further provision is required there against.

9) Advances recoverable includes Rs.2299.00 lacs (Previous Year Rs.3500 lacs) paid towards share application money for acquiring 2,29,90,000 equity shares of Rs.10/- each of HNG Float Glass Limited, an associate. Equity shares against the application has since been allotted.

10) In the opinion of the Management/Board of Directors, the ÃCurrent Assets Loans and AdvancesÃ have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

11) Profit or loss on sale of Raw Materials and Stores has been adjusted in consumption.

12) Stores and Spare Parts consumption includes materials consumed for Repairs and Replacement.

13) Inventories of Stores and Spare Parts include items, which are lying with the company. A provision of Rs 706.27 lacs (including Rs. 26.76 lacs for the year) towards obsolescence is carried in the books and the management is of the opinion that the same is adequate and no further provision is required there against.

14) Related Party Disclosures as identified by the management in accordance with the Accounting Standard Ã 18.

A) Subsidiary Companies

i) Glass Equipment (India) Limited

ii) Quality Minerals Limited

B) Associate

i) HNG Float Glass Limited

C) Directors and Relatives

i) Mr. C. K. Somany - Chairman and Non Executive Director (Relative of Key Management Personnel)

ii) Mr. Sanjay Somany - Managing Director and Key Management Personnel

iii) Mr. Mukul Somany - Jt. Managing Director and Key Management Personnel

iv) Mr. Bharat Somany - Management Trainee upto 31st May, 2009 (Relative of Key Management Personnel)

v) Mr. R. R. Soni - Executive Director and Key Management Personnel

D) Enterprises over which any person described in [C (i) to (iv)] above is able to exercise significant influence and with whom the Company has transactions during the year.

i) AMCL Machinery Limited

ii) Ceramic Decorators Limited

iii) Microwave Merchants Private Limited

iv) Mould Equipment

v) Noble Enclave and Towers Private Limited

vi) Somany Foam Limited

vii) Topaz Commerce Limited

* Companies in which directors are interested as member / director(s). Further these loans were given by the erstwhile Ace Glass Containers Limited (AGCL) and none of the directors was director in AGCL and accordingly, as advised legally, the provisions of Section 295 of the Companies Act, 1956 are not applicable with regard to these loans.

15) a) The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Blocks of Buildings and Vehicles. The lease term is 75 years for Building. The lease term is 3 years for Vehicles, after which the legal title will pass on the Company. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum lease payments payable in future at the balance sheet date and their present value are as under. There is no escalation clause in the lease agreement for vehicles:

b) Assets taken under operating leases:

Office premises and office equipments are obtained on operating lease. There is no contingent rent in the lease agreements. The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease agreements. There are no sublease and all the leases are cancelable in nature. The aggregate lease rentals are charged as ÃRentÃ in Schedule ÃQ of the financial statement.

Notes:

1. Installed Capacity and Actual Production has been given in M.T.

2. Licensed Capacity is not given as licensing has been abolished vide Press Note No.9 dated 2nd August, 1991 and Notification

No. S.O.477 (E) dated 25th July, 1991 issued by Government of India, Ministry of Industry and Department of Industrial Development. The installed capacity is as certified by the management.

* Sales include breakages of bottles.

# Others include General Merchandise Sale amounting to Rs. 11.68 lacs (Previous Year Rs. 76.95 lacs) and sale of services Rs. Nil lacs (Previous year Rs 55.37 lacs)

*Excluding Rs 121.38 lacs (Previous Year Rs 118.32 lacs) being raw material processing charges and General Merchandise Purchase amounting to Rs. 7.66 lacs (Previous Year Rs. 56.97 lacs)

16) Figures for previous year have been regrouped and/or rearranged wherever considered necessary.

17) Schedule "A" to "L" and "S" form part of Balance Sheet and Schedule "M" to "S" form part of Profit and Loss Account.

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