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HOW WE TRANSFORMEDA BOTTLE INTO A
BRAND
Hindusthan National Glass & Industries Limited2 Red Cross Place, Kolkata- 700 001
www.hngindia.com
Hindusthan National Glass & Industries Limited62nd Annual Report, 2007-08
In this Annual Report we have disclosed forward-looking information to
enable investors to comprehend our prospects and take informed
investment decisions. This report and other statements - written and
oral - that we periodically make contain forward-looking statements
that set out anticipated results based on the management’s plans and
assumptions. We have tried wherever possible to identify such
statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’,
‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance
in connection with any discussion of future performance.
We cannot guarantee that these forward-looking statements will be
realised, although we believe we have been prudent in our
assumptions. The achievement of results is subject to risks,
uncertainties and even inaccurate assumptions. Should known or
unknown risks or uncertainties materialise, or should underlying
assumptions prove inaccurate, actual results could vary materially from
those anticipated, estimated or projected. Readers should bear this in
mind.
We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or
otherwise.
Disclaimer
A PRODUCTinfo@trisyscom.com
Contents
4 Corporate identity
6 What we achieved in 2007-08
8 Chairman’s strategy
18 Why Glass?
18 Our Strengths
20 10-year performance trend
22 Directors’ Report
30 Management’s Discussion and Analysis
42 Report on Corporate Governance
53 Auditors’ Report
56 Balance Sheet
57 Profit & Loss Account
58 Cash Flow Statement
84 Statement Under Section 212
85 Glass Equipment (India) Limited – Subsidiary Accounts
113 Quality Minerals Limited – Subsidiary Accounts
127 Consolidated Accounts
152 Corporate Information
INDIA POSSESSES THE SECOND
LARGEST POPULATION OF CONSUMERS IN THE WORLD.
These consumers drink beverages. Store medicines.
Eat processed food. Use personal
healthcare products. From container glass bottles.
Every hour. Every day.
Hindusthan National Glass & Industries Limited
(HNGIL) is India’s largest container glass
manufacturer. Enjoying over 65% share of
potentially the second largest market in the world.
2 | Hindusthan National Glass & Industries Limited
IN FACT, HINDUSTHAN NATIONALGLASS & INDUSTRIES LIMITED ISMORE THAN JUST A CONTAINERGLASS MANUFACTURER. IT IS INDIA’S LEADING GLASSPACKAGING SOLUTIONS PROVIDER.
Hindusthan National Glass & Industries Limited | 3
4 | Hindusthan National Glass & Industries Limited
Our background� Promoted by the Somany family who have been in the glass
manufacturing industry for the last five decades
� The HNG Group was founded in 1952 following the
commissioning of India’s first fully automatic glass
manufacturing plant at Rishra (near Kolkata)
Our vision� To create a world-class glass manufacturing plant that
pursues quality, cost reduction, and productivity improvement
in a truly holistic manner leading to customers’, shareholders’,
employees’ and suppliers’ satisfaction. This integrated effort
will result in the Company becoming an industry benchmark
and a role model for systems, processes and results
Our presence� Headquartered in Kolkata
� Pan-India manufacturing facilities at Rishra, Bahadurgarh,
Rishikesh, Pondicherry, Nashik and Neemrana
� The Company’s products are available in 23 countries
Our manufacturing capabilities� An installed capacity of 2575 TPD, the largest in India’s
container glass industry
� Incorporated technology from the best in the industry in
Europe and America
� Operates 11 furnaces and 44 production lines with fully
automatic IS (Individual Section) machines
� All plants equipped with a thorough electronic inspection
system from batch mixing to final packing
� Quality control and R&D sections equipped with
sophisticated instruments, enabling the production of
international quality glassware
� Fully equipped mould manufacturing workshop to
manufacture bottle moulds of all designs and shapes
Our product range
* Bottles range from 5 ml to 3200 ml with downstream
applications in the liquor, beer, beverages, pharmaceuticals,
processed foods and cosmetics industries
� Bottles are produced in three colours (amber, flint and green)
Our recognition� The Company is ISO 9000:2000-certified
� The Company is pursuing ISO 14000 / 18000 / 22000
certifications
Hindusthan National Glass & Industries Limited | 5
Our market position� Undisputed leader in India’s container glass industry with a
market share in excess of 65%
� Our customer profile accounts for the top ten players in the
downstream verticals of our presence
� Services customers with the lowest turnaround time from
design to market in the global container glass industry
Our investor orientation� Shares are listed on the Bombay Stock Exchange and
Calcutta Stock Exchange
� The Company enjoyed a market capitalisation of Rs 848.41
crore on March 31, 2008
� Continuously profitable and dividend paying
Our major customers Food: Hindustan Unilever, Glaxo Smithkline, Nestle, Koeleman,
Global Green, Heinz and Dabur
Pharmaceuticals: Pfizer, Cipla, Glaxo SmithKline, Reckitt
Benckiser, Ranbaxy and Himalaya
Beer: United Breweries, SAB Miller, Asia Pacific Breweries and
South Asia Breweries
Liquor: United Spirits, Pernod Ricard, Diageo, Radico and
Bacardi
Soft drinks: Coca Cola and Pepsi
Our global technology partners � Batch-houses from Zippe (Germany)
� Furnaces from Sorg and Horn (Germany)
� Forehearths from Emhart (USA) / PSR (the UK)
� IS machine control system from Botterro (Italy) / Futronics
� Bottle Transfer from Sheppee (the UK) /Pennekamp
(Germany)
� Annealing lehrs from Pennekamp (Germany) / Carmet (USA)
� Lab inspection machinery from AGR (USA)
� Bottle printing machines from Strutz (USA) and Rosario (the
Netherlands)
Our sectoral spread
Segment 2007-08 (%)
Food 14
Soft drinks 4
Pharmaceutical 16
Liquor 49
Beer 12
Others 5
6 | Hindusthan National Glass & Industries Limited
WHAT WEACHIEVED
IN 2007-08
Profitability� 92.87% increase in topline (gross
sales) from Rs 595.40 crore in 2006-07
to Rs 1148.34 crore.
� 368.22% increase in PAT from
Rs 34.24 crore in 2006-07 to Rs 160.34
crore.
� 821 bps increase in net margin from
5.75% in 2006-07 to 13.96%.
� 103 bps decline in manufacturing
and other expenses as a percent of
total income from 51.70% in 2006-07
to 50.67%.
Acquisitions� Acquisition of the Haryana Sheet
Glass’s Neemrana unit with a
capacity of 140 TPD in October 2007
Operations� Increase in the ‘draw to pack’ ratio
highest in India
� Development of narrow neck press
and blow (NNPB) technology for light
weighting glass bottles
� Employment of management
techniques like Lean Six Sigma and
TPM to improve production efficiency
and quality
Marketing� Initiation of packaging solution
services, comprising pre-bottling
and post-bottling consultancy
� Addition of MNC brands to the
customer list like Carlsberg, inBev,
Crown, Budweiser, Whyte & Mackay
etc., some of which imported their
complete bottling requirements
earlier
Post-balance sheetdevelopments� Initiation of SAP ERP
implementation (to be operational in
2008-09)
Hindusthan National Glass & Industries Limited | 7
2004-05 2005-06 2006-07 2007-08
1,02
8.19
521.
84
426.
70
434.
36
Total income (Rs in crore) EBITDA (Rs in crore)
2004-05 2005-06 2006-07 2007-08
160.
34
34.2
4
23.9
5
31.5
1
PAT (Rs in crore)
2004-05 2005-06 2006-07 2007-08
21.2
6
17.6
4
14.8
6
22.8
2
RONW (%)
2004-05 2005-06 2006-07 2007-08
203.
83
69.2
7
56.7
0
61.4
1
Cash profit (Rs in crore)
2004-05 2005-06 2006-07 2007-08
13.9
6
5.75
5.04
6.70
PAT margin (%)
2004-05 2005-06 2006-07 2007-08
18.6
9
17.3
4
15.5
7
16.0
6
EBITDA margin (%)
2004-05 2005-06 2006-07 2007-08
214.
67
103.
25
73.9
5
75.5
9
Hindusthan National Glass & Industries Limited I Annual Report 2007-08 I 8
“The completion of a recordyear in our history is arelevant time to do threespecific things. Outline our vision. Explain how we expect toget there. And identify all the short-term initiatives that willmake the journey and thedestination a reality.”
Chairman’s strategy
Hindusthan National Glass & Industries Limited | 9
The visionAt HNGIL, our vision is to retain our dominant position in a
growing India, expand into other countries and emerge among
the 10 largest container glass manufacturers in the world.
The journeyAt HNGIL, this vision is realistic and indeed achievable for a
number of reasons, as we expect to:
� Capitalise on the accelerating relocation of glass-
manufacturing capacities from the developed to the developing
countries
� Enhance exports out of India and enter low-cost
manufacturing geographies proximate to large markets
� Acquire large distribution companies with an impressive list
of customers on the one hand, and competent capabilities in
the management of logistics on the other
There is an interesting evolution in the marketplace that makes
the complement of these priorities relevant and important. An
increasing number of customers now negotiate for bottles on
the delivered cost basis; much of the delivery is just-in-time
and there is a growing customer requirement for
comprehensive packaging solutions as, opposed to the
standalone bottle supply.
This increasing need for holistic packaging solutions is a
reflection of the growing influence of the softer side of the
business. No longer are bottle manufacturers merely required to
produce and dispatch; progressive bottle manufacturers like us
are required to co-ordinate with label and cap manufacturers to
ensure that there is a neat fit across the respective products,
enhancing customer convenience. Besides, bottle
manufacturers like us are also required to extend our focus
beyond the physical attributes of the bottle to the efficiency with
which it works on the customer’s filling line. As a result, the
appraisal of a bottle manufacturer’s competence has evolved
from the product as it is to service as it can be.
There are strong reasons for why this environment is likely to
persist.
One, most of our customers lack expertise in converging bottle
design and filling-line efficiency.
Two, there is a growing emphasis on the need to enhance
productivity and generate a superior return on the employed
capital, warranting integrated working between the bottle
manufacturer and the Company.
Three, there is a growing emphasis on aesthetics as a
competitive differentiator, requiring close co-product
development between customers and bottle manufacturers.
Four, a growing number of customers are looking at the overall
cost of packaged solutions, making it imperative for companies
like ours to work closely with label and cap manufacturers in
the area of cost management as well as effective packaging
solutions, promising content integrity.
The initiativesAt HNGIL, we are investing extensively to enhance our
preparedness for this evolving and challenging industry
environment.
� We acquired four units in the recent past and will continue to
do so if they enhance our competitive edge geographic
location, customer acquisition or production costs
� We will leverage our existing relationships with large multi-
national customers and service their growing needs in other
countries with supplies being made out of our facilities in India
� We will bring the most modern management practices into
play to enhance production, reduce cost and strengthen overall
efficiency
� We will strengthen our capacity in equipment manufacture
and emerge as a serious industry supplier
We expect that the implementation of these initiatives will
enhance our capacities, strengthen our draw-to-pack ratio,
enrich our margins, enhance our respect and graduate us from
the largest in India to one of the largest in the world.
C.K. Somany
Chairman
10 | Hindusthan National Glass & Industries Limited
Hindusthan National Glass & Industries Limited | 11
OUR BRANDSTARTS WITH
INNOVATIONHandsome is what handsome does. Our brand is clearly reflected in what we do for our
customers. Protect contents. Reduce costs. Enhance appeal. The last point is
particularly relevant. What we make must look good on retail shelves. What we make
must enhance impulsive purchase. What we make must strengthen the business of our
customers. Through an innovative combination of shape, colour, texture, shine, weight,
emboss and strength. As when we created the Magic Moments vodka bottle for
Radico, one of our leading customers. The aesthetically designed bottle beat the
competitive clutter of a crowded marketplace. The product acquired brand equity, recall
and market share with speed. Strengthening brand profitability. Enhancing customer
viability. Reinforcing client relationships.
12 | Hindusthan National Glass & Industries Limited
Hindusthan National Glass & Industries Limited | 13
OUR BRAND IS CATALYSED BY
SCALEAnytime anywhere. When it comes to an increasing requirement of bottles, few words in
our business sound sweeter to our customers. Because when a customer experiences
growing offtake, the last thing he wants to be told is that capacity is limited. Because
the assurance of anytime availability encourages customers to focus on growing their
businesses rather than worry about raw material security. Because when a brand is
being contemplated, customers need the assurance that bottles will be supplied
continuously and just-in-time anywhere across the country. HNGIL is competently
placed to build on this reality. We have grown our capacity (organically and
inorganically) by 80.07% since the turn of the century. We possess six manufacturing
plants located across the country – Rishikesh in the north to Pondicherry in the south,
Nashik in the west to Rishra in the east. We can deliver bottles just in time, minimising
the need for customers to nurse inventory. Making us a preferred choice for growing
customer brands.
Increasing our revenues through decades-rich partnerships reinforced by enduring
client relationships.
14 | Hindusthan National Glass & Industries Limited
Hindusthan National Glass & Industries Limited | 15
OUR BRAND ISENRICHED BY
KNOWLEDGE Knowledge. We are recognised not only as the largest container glass manufacturer in
India but also the most knowledgeable. Attracting the best glass technologists in the
country. Possessing an insight into technologies. Assets. Productivity. People
management. We leveraged a complement of these realities most visibly in 2007-08,
when we acquired the defunct 140 TPD Neemrana unit of Haryana Sheet Glass. When
we brought in competencies from our other plants. When we took a calculated initiative
in retrofitting assets rather than replacing. When we rolled out our first tonne of output
within only five months of acquisition compared with the industry expectation of eight.
When we transformed what was dismissed as a hopeless case into one of the most
remarkable turnarounds in the container glass industry in recent years.
16 | Hindusthan National Glass & Industries Limited
Hindusthan National Glass & Industries Limited | 17
OUR BRAND ISREFLECTED IN THE
NUMBERSProfitability. This is the living testimony of a vibrant brand. Giving rise to some evident
truths. One, the best brands are the most profitable. Two, the best brands always
increase their profitability. HNGIL is proof. We enhanced the return on our employed
capital by 356 bps from 12.07% in 2006-07 to 15.63% in 2007-08. Reinforced our
EBIDTA margin from 17.34% to 18.69% across the period. Strengthened our book value
from Rs 175.80 to Rs 433.70. Reduced our gearing from 1.28 to 0.55. Enhanced our
interest cover from 5.41 to 9.15. Reported an EVA of Rs 72.06 crore, indicating that we
more than met shareholder expectations during 2007-08.
WHY GLASS?
OUR STRENGTHSIntellectual capital: The experience of
five decades in the holistic
understanding of container glass,
comprising financial, technology,
operational, marketing and people
management competencies
Turnaround expertise: A demonstrated
capability in turning around losing units,
reflected in the rehabilitation of sick units
acquired from Owens Brockway at
Pondicherry and Rishikesh, the Nashik
unit (acquired from Larsen & Toubro)
and the Neemrana unit (acquired from
Haryana Sheet Glass)
Financial depth: A balance sheet size of
Rs 1,194.36 crore (ex revaluation
reserves) with a debt-equity ratio of only
0.55 and cash-bank balances of Rs
16.79 crore (as on March 31, 2008)
Capacity: An installed capacity of 2575
TPD – over 50% of the organised
industry capacity in India.
Brand: A distinctive brand recall of
enhancing customer viability through a
complement of product and service
Customers: Institutional customers in
India comprising prominent multinational
and Indian customers as well as more
than 40 international customers
Vertical presence: A prudent mix of
rapidly growing sectors comprising
liquor, beer, food processing,
pharmaceuticals, household and
personal care
Pan-India presence: A manufacturing
presence in East, North, West and South
India, facilitating quicker customer
deliveries
� Glass is 100% recyclable many times
over without any quantity loss
� Glass is cost-efficient; it is reused and
refilled 30-50 times before being recycled
� Glass containers go from the recycling
bin to the store shelf in as little as 30
days; an estimated 80% of recovered
glass containers are made into new glass
bottles
� Glass preserves content purity and
flavour as it is chemically inert
� Glass packaging is impermeable,
air-tight and transparent; one can see the
freshness of food and beverages before
purchase
� Glass packaging can handle vacuum
or high-pressure sealing, safeguarding
against moisture and oxygen invasion
and protecting from spoilage and
bacteria
Hindusthan National Glass & Industries Limited | 19
� Glass can be customised to absorb
damaging ultraviolet light, ensuring
product purity and taste
� Glass has an inherently longer shelf life
than any packaging material
� Glass is non-porous and impermeable,
so there are no interactions between
glass packaging and products to affect
the flavour of food and beverages
� Glass does not deteriorate, corrode,
stain or fade, so products inside remain
as fresh as when they were bottled
� Glass is made from domestically
plentiful, non-toxic raw materials; it is
FDA-approved
� Glass provides a more aesthetic
solution than plastic packaging
� Glass can store a larger range of
products (packaged food, soft drinks,
medicines and liquor, among others)
than most packaging materials
� Glass provides varied and dynamic
labelling options (applied ceramic, heat
transfer, shrink labelling and engraving)
Promoter interest: A significant equity
holding by the promoter group, reflecting
a high commitment to the business
Efficiency: One of the highest draw-to-
pack ratios among container glass
manufacturers in India today
Integrated: Comprehensive solution
provider, extending from design to
production to delivery to technical
solutions, plus the ability to fabricate
equipment
Market share: A market share in excess
of 65% for container glass in India today.
A market-leading presence across all
segments except pharmaceuticals
Global footprint: A sales presence
across 23 countries today
Competitiveness: A low capital cost per
tonne in an industry marked by a high
cost of capacity creation, deterring fresh
competition
Relationships: Relationship-driven
business model marked by a significant
amount of the revenues in 2007-08 being
derived from customers working with the
Company for more than a decade
Governance: A commitment to
governance reflected in a sizable
representation of Independent Directors
on the Company’s Board
Value-addition: A focus on research-led
innovation (process and product)
resulted in value-added services to
customers and growing realisations
20 | Hindusthan National Glass & Industries Limited
10-y
ear p
erfo
rman
ce tr
end
BA
LAN
CE
SH
EE
T31
.03.
2008
31.0
3.20
0731
.03.
2006
31.0
3.20
0531
.03.
2004
31.0
3.20
0331
.03.
2002
31.0
3.20
0131
.03.
2000
31.0
3.19
99S
OU
RC
ES
OF
FUN
DS
: S
hare
hold
ers
Fund
sS
hare
Cap
ital
1,74
6.77
1,
104.
35
1,10
4.35
1,
104.
35
1,10
4.35
1,
104.
35
1,10
4.35
1,
104.
33
1,10
4.30
73
6.24
R
eser
ves
& S
urpl
us84
,612
.65
21,6
98.6
5 19
,068
.59
17,3
12.6
8 14
,642
.25
12,7
93.3
3 12
,872
.11
13,8
10.1
3 13
,107
.81
11,8
59.5
3 86
,359
.42
22,8
03.0
0 20
,172
.94
18,4
17.0
3 15
,746
.60
13,8
97.6
8 13
,976
.46
14,9
14.4
6 14
,212
.11
12,5
95.7
7 Lo
an F
und
sS
ecur
ed L
oans
28,7
42.9
6 17
,885
.09
15,6
56.3
1 15
,724
.65
12,9
39.9
6 12
,647
.31
11,3
35.6
0 10
,170
.75
7,49
9.30
7,
558.
16
Uns
ecur
ed L
oans
13,1
27.6
1 6,
883.
77
9,06
3.45
5,
250.
96
2,84
8.54
5,
287.
93
2,55
7.02
4,
158.
47
1,25
0.29
86
4.25
41
,870
.57
24,7
68.8
6 24
,719
.76
20,9
75.6
1 15
,788
.50
17,9
35.2
4 13
,892
.62
14,3
29.2
2 8,
749.
59
8,42
2.41
12
8,22
9.99
47
,571
.86
44,8
92.7
0 39
,392
.64
31,5
35.1
0 31
,832
.92
27,8
69.0
8 29
,243
.68
22,9
61.7
0 21
,018
.18
Def
erre
d Ta
x Li
abili
ties
(Net
)1,
807.
52
4,53
2.10
4,
341.
62
4,01
6.99
3,
550.
18
2,23
7.81
1,
860.
79
––
–To
tal:
130,
037.
51
52,1
03.9
6 49
,234
.32
43,4
09.6
3 35
,085
.28
34,0
70.7
3 29
,729
.87
29,2
43.6
8 22
,961
.70
21,0
18.1
8 A
PP
LIC
ATI
ON
OF
FUN
DS
:Fi
xed
Ass
ets
Gro
ss B
lock
125,
746.
20
55,9
62.5
5 53
,403
.52
47,2
41.5
4 40
,306
.78
37,9
60.1
6 32
,845
.85
30,7
69.3
5 24
,770
.69
21,4
56.9
7 Le
ss: D
epre
ciat
ion
41,0
31.4
2 22
,471
.78
20,4
27.1
3 18
,649
.16
16,1
45.9
6 13
,771
.42
12,3
98.2
7 10
,986
.02
9,48
9.44
8,
134.
17
Net
Blo
ck84
,714
.78
33,4
90.7
7 32
,976
.39
28,5
92.3
8 24
,160
.82
24,1
88.7
4 20
,447
.58
19,7
83.3
3 15
,281
.25
13,3
22.8
0 C
apita
l Wor
k in
Pro
gres
s4,
510.
70
3,65
2.61
1,
841.
94
2,81
0.34
2,
211.
13
527.
33
502.
99
1,52
9.52
1,
398.
14
2,81
8.69
In
vest
men
ts11
,458
.50
1,08
7.21
86
.21
80.7
7 96
.43
101.
04
101.
04
85.9
4 66
.04
66.0
4 C
urre
nt A
sset
s, L
oans
and
Ad
vanc
es
Cur
rent
Ass
ets
Inve
ntor
ies
16,4
14.9
7 9,
332.
82
10,1
28.7
1 8,
694.
99
6,48
5.38
7,
275.
19
6,66
1.71
5,
980.
11
6,11
1.32
3,
374.
21
Sun
dry
Deb
tors
16,4
49.6
3 8,
976.
90
9,21
6.63
9,
272.
38
7,42
6.70
6,
152.
54
6,02
9.18
5,
674.
30
4,33
3.06
3,
787.
94
Cas
h an
d B
ank
Bal
ance
s1,
678.
98
63.9
6 13
6.56
27
3.18
14
7.28
20
5.81
24
2.45
71
.39
87.4
9 17
9.70
Lo
ans
and
Adv
ance
s13
,654
.98
4,74
1.43
3,
098.
84
3,31
7.26
2,
331.
81
1,73
6.58
2,
019.
34
3,07
1.76
2,
636.
45
2,93
8.18
48
,198
.56
23,1
15.1
1 22
,580
.74
21,5
57.8
1 16
,391
.17
15,3
70.1
2 14
,952
.68
14,7
97.5
6 13
,168
.32
10,2
80.0
3 Le
ss:
Cur
rent
Lia
bili
ties
and
Pro
visi
ons
Cur
rent
Lia
bilit
ies
14,8
57.6
7 7,
077.
93
7,30
6.02
7,
750.
14
6,12
0.73
5,
218.
91
4,89
8.37
4,
870.
74
4,95
4.23
3,
455.
30
Pro
visi
ons
3,98
7.36
2,
163.
81
944.
94
1,88
1.53
1,
653.
54
979.
47
1,37
6.05
2,
081.
93
1,99
7.82
2,
014.
08
18,8
45.0
3 9,
241.
74
8,25
0.96
9,
631.
67
7,77
4.27
6,
198.
38
6,27
4.42
6,
952.
67
6,95
2.05
5,
469.
38
Net
Cur
rent
Ass
ets
29,3
53.5
3 13
,873
.37
14,3
29.7
8 11
,926
.14
8,61
6.90
9,
171.
74
8,67
8.26
7,
844.
89
6,21
6.27
4,
810.
65
Mis
cella
neou
s E
xpen
ditu
re(T
o th
e ex
tent
not
writ
ten
off o
r adj
uste
d)–
––
––
81.8
8 –
––
–To
tal:
130,
037.
51
52,1
03.9
6 49
,234
.32
43,4
09.6
3 35
,085
.28
34,0
70.7
3 29
,729
.87
29,2
43.6
8 22
,961
.70
21,0
18.1
8
Rs
in L
acs
Hindusthan National Glass & Industries Limited | 21
NE
T IN
CO
ME
STA
TEM
EN
T31
.03.
2008
31.0
3.20
0731
.03.
2006
31.0
3.20
0531
.03.
2004
31.0
3.20
0331
.03.
2002
31.0
3.20
0131
.03.
2000
31.0
3.19
99IN
CO
ME
S
ales
(Gro
ss)
114,
833.
90
59,5
39.6
8 47
,489
.05
47,0
55.5
5 43
,601
.45
30,0
53.9
8 27
,942
.14
23,2
30.8
2 16
,450
.10
18,2
02.5
6 Le
ss E
xcis
e D
uty
12,7
04.2
1 7,
653.
59
6,15
1.46
6,
167.
06
5,91
0.19
4,
118.
67
3,58
0.84
3,
112.
57
640.
07
134.
77
102,
129.
69
51,8
86.0
9 41
,337
.59
40,8
88.4
9 37
,691
.26
25,9
35.3
1 24
,361
.30
20,1
18.2
5 15
,810
.03
18,0
67.7
9 O
ther
Inco
me
1,11
3.96
61
9.43
58
3.84
93
0.61
47
6.36
56
6.58
39
5.33
23
6.75
16
1.49
28
0.00
In
crea
se/(
Dec
reas
e) in
Sto
ck(4
24.8
6)(3
21.9
2)74
8.19
1,
617.
38
(1,3
27.5
7)54
6.47
(6
9.46
)(6
48.6
5)2,
446.
23
(879
.49)
102,
818.
79
52,1
83.6
0 42
,669
.62
43,4
36.4
8 36
,840
.05
27,0
48.3
6 24
,687
.17
19,7
06.3
5 18
,417
.75
17,4
68.3
0 E
XP
EN
DIT
UR
EM
ater
ials
29,2
51.6
1 14
,877
.35
12,7
34.9
0 11
,693
.17
9,07
7.77
7,
274.
33
6,53
4.68
4,
751.
32
4,69
9.03
5,
081.
90
Man
ufac
turin
g an
d O
ther
Exp
ense
s52
,100
.07
26,9
81.3
8 22
,539
.57
24,1
83.9
4 20
,615
.69
15,8
77.9
2 14
,088
.00
11,8
41.8
4 10
,818
.60
10,1
20.8
8 81
,351
.68
41,8
58.7
3 35
,274
.47
35,8
77.1
1 29
,693
.46
23,1
52.2
5 20
,622
.68
16,5
93.1
6 15
,517
.63
15,2
02.7
8 P
rofit
Bef
ore
Dep
reci
atio
n,21
,467
.11
10,3
24.8
7 7,
395.
15
7,55
9.37
7,
146.
59
3,89
6.11
4,
064.
49
3,11
3.19
2,
900.
12
2,26
5.52
In
tere
st a
nd T
axD
epre
ciat
ion
7,29
3.97
3,
550.
43
3,21
1.43
2,
797.
79
2,42
4.26
2,
019.
82
1,48
4.70
1,
532.
67
1,67
1.32
99
8.06
Tr
ansf
erre
d fro
m R
eval
uatio
n R
eser
ve(2
81.2
1)(2
37.9
8)(2
61.1
3)(2
74.8
0)(2
80.3
0)(2
85.0
1)(2
90.8
2)(2
93.6
9)(3
82.7
3)(3
97.3
3)7,
012.
76
3,31
2.45
2,
950.
30
2,52
2.99
2,
143.
96
1,73
4.81
1,
193.
88
1,23
8.98
1,
288.
59
600.
73
Inte
rest
and
Fin
anci
al E
xpen
ses
2,34
6.87
1,
909.
68
1,44
0.54
1,
111.
21
1,17
4.76
1,
401.
65
1,38
9.23
71
7.46
1,
006.
10
925.
97
9,35
9.63
5,
222.
13
4,39
0.84
3,
634.
20
3,31
8.72
3,
136.
46
2,58
3.11
1,
956.
44
2,29
4.69
1,
526.
70
Pro
fit b
efor
e Ta
x12
,107
.48
5,10
2.74
3,
004.
31
3,92
5.17
3,
827.
87
759.
65
1,48
1.38
1,
156.
75
605.
43
738.
82
Less
: Pro
visi
on fo
r Inc
ome
Tax
-Cur
rent
–1,
506.
25
480.
00
307.
66
299.
07
70.6
0 18
7.14
98
.00
70.0
0 75
.00
-Ear
lier Y
ears
(1,2
99.8
2)(3
6.46
)(2
14.8
0)–
––
––
––
-Def
erre
d(2
,663
.49)
190.
48
324.
63
466.
81
1,31
2.38
37
7.02
54
1.68
–
––
-Frin
ge B
enef
it Ta
x36
.90
18.0
1 19
.21
––
-
––
––
Pro
fit a
fter
Tax
16,0
33.8
9 3,
424.
46
2,39
5.27
3,
150.
70
2,21
6.42
31
2.03
75
2.56
1,
058.
75
535.
43
663.
82
Add
: Bal
ance
Bro
ught
forw
ard
705.
57
907.
01
599.
85
870.
78
708.
18
958.
37
1,49
0.38
59
3.09
10
7.66
17
5.56
from
last
yea
r A
dd: T
rans
fer f
rom
Deb
entu
re
rede
mpt
ion
rese
rve
––
–16
6.67
33
.33
––
(100
.00)
(50.
00)
(50.
00)
Am
ount
Ava
ilabl
e fo
r App
ropr
iatio
n16
,739
.46
4,33
1.47
2,
995.
12
4,18
8.15
2,
957.
93
1,27
0.40
2,
242.
94
1,55
1.84
59
3.09
78
9.38
A
PP
RO
PR
IATI
ON
SG
ener
al R
eser
ve14
,850
.00
3,49
9.98
1,
999.
97
3,49
9.96
1,
999.
95
499.
93
1,22
9.35
–
–60
0.00
P
ropo
sed
Div
iden
d on
Equ
ity S
hare
s69
8.71
11
0.43
77
.30
77.3
0 77
.30
55.2
2 55
.22
55.2
2 –
73.6
2 Ta
x on
Pro
pose
d D
ivid
end
118.
75
15.4
9 10
.84
10.8
4 9.
90
7.07
–
6.24
–
8.10
C
ess
on D
ivid
end
perta
inin
g to
pre
viou
s ye
ar–
–0.
20
––
––
––
Bal
ance
Car
ried
to B
alan
ce S
heet
1,07
2.00
70
5.57
90
7.01
59
9.85
87
0.78
70
8.18
95
8.37
1,
490.
38
593.
09
107.
66
16,7
39.4
6 4,
331.
47
2,99
5.12
4,
188.
15
2,95
7.93
1,
270.
40
2,24
2.94
1,
551.
84
593.
09
789.
38
Rs
in L
acs
22 | Hindusthan National Glass & Industries Limited
Directors’ Report
We take pleasure in presenting the 62nd Annual Report on the business and operations of your Company, together with the audited
accounts for the year ended March 31, 2008.
Financial highlights
OperationsPursuant to the scheme of amalgamation and reorganisation of
capital under Sections 391 to 394 of the Companies Act, 1956,
(Scheme) with effect from April 1, 2006, Ace Glass Containers
Limited (AGCL) has been merged with your Company.
Consequent to this, the performance of the previous year is not
comparable with the current year. However, even on comparable
basis (without considering the impact of the merger), your
Company has performed well, achieving a 21% growth in revenue
(previous year 25%). PBIT and PBT have also shown a growth of
34% and 78%, respectively (previous year 40% and 70%).
Your Company is entitled, pursuant to sanctioning of the scheme,
Rs in lac
Year ended 31.3.2008 Year ended 31.3.2007
Gross sales (including excise duty) 1,14,834 59,540
Profit before interest, depreciation and tax 21,467 10,325
Interest and finance charges 2,347 1,910
Profit before depreciation and tax 19,120 8,415
Depreciation 7,013 3,312
Profit before tax 12,107 5,103
Provision for tax 37 1,524
Provision for deferred tax (2,664) 191
Tax for earlier year (1,300) (3,927) (36) 1,679
Profit after tax 16,034 3,424
Balance brought forward from previous year 706 907
Amount available for appropriation 16,740 4,331
Appropriation
General reserve 14,850 3,500
Proposed dividend 699 110
Tax on dividend 119 15,668 15 3,625
Balance carried forward to next year 1,072 706
Hindusthan National Glass & Industries Limited | 23
for the tax benefit under Section 72A of the Income Tax Act, 1961;
the tax charges in this year have accordingly been worked out.
DividendIn view of the robust growth in the performance of your Company,
the Directors recommend a dividend of 40% i.e. Rs 4 per equity
share for the current year.
AmalgamationA scheme of amalgamation of Ace Glass Containers Limited with
your Company was sanctioned by the Hon’ble High Courts of
Delhi and Calcutta on March 19, 2008 and April 7, 2008
respectively. The Order of the Hon’ble High Courts were filed with
the respective Registrar of Companies on April 28, 2008. As a
result of the said amalgamation, your Company has achieved
synergy in its operations coupled with more financial leverage.
In terms of Scheme of Amalgamation, 2141448 shares and
4282897 shares (totalling to 6424345 shares) would be allotted
to HNG Trust and Ceramic Decorators Limited respectively. Out
of 4282897 shares allotted to Ceramic Decorators Limited,
1606087 shares are to be under lock-in for a period of 3 years
from the date of their listing at the Bombay Stock Exchange. It
may be mentioned that pursuant to the Scheme of
Amalgamation, 1368872 shares are allotted to Ace Trust.
It is imperative to mention that your Company is beneficiary of
both the above Trusts. In terms of an undertaking given to the
Bombay Stock Exchange, your Company is required to make
disclosures pertaining to utilisation of proceeds of shares allotted
to the above said Trusts until they are extinguished.
ReviewDuring the year, your Company acquired the assets of a glass
container plant located at Neemrana, revamped it and
commenced commercial production from March 2008. The
capital expenditure was financed through long-term borrowings
and internal accruals.
Future outlookThe Indian economy has continued to show a robust growth
during the financial year 2007-08 and the same trend is expected
to continue. Growing disposable income coupled with a change
in the demographic pattern of the population will create more
demand for packaged goods, creating better opportunities for
the Company. The growth in beer, pharmaceutical, food, liquor
and other high-end sectors will drive the growth in the revenue
and profitability of the Company. Your Company continues to
maintain a commanding market share and is equipped to grow
with the expanding market.
DirectorsShri R. K. Daga, Shri Dipankar Chatterji and Shri C. K. Somany,
retire by rotation from the Board of Directors of the Company at
the ensuing Annual General Meeting, and being eligible, have
offered themselves for re-appointment.
Fixed depositsYour Company has not accepted any deposits from the public
within the meaning of Section 58A of the Companies Act, 1956.
Consolidated financial statementsConsolidated financial statements prepared in accordance with
Accounting Standard 21, read with Accounting Standard 23 and
issued by the Institute of Chartered Accountants of India, forms
an integral part of the Annual Report and accounts.
DerivativeThe Company has challenged the validity and legality of a
derivative transaction with Kotak Mahindra Bank Limited. The
matter is sub-judice. Based on the legal advice received, the
contract is void and not tenable. The loss in respect of the said
transaction is indeterminable.
Auditors reportThe Auditors Report read along with Notes on Accounts is self-
explanatory and therefore, does not call for any further comment
under Section 217(3) of the Companies Act, 1956.
24 | Hindusthan National Glass & Industries Limited
Listing on stock exchangesThe Equity Shares of the Company continue to be listed on the
Bombay Stock Exchange Ltd., and the Calcutta Stock Exchange
Association Ltd. The annual listing fees for the year 2007-08 have
been paid to these exchanges.
AuditorsM/s Lodha & Company, Chartered Accountants, statutory
auditor of the Company retire at the conclusion of the ensuing
Annual General Meeting and have confirmed their eligibility and
willingness to accept the office of the statutory auditor, if re-
appointed.
M/s Singhi & Company, Chartered Accountants, have confirmed
their eligibility and willingness to accept the office of the Branch
Auditors of the Company’s units located at Nashik, Pondicherry
and Rishikesh, if appointed.
Directors’ responsibility statement pursuantto Section 217(2AA) of the Companies Act,1956The Directors hereby confirm:
i) that in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper
explanations related to material departures;
ii) that the Directors had selected such accounting policies and
applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at the
end of the financial year ended on March 31, 2008 and of the
profit of the Company for the year ended on March 31, 2008;
iii) that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance
with the provisions of this Act for safeguarding the assets of
the Company and for preventing and detecting fraud and
other irregularities;
iv) that the Directors had prepared the annual accounts on a
‘going concern’ basis.
Corporate GovernanceThe report on Corporate Governance along with the Certificate
of the auditors M/s Lodha & Co., Chartered Accountants,
confirming the compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing
Agreement entered by the Company with the stock exchanges
forms an integral part of the Annual Report.
Subsidiary companiesParticulars relating to the existing subsidiary companies as
required under Section 212 of the Companies Act, 1956, are
annexed hereto and forms an integral part of the Annual Report.
The consolidated financial statements presented by the
Company include the financial information of its subsidiaries.
ExportDuring the current financial year, direct export turnover was
Rs 4032 lac, compared with Rs 2203 lac achieved during the
preceding year.
Industrial relations and personnelThe Company has taken significant steps towards strengthening
human resource and developing the human resource system,
during the year under review. Industrial relations in the Company
continued to remain cordial and peaceful except for some labour
unrest at the Nashik unit, which has since been resolved.
Statement of employees Statement of particulars of employees as required under Section
217(2A) of the Companies Act, 1956, and rules framed
thereunder forms an integral part of this report.
Conservation of energy, technology absorptionand foreign exchange earning and outgoThe statement containing the required particulars under Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors)
Rules, 1988, are annexed hereto and forms an integral part of
this report.
AcknowledgmentsThe Directors commend the continued commitment and
dedication of the employees at all levels. The Directors also wish
to acknowledge efforts of all the other stakeholders for their
valuable sustained support and encouragement. It is this unity of
purpose that breeds success and your Directors look forward to
receiving similar support and encouragement from the larger
HNGIL family in the years ahead.
For and on behalf of the Board
Kolkata C.K. Somany
June 25, 2008 Chairman
Hindusthan National Glass & Industries Limited | 25
Directors’ ReportAnnexure to the
Information pursuant to Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 and forming a part of the Directors’ Report for the year ended March 31, 2008.
I. Conservation of energy
Energy conservation measures taken:
1. Two IS machines were upgraded for maintaining the draw at the optimum level of the furnace for better energy efficiency.
2. Use of VFD in return Cullet Conveyor, in Cullet Yard, reject Cullet Conveyor in Cold End, thereby saving electrical energy.
3. Providing chute in sand silos and cullet silos, eliminating feeding conveyors, thereby saving electrical energy and also
eliminating dusting issues.
Form ADisclosure of particulars with respect to conservation of energy
Particulars Unit Year ended 2007-08 Year ended 2006-07
A. Power and fuel consumption
1. Electricity
a) Purchased unit 000 KWH 1,52,102 69,273
Total amount Rs lac 5,424.10 2,385.49
Average rate/unit Rs 3.57 3.44
b) Own generation
Through diesel/H.P.S oil generation
By generator unit 000 KWH 17,531 55,255
Units per litre of oil 4.31 4.04
Average rate/unit Rs 5.58 4.08
c) Own generation (through L.D.O.)
By generator unit 000 KWH 15,490 678
Units per litre of oil 3.73 3.00
Average rate/unit Rs 4.81 9.82
d) Own generation (through LNG)
Unit KWH 4,25,44,484 93,86,050
Units per litre of MMBTU of LNG Rs lac 106.64 104.94
Average rate/unit Rs 2.22 2.12
2. F-Oil / RFO
Quantity KL 51,809 29,159
Total amount Rs lac 9,856.65 4,637.21
Average rate/unit Rs 19,025 15,903
26 | Hindusthan National Glass & Industries Limited
Particulars Unit Year ended 2007-08 Year ended 2006-07
3. L.N.G.
Quantity MMBTU 17,12,334 13,29,208
Total amount Rs lac 4,052.35 2,956.90
Average rate/unit Rs 234 222
4. i) L.P.G.
Quantity MT 8,421 3,926
Total amount Rs lac 2,998.09 1,251.68
Average rate/unit Rs 35,602 31,882
ii) L.D.O.
Quantity KL 7.54 279
Total amount Rs lac 2.29 82.06
Average rate/unit Rs 30,348 29,425
iii) H.S.D.
Quantity KL 1,477 113
Total amount Rs lac 425.29 34.82
Average rate/unit Rs 28,801 30,866
iv) H.P.S. oil
Quantity KL 20,882 13,060
Total amount Rs lac 4,439.64 2,103.98
Average rate/unit Rs 21,261 16,109
B. Consumption per unit of production
Electricity KWH 329 351
L.P.G. KG 12.18 10.24
L.D.O. LTR 0.01 0.73
F-Oil/RFO/Equv.Oil LTR 74.94 76.07
LNG MMBTU 2.48 3.47
H.S.D LTR 2.14 0.29
H.P.S. LTR 30.20 34.07
Hindusthan National Glass & Industries Limited | 27
Form B
II. Technology absorption A. Research and Development (R&D)
Research & Development continues to remain a focal point
in our efforts towards improvement. Energy consumption
and absorption have been principal areas of action. As the
Company does not have any exclusive R&D facilities, it
carries out its developmental activities for process innovation
and product development as a part of its business process.
Recently, the Company has set-up a separate technical wing
to focus on the technology development area with respect to
process and products.
B. Technology absorption, adaptation and innovation
Enumerated below are steps taken by the Company towards
technology absorption, adaptation and innovation:
Specific areas of development
� Setting up of a totally computerised, on-line oxygen
monitoring and control system in one furnace leading to fuel
saving and reduction in NOx levels
� With spiralling price hikes in fuels and soda ash, the only
way to counter cost-increase is by increasing the forming
speeds. Various measures/decisions were taken to achieve
the said objective:
a) Installation of the latest pantographic baffle mechanism
to reduce down-time.
b) Installation of two-way air operated funnel mechanisms to
reduce down-time.
c) Blow-side vacuum installed to improve body finish.
� Light-weighting continues to be our effort line to remain
competitive with other packing alternatives. The Company
has commercialised the NNPB process for achieving this
target
� Installation of a servo shear mechanism has reduced the
consumption of compressed air and minimised the shear
cutting trouble at high speeds to reduce defects like shear
cutting mark, thus improving the quality of the product
� Installed graphodical shear spray bar to reduce the
consumption of RO water
� Vacuum pump has been installed in all the IS machines for
improving air compression at the Rishikesh plant
C. Future plans of action
Your Company continues to work on such implementations
as stated earlier and after successful implementation of one
line at a particular plant, the same system are implemented
at various lines across different plants. The reduction in
energy cost through better technology and process
development remains our focal point.
D. Expenditure on R&D
During the year, expenditure incurred on research and
development are as enumerated below: (Rs in lac)
2007-08
a. Capital –
b. Recurring 7.91
c. Total 7.91
d. Total R&D expenditure as a percentage
of the turnover Negligible
III. Foreign exchange earnings and outgo:Your Company is constantly looking for foreign markets and
at present it has a strategic presence in the overseas markets
of Bangladesh, USA, South Africa, Kenya, Australia and
Hong Kong, to name a few. The foreign exchange earning
and outgo of the Company is as enumerated below.
(Rs in lac)
2007-08 2006-07
(i) Earnings in foreign exchange
(excluding indirect exports of
Rs 3,009.80 lac; previous year
Rs 969.98 lac and exports to
Nepal Rs 169.19 lac; previous
year Rs 114.40 lac) 4,032.46 2,203.03
(ii) Expenditure incurred in foreign
exchange:
1. Raw materials 5,698.52 4,335.33
2. Capital goods 1,939.26 3,231.02
3. Components, spare parts &
repairs 1,497.50 895.57
4. Other expenses 272.24 169.45
For and on behalf of the Board
Kolkata C.K. Somany
June 25, 2008 Chairman
28 | Hindusthan National Glass & Industries Limited
To whom it may concern
The Board of Directors, at its meeting held on October 31, 2005 had appointed Mr Sanjay Somany (Managing Director), Mr Mukul
Somany (Joint Managing Director) as Chief Executive Officers (CEO) of the Company for a period of five years. Further, the Board of
Directors, at its meeting held on June 25, 2008 has appointed Mr R. R. Soni, Senior President as the Chief Financial Officer (CFO) of
the Company.
Pursuant to Clause 49 of the Listing Agreement we, Sanjay Somany, Mukul Somany and R. R. Soni, hereby certify to the Board of
Directors of Hindusthan National Glass & Industries Limited that:
(a) We have reviewed the financial statements and the cash flow statement for the year 2007-08 and that to the best of our knowledge
and belief:
(i) These statements do not contain any materially untrue statements or omit any material fact or contain statements that might
be misleading;
(ii) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting
standards, applicable laws and regulations.
(b) There are, to the best of our knowledge and belief, no transactions entered into, by the Company during the year 2007-08, which
are fraudulent, illegal or violative of the Company’s code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and have evaluated the
effectiveness of internal control systems of the Company pertaining to financial reporting. We have disclosed to the auditors and
the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps
they have taken or propose to take to rectify these deficiencies.
(d) We have indicated to the auditors and the Audit Committee:
(i) Significant changes in internal control over financial reporting during the year 2007-08;
(ii) Significant changes in accounting policies during the year 2007-08 and that the same have been disclosed in the notes to the
financial statements; and
(iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an
employee having a significant role in the Company’s internal control system over financial reporting.
R. R. Soni Mukul Somany Sanjay Somany
Senior President Joint Managing Director Managing Director
Chief Financial Officer (Chief Executive Officer) (Chief Executive Officer)
Hindusthan National Glass & Industries Limited | 29
Particulars of Employees In Terms of Section 217(2A) ofthe Companies Act, 1956
Sl. Name Age Qualification Date of & Designation Gross Last Employment
No. (Years) Experience in Appointment (Nature of Remuneration held
years Duties) (Rs) (Designation)
1 Mr Sanjay Somany 49 B. Com. 01.10.2000 Managing Director 1,13,33,918/- Glass Equipment
Dip. In Diesel Engg. (To Manage the (India) Ltd.
28 years affairs of the (Managing
Company on day Director)
to day basis)
2 Mr Mukul Somany 42 B. Com (Hons.) 01.04.1985 Jt. Managing Director 1,10,40,000/- None
21 years (To manage the
affairs of the
Company on day to
day basis)
3 Mr R R Soni* 49 B. Com., FCA 13.08.2007 Sr. President & 17,19,328/- Grasim
26 years Chief Financial Industries Ltd.
Officer Sr. Vice President
* Employed for part of the year and was in receipt of remuneration at the rate of not less than Rs 2,00,000/- per month.
Notes:
1. Remuneration includes Salary, Commission, and contribution to P.F, Gratuity and other facilities.
2. Mr C.K.Somany is related to both Mr Sanjay Somany and Mr Mukul Somany and both of them are also related to each other.
3. All appointments of the above employees are contractual.
For and on behalf of the Board
Sd/-
Kolkata C. K. Somany
June 25, 2008 Chairman
30 | Hindusthan National Glass & Industries Limited
Management discussion and analysis
Global industry perspectiveIn 2007, the global packaging industry was estimated at
US$410 billion; the glass segment comprised 8% with an
estimated size of around US$34 billion (Source: Glass
Packaging GIA Report). The hygienic product attributes had a
positive impact on the industry’s growth as organic consumers
rated glass six to eight points higher than competing
packaging materials in terms of environmental safety, flavour
retention, shelf life, form, purity and quality (Source: Newton
marketing survey).
Geographic growth
Region Total CAGR
volume sold 1998-2007
(in billion units) (in %)
North America 70 3.1
South America 46 5.5
Middle East and Africa 15 5.5
Europe 164 5.0
Asia Pacific 146 4.2
Indian perspectiveIndia’s Rs 60,000-crore packaging industry is growing at
around 15%. The glass segment accounts for around 10% of
the total packaging industry. The untapped potential of the
Indian market is reflected in a per capita glass consumption of
around 1.40 kg when compared with 5.9 kgs in China, 4.8 kgs
in Brazil, 10.2 kgs in Japan and around 27.5 kgs in the
developed countries of the West. The double-digit growth in
downstream segments, catalysed by enhanced branding, will
accelerate the industry growth.
Growth and requirements of the end-usersegments
Applications Type of glass Percentage
catering to
application
Beer Amber 70
Pharmaceutical ( < 60 ml) Amber 30
Indian made foreign liquor Flint 42
Soft drinks Flint 21
Pharmaceutical ( > 60 ml) Flint 21
Cosmetics Flint 6
(Source: www.indiamarkets.com)
Growth drivers Economy: GDP growth drives consumer offtake, which, in turn,
accelerates the demand for container glass. In this respect, the
economy has performed attractively: average 8.8% growth in
four years (2003-04 to 2006-07) with 9.6% (in 2006-07) being
the highest in 18 years followed by 9% in 2007-08. This makes
India the fastest-growing economy in the world and the
second-fastest growing country.
India’s glass industry
� Organised market with 18 players
� 80% of the production controlled by the top three players
� Installed capacity 14,66,000 tonnes per annum
� Production of around 11,10,400 TPA of flint glass bottles,
8,35,650 TPA of amber glass and 2,74,750 TPA of other glass
bottles
Hindusthan National Glass & Industries Limited | 31
GDP growth %
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
4.4 5.8 4.0 8.5 6.9 8.4 9.4 9
[Source: CSO]
Disposable incomes: India’s per capita income strengthened
from US$460 in 2000-01 to US$825.07 in 2007-08 [Source:
Central Statistical Organisation (CSO)], widening its middle-
class, influencing lifestyle changes, evolution from joint to
nuclear families, from single bread earners to working couples.
There has been a marked increase in the use of packaged
foods and beverages, benefiting the container glass industry.
India accounts for 6% of the world’s millionaire population
(Source: Survey by Capgemini SA and Merrill Lynch and Co.),
increasing by 20.5% to 1,00,015 in 2007-08, after Singapore’s
21.2% growth. The total annual income of Indian households is
predicted to grow from Rs 23.5 trillion in 2007 to almost Rs 90
trillion in 2025.
Rising per capita income (Rs)
2004-05 2005-06 2006-07 2007-08
Per capita income 23,890 25,696 27,784 29,786
(Source: Economic Survey 2007-08)
Changing demographics: The country houses the youngest
population in the world with one-fifth of the world’s under-24
population living here. Housing one of the highest proportions
of working population (aged 15 to 64) of around 62.9% in 2006
inevitably paved the path for growing consumerism. Population
in the consuming age bracket (defined as consumers in the 15-
64 age group) as a proportion of the total population has
grown from 61.4% in 1999 to 63.5% in 2004, and is likely to
grow to 65.2% by 2009. The increase in consuming population
coupled with the 1.8% increase in general population is likely to
create a sustained demand for packaged products.
Low-cost producer: India is a low-cost container glass
producer on account of a low relative cost of skilled labour. The
country possesses an abundant source of silica sand,
limestone, dolomite and feldspar. As a result, the cost of
production per pack of glass containers is comparatively lower
in India than abroad.
Capacity relocation: European and American container glass
capacities are being relocated to developing countries. India is
attractively placed to capitalise on this reality due to its
strategic geographical location. The landed price of our
container glass in Europe and the US is competitive with
alternative supplies from other country.
Demand-supply gap: The demand for glass containers
outweighs supply in India on account of growing downstream
consumer segments like food processing, liquor, beer and
pharmaceuticals growing at 20%, 12-16%, 15-20% and 6-8%,
respectively.
Consumption preference: Discerning customers are selecting
glass as a packaging option because it is a pure packaging
choice, the only packaging material for foods and beverages
that is chemically inert. Glass provides a barrier to oxygen and
moisture, protecting a product’s taste and shielding it longer
and better than any other packaging material. When a product
is packaged in glass, it communicates a premium image, taste
and quality.
Safety: Glass is the only packaging material categorised as
‘generally recognised as safe’ by the US Food and Drug
Administration.
Environment friendly: Glass is 100% recyclable. Glass bottles
don’t lose their quality, purity and clarity even after continual
recycling. They can go from recycling bin to the store shelf in
30 days. Using recycled glass (cullet) in the manufacturing
process saves raw materials, lessens energy demand and
reduces air emission. For each 10% of recycled glass used,
melting energy reduces by approximately 2.5%.
32 | Hindusthan National Glass & Industries Limited
Downstream industry driversFMCGIndia's fast moving consumer goods (FMCG) sector is the
fourth-largest sector in India. The country’s FMCG market
expanded by 18% to US$18 billion in 2007-08 and is expected
to reach US$33.4 billion in 2015 (Source: IBEF). The FMCG
growth story is optimistic on account of an increase in rural
demand for branded products (rural India has a large
consuming class with 41% of India's middle-class and 58% of
the country’s total disposable income, according to
Assocham), rise in modern trade and health and wellness
awareness.
LiquorIndians consume 350 million cases of alcohol and 250 million
cases of country liquor a year (Source: All India Distillers’
Association). With an increasing trend towards social drinking,
India has emerged as one of the fastest-growing alcohol
markets (9-10% annually) with the organised sector sales
crossing Rs 6,000 crore in 2007-08 (Source: SSKI). An annual
growth of 30% enabled the Indian wine market to cross a
million cases in 2008. A growing Indian market has attracted
large global players like E&J Gallo, Moet Hennessy, Vuove
Cliquot, Diageo and Pernod Ricard India to enhance their
Indian exposure.
BeerWith a growing acceptance of beer as a non-alcoholic drink,
India’s beer consumption grew 14.5% in 2007-08 and beer
shipments increased from 137 million cases to 158 million
cases (7.8 litres each) in 2007-08. The low per capita
consumption of beer in India (0.8 litres as opposed to 22 litres
in China) leaves substantial scope for increase in demand. The
high price of Indian beer has catalysed the use of robust glass
containers.
Food processing The food processing industry is estimated at US$70 billion. The
sector’s growth nearly doubled to 13.7% in only four years and
is estimated to grow by 20% by 2015 (Source: Ministry of State
for Food Processing Industries). With proposed investments of
US$23.5 billion in the pipeline and only a mere 1.3% of food
processed in India (80% in the developed world according to
India Food Report 2008), there is a huge industry opportunity.
Further, an adoption of stricter government norms and rising
industry standards in quality will boost glass packaging.
Currently, only 6% of the entire country’s food is packed in
glass. An interesting observation on the demand-supply gap is
that small and medium players in industries like confectioneries
and pickles had to shut production because of a shortage of
glass containers in 2007-08.
Carbonated drinksGrowing at 6-8% per annum, the carbonated soft drinks
segment accounts for Rs 6,000 crore of the Rs 9,500-crore
packaged beverages industry (Source: Business Standard).
The per capita consumption of soft drinks in India is a mere 6
bottles, compared with Pakistan's 17, Sri Lanka's 21, Thailand's
73, the Philippines 173 and Mexico's 605. The demand for soft
drinks in India is expected to grow at an annual rate of 10% per
annum between 2006-12, with demand at 805 million cases by
2011-12 (Source: FMCS;IBEF report). The low capita
consumption, coupled with the projected demand, indicates
ample room for additional bottling units.
CosmeticsThe domestic cosmetics and toiletries segments have been
growing at 15-20%, touching US$950 million. With increased
awareness, the industry size is expected to grow to US$1.4
billion in three years (Source: Assocham). This optimism is
derived from the fact that despite a growing penetration of
cosmetic items and entry of new foreign brands, India's per
capita consumption of cosmetic and toiletries is lower than in
other Asian countries: US$0.68 as against US$40 in Hong
Kong, US$10 in Malaysia and Taiwan, US$12 in Japan and
US$1.5 in China.
PharmaceuticalsIndia is among the fastest-growing pharmaceutical markets in
the world. The domestic pharmaceutical market recorded sales
of US$7.3 billion in 2006 with a growth of 17.5% over the
previous year. Average consumer spending doubled over the
past decade and per person spending on prescription drugs is
expected to double from US$761 in 2007 to US$1,537 by 2016.
Hindusthan National Glass & Industries Limited | 33
Around 75% of the Indian population is under 40 and
employable, creating an optimism of sustainable industry
growth.
Operational reviewHNGIL at work
Manufacturing
The Company is the largest manufacturer of container glass in
India with a cumulative capacity of 2,575 TPD across six
manufacturing units.
Installed capacities (MT per day)
FY07 FY08
Rishra 720 720
Rishikesh 365 365
Bahadurgarh 710 710
Neemrana 140
Pondicherry 320 320
Nashik 320 320
Total 2,435 2,575
Manufacturing glass is technically challenging, involving the
balanced use of over 10 raw materials to produce a mix
conducive for a particular container type. Even as the raw
materials are fed in batches, the manufacturing process is
continuous.
From raw material to glassProduction planning process: The raw materials offloaded
from incoming trucks are tested for chemical suitability in the
laboratory. Based on its chemical composition, the raw material
batch is prepared for onwards manufacture either as flint,
amber or green glass. A raw material batch is prepared after
weighing and mixing the raw materials in the right proportion,
according to the type of glass to be manufactured. Raw
material is fed into the furnace and is melted into molten glass
at temperatures ranging from 1600-18000C, which, in turn, is
fed into the individual section(IS) machines to be converted into
bottles (mould management process).
Mould management process: The molten glass is poured into
the IS machines fitted with moulds to provide the desired
shape. The mould is customised and designed according to
the customer specifications received, varying for every bottle.
Thereafter, the hot bottles are moved into the annealing lehr
where the bottles are cooled and heated concurrently, reducing
the chances of stress being developed due to extreme
temperature conditions.
SQC process: The cool bottles are passed through human
sorters who discard those containers which do not match the
specifications mentioned on the sheet. The remaining bottles
form the final product called the ‘pack.’ The discarded bottles
are reused in the production process as raw material (cullet).
There are about 140 possible defects and the sorters are
trained to detect the defective bottles from the resulting pack.
HNGIL has a ‘draw-to-pack’ ratio of 90%, an industry
benchmark in India, and we aim to improve it to the
international best of 93%.
The sorted product is finally packaged for storing and dispatch.
We offer three kinds of packaging depending on customer
needs. One, where the bottles are packed into cardboard
boxes, sealed and dispatched to customers. Second, the
bottles are packed on cardboard trays and then shrink-wrapped
through the heating systems installed at the packaging centre.
Some products like beer bottles are packed in gunny bags as
manufacturers wash the bottles before filling them.
An in-house ceramic printing division allows us to use glass
colours to print labels on the glass containers. Generally used
for reusable bottles like soft drinks, the glass colours ensure
that the colours do not fade after repetitive use, reducing the
subsequent packaging cost of the customer.
Our efficient stacking system on pallets reduces breakage due
to storing to hardly 0.1% of the production.
The high demand for glass containers helps liquidate our
finished goods inventory within 15 days of production. The
warehouses are located in the factory precincts itself, from
where the bottles are dispatched to customers directly.
The national demand for amber glass is fed from our factory at
Rishra and Bahadurgarh. We maintain warehouses in Mumbai
to feed our customers in the western region.
34 | Hindusthan National Glass & Industries Limited
� The manufacturing process has two ends. The hot end
beginning with the raw material batch mix entering the furnace
silos and ending with the annealing process. The cold end
starts at the sorting stage and ends with product dispatch
� Production planning process involves a wide range of
activities from procuring the raw material to converting the
same into molten glass
� Mould management process involves activities ranging from
converting the molten glass into bottles as per customer
specification to cooling the same in annealing chambers
� SQC process comprises activities from sorting the cooled
bottles to dispatching the same to customer bottling units
OutlookThe Company is reinforcing performance through the following
initiatives:
� Redesigning of furnaces nearing obsolescence
� Installation of a ‘clean room’ so that bottles can pass through
the cold end of the manufacturing process without any contact
with the external environment
� Proposed increase in furnace capacity through booster loads
to improve the draw; proposed increase in machine capacity
through enhanced machine speed (cycles per cavity)
� Proposed acquisition of a pelletiser to automate packaging
1952 1999-2000 2000-01 2001-02 2004-05 2006-07 Present
Together constitute ACEcontainers
GR
OW
TH
Acquisition ofassets of Neemrana
plant – capacity2575 TPD
Capacity at2435 TPD
L&T plantacquisition –capacity at2150 TPD
Capacityat 1800 TPDfrom OwensBrockway acquisitionExpanded
capacityto 1100 TPD
Installedcapacity
of 30 TPD
Hindusthan National Glass & Industries Limited | 35
� Superior management techniques resulted in an increase in
performance, productivity and profitability
� A successful rollout of TPM techniques at Bahadurgarh and
Rishra led to a 300 basis points increase in productivity
� Testing 11 lean Six Sigma projects
� Initiated the process of implementing a SAP ERP to
streamline operations and ensure real time data availability
HNGIL at work
Management practices
At HNGIL, we recognise the importance of superior
management tools that enhance performance, productivity and
profitability. The Company implemented a number of such
tools and techniques, strengthening its shop floor
effectiveness.
Total Productivity Maintenance: Based on the eight principles
of productive maintenance. This comprises quality
maintenance, kaizen, autonomous maintenance, etc. and is a
productivity enhancing tool rather than being a cost centre.
Each machine operator is given the responsibility of running
the machine at optimum levels; any increase is incentivised.
TPM was implemented at Bahadurgarh and Rishra, improving
the draw-to-pack efficiency by around 300 basis points.
Lean Six Sigma: Combines the best practices adapted from
the lean management system of Toyota and the Six Sigma
practices of Motorola. This helped reduce non-value added
time (between production completion and revenue generation).
Six Sigma practices helped minimise deviations from
specifications leading to superior product quality and
productivity. The Company adopted 11 projects for enhanced
performance.
ERP rollout: The first phase of the Company’s ERP solution will
be rolled out in Bahadurgarh, Rishra and the head office by
December 2008 across the sales distribution, production
planning, plant maintenance, materials management, quality
maintenance, warehouse management and engineering chain
management (ECM) and data management systems (DMS).
This will facilitate real time information management for timely
decision-making, superior inventory management, elimination
of data mismatch and redundancies and uniform multi-unit
design changes.
HNGIL at work
Quality
At HNGIL, quality is defined as all the product attributes that
enable a bottle to resist breakage during transportation and
filling.
At HNGIL, our quality commitment comprises the ability to
produce according to demanding customer dimensions with
checks across 140 defect parameters and well within tolerance
limits defined by customers.
Raw material vigilance At HNGIL, quality control comprises the following processes
and stages:
� Random sampling for chemical composition of incoming raw
materials and onward mixing as per batch needs
� Regulation of furnace temperature, resulting in appropriate
glass viscosity and distribution
� Analysis of molten glass across characteristics like glass level,
raw material mix, glass viscosity and temperature, influencing raw
material and chemical consumption
36 | Hindusthan National Glass & Industries Limited
Quality managementThe moulded glass is monitored hourly across 15 dimensions
by the production and quality departments, the deviations
reported and the mould redesigned. The bottles are cooled in
the annealing lehrs and thereafter subjected to alternate
cooling and heating spells to minimise bottle stress. Thereafter,
the bottle is passed through a lighting station where sorters
examine bottles; the defective bottles are discarded for use as
glass cullet in the manufacturing process. The quality of shrink-
wrapped packaging minimised in-transit contamination and
breakage. The Company is tightening its process discipline in
line with ISO 22001:2000 certification, which will make it a
preferred vendor for the food processing industry.
� The Company is ISO 9000: 2000-certified
� Quality control is ensured across two stages. One at the raw
material stage handled by glass technologists and the other at
the production stage handled by engineers and the quality
control department
NNPB technology vs. Blow and Blow technology
The Press and Blow Process is an improvement upon the Blow
and Blow process for the following reasons:
- The parison facilitates precision in control
- Enhanced glass distribution throughout the bottle
- Lighter in weight, hence a lower consumption of molten glass
- Lower costs
HNGIL at work
Research and development
At HNGIL, we are engaged in a continuous exercise to
enhance our product and process efficiency, reflected in lower
costs, better product, stronger quality and enhanced
productivity.
Over the years, the Company worked closely with furnace
technology providers with the objective to increase furnace
load (more material can be generated through the same power
consumption) and the use of technically advanced shervo
gobs to minimise deviations.
The Company selectively introduced the narrow neck press
and blow (NNPB) technology in 2007-08 – superior to the
conventional blow and blow process used for narrow neck
bottles, leading to a saving of molten glass per bottle without
compromising product strength. This technology facilitates
superior glass distribution. In turn, this superior distribution
reinforces the bottle’s resistance to pressure on the filling line,
suited for carbonated and beer brands; the concurrent weight
saving implies savings for the Company and customers – a
reduction in logistics cost and increasing consumer
acceptability. The first successful bottle rollout of the new
technology was the dextrose glucose bottle, used in
intravenous applications.
The Company’s R&D efficacy also translated into direct
benefits. The Company leveraged its deep understanding of
the product, technology, aesthetic and end-customer
applications to offer customers suggestions in enhancing line
efficiency, enabling them to accelerate their filling speed,
reduce breakages and strengthen their overall viability.
Hindusthan National Glass & Industries Limited | 37
� The introduction of a lighter, stronger dextrose glucose bottle has enabled us to capture the entire market for that product
� Light-weighting has led to a 35 gms saving of molten glass per bottle in this particular case
� Fuel costs are being optimised by increasing the furnace load.
HNGIL at work
Marketing and distribution
In the business of container glass, products must be made and
marketed to enhance their preference over competing
packaging alternatives as well as competing container glass
competitors. The Company’s edge was conclusively
showcased in its market share in excess of 65% in 2007-08.
During the year under review, the Company has faced the
following challenges: growing competitiveness from alternative
packaging materials and an increase in material costs, making
it imperative to absorb costs, enhancing the price-value
proposition and preventing a shift to alternative materials.
The Company retained its share of a growing market through
the following initiatives:
� Growing adaptation and customisation of the end product with
the objective to reduce costs
� Progressive graduation from mere product delivery to complete
packaging solutions
� Integration of line friendliness, customer friendliness, consumer
friendliness and environment friendliness into the overall value
proposition
� Proactive light-weighting of bottles – a win-win for the Company
and customer – resulting in lower material and logistics cost
� Quicker sale through the complement of the Company’s scale,
versatility, product flexibility and a pan-India presence
� Stable pricing of end products as opposed to a volatile raw
material environment
The highlights of the Company’s achievements in 2007-08
comprised the following:
� An increase in installed capacity at a time when demand
exceeds supply, reinforcing customer relationships
� A growth in market share across most product segments
� A decline in the cycle time required to service customers from
the design to market stage
� An increase in realisations in line with cost push inflation and
global benchmarks
� The launch of light-weight bottles, resulting in lower costs and
better value for customers
� A growing ability to service multi-locational, multinational
customers through our multi-locational units
The Company reinforced its price-value through relatively
stable pricing even as raw material contracts were revised on
four occasions during the year under review. HNGIL reinforced
its position through the prudent graduation from vendor to co-
product developer through technical consultancy services.
We are optimistic of our prospects on account of glass
container demand growing faster than supply. Besides, an
increase in disposable incomes, nuclear families, processed
food purchases and beer consumption will drive bottle offtake,
reinforcing the Company’s prospects.
The Company expects to capitalise on this reality through a
greater proportion of NNPB products, increased sales,
enhanced realisations derived from value-addition, superior
service and a growing proportion of exports.
38 | Hindusthan National Glass & Industries Limited
� Air emissions are the only form of pollution
� Alternative fuel choices like natural gas have made HNGIL
eligible for carbon credits
� The demand for container glass is higher than supply
� HNGIL is acquiring plants at periodic intervals to increase
capacity, instilling confidence in its large portfolio of clients
� India is the lowest cost producer of glass in the world and is
poised to grow globally
� With renowned brands switching to Indian-manufactured
glass containers, the Company has room to enhance volumes
� Despite a slowdown in the consumption of non-essential
items, the Company is confident of its growth as it caters to the
top 10 companies in each of the segments in which it operates
� No person-days were lost due to safety failures
� Management practices for enhancing safety for employees are
being developed
HNGIL at work
Technical consumer services
In the business of container glass manufacture, the marketing
team works closely with the research and development team to
develop technical consumer services. The latter comprises
consultancy to clients on how to improve bottle design with the
objective to enhance the filling-line efficiency, accelerate
payback and translate a one-off transaction into an ongoing
relationship.
HNGIL’s consultancy is offered at two stages: before bottle
production (pre-consultancy stage), comprising design, line
and equipment suggestions; following bottle production (post-
consultancy stage) with a view to enhance efficiency of the
Company’s bottles on the customers’ bottling lines.
The result is that the Company has graduated from a vendor
into a technology partner, enhancing throughput on the
customers’ lines, reinforcing their viability and encouraging
them to enhance production. In one of the high points of
achievement, the Company successfully converted successful
Indian and multi-national brands who hitherto imported their
requirement of bottles into committed customers.
HNGIL at work
Safety
Some of the Company’s operations are hazardous, warranting
the need for safety. In view of this, the Company invested in
safety equipment, processes, practices and people.
The Company deputed a professionally qualified safety, health
and environment officer in each of its manufacturing facilities. It
is adopting practices necessary for the OHSAS (ISO
18001:2000) certification. It periodically reviews processes with
an eye on the probability of accidents, severity, frequency,
production loss, etc. with ratings on each according to their
occurrence and significance. These ratings are then multiplied
and the result is compared with a standard set for each
process. If the resulting figure is higher than the standard, then
that particular area is classified as accident prone; if the figure
is significantly higher, then it is classified as a danger zone.
Thereafter, scientific management techniques are employed to
reduce the ratings below standard levels for enhanced process
safety. The effectiveness of our procedures can be gauged
from the fact that despite increased production in 2007-08, the
Company did not experience any major accident.
HNGIL at work
Environment
The manufacture of container glass does not entail any
hazardous liquid or solid waste. Water used in cooling towers
is reused, as is the glass from rejected bottles as cullet. Being
ISO 9001:2000-certified, the Company monitors and
documents pollution levels, which are subsequently audited by
an external agency.
The Company consumes eco-friendly options like natural gas
and its carbon dioxide emissions have progressively declined.
It has embarked on the process to obtain the ISO 14001:2000
certification.
Hindusthan National Glass & Industries Limited | 39
Internal control systems and their adequacy
The Company has an adequate internal control system, which
commensurates with the Company’s size and the nature of its
business. It has well established and documented operational
procedures, ensuring that transactions are recorded,
authorised and reported correctly apart from safeguarding its
assets against wastage, unauthorised use and removal. This is
regularly reviewed and updated.
Physical verification of fixed assets is done periodically. The
Company appointed independent and qualified external
agencies that submit detailed reports on internal control
system and their adequacy to the Audit Committee of the
Board of Directors, periodically.
� Number of saleable bottles increased as a result of enhanced manpower productivity
� Downtime declined
HNGIL at work
People management
Glass manufacture is more knowledge-intensive than most
businesses for some good reasons: the process of
manufacture is complex, the customer’s quality requirements
are becoming increasingly stringent, the cost of error is high
and the amount of individuals required to man each machine is
higher than in other industries.
At HNGIL, our primary asset is our intellectual capital,
represented in the collective knowledge and experience of our
people. The Company is the largest employer in its industry
space in India, with over 3,000 employees as on
March 31, 2008.
The Company recruits individuals from the best glass
technology colleges as well as mechanical, production and
chemical engineers from reputed institutes. Their academic
understanding is reinforced through classroom training, which
is subsequently appraised though periodic written tests.
This enhanced training is catalysed by a cross-factory sharing
of the best practices and measured in the Company’s
production efficiency, linked to monthly incentives.
The effectiveness of the Company’s labour relation practices is
reflected in its record of years of working uninterrupted by any
labour unrest.
Increasing manpower training hours
Year 2007-08 2006-07 2005-06
Training hours/years (hrs) 31883. 5157 11189
Rising manpower productivity
Years 2007-08 2006-07 2005-06
Productivity (MT/person) 192 126 122
Declining labour cost
Year 2007-08 2006-07 2005-06
Labour cost/tonne (Rs) 790.00 1,931.00 1,119.00
Executive grade people skill
Qualifications %
MBA 03.70
CA/CS/ICWA 03.58
ME/MBBS/MSW 01.60
Post graduate 11.13
Technical diploma 28.90
Graduate 31.30
ITI 07.00
Inter/SSE 09.80
Below SSE 03.00
40 | Hindusthan National Glass & Industries Limited
Reviewing our key numbers
Income accounting method The financial statements of the Company were prepared in line
with the generally accepted Accounting Principles and the
Accounting Standards as per Section 211(3C) of the
Companies Act, 1956. The financial statements of the
Company were prepared under historical cost convention basis
and disclosures made in accordance with the requirement of
Schedule VI of the Companies Act, 1956 and the Indian
Accounting Standards. The Company followed the mercantile
system of accounting and recognised income and expenditure
on accrual basis. The Company made all relevant provisions as
were applicable as on March 31, 2008. The absence of any
material qualifications in the Company’s Auditors’ Report
indicates that the Company’s financials present a true and fair
view of the Company during the year under review.
2007-08 vs 2006-07 The Company’s performance is captured in the following
numbers:
� Gross revenue increased by 92.87% from Rs 59,539.68 lacs
in 2006-07 to Rs 1,14,833.90 lacs in 2007-08
� EBIDTA increased by 107.92% from Rs 10,324.87 lacs in
2006-07 to Rs 21,467.11 lacs in 2007-08
� PAT increased by 368.22% from Rs 3,424.46 lacs in 2006-07
to Rs 16,033.89 lacs in 2007-08
� Cash profit (PAT + depreciation +/- deferred tax liability)
increased by 194.24% from Rs 6927.39 lacs in 2006-07 to
Rs 208383.16 lacs in 2007-08
� EPS (basic) increased from Rs 31.01 in 2006-07 to Rs 91.79
in 2007-08
The Company’s margins strengthened across the Board on
account of superior economies of scale, widening national
presence and relevant cost-cutting:
� EBIDTA margin increased 135 basis points from 17.34% in
2006-07 to 18.69% in 2007-08.
� Net profit margin increased 821 basis points from 5.75% in
2006-07 to 13.96% in 2007-08.
� Return on capital employed increased from 12.07% in 2006-
07 to 15.63% in 2007-08
Mitigating risks at HNGIL
Industry risk A slowdown in the
downstream industries
could affect demand.
� Demand has been buoyant from the processed foods, beverages,
beer, liquor, pharmaceutical and organised retail sectors
� The Company caters to the top 10 companies present in these
segments, growing faster than the industry average
� Demand is higher than the existing supply
Competition risk The Company’s success
might attract competition.
� The container glass industry is capex and working capital-intensive
� The Company has the largest installed capacity in India
� The Company enjoys longstanding customer relationships with
multinationals
� The Company pioneered the introduction of light-weighting
technology in India
Risk mitigationRisk explanationRisk identification
Hindusthan National Glass & Industries Limited | 41
Risk mitigationRisk explanationRisk identification
Raw material risk An inability to procure
adequate raw materials at
the right price may affect
the Company’s
competitiveness.
� A subsidiary company owns silica sand reserves
� The Company is already in the process of acquiring limestone and
dolomite mines on lease
� The Company enjoys extended raw material supply contracts (three
months) on account of its large volume
Environment risk Tight environment
regulatory policy could
affect operations.
� The Company’s operations were periodically certified by the Pollution
Control Board
� The waste water was re-used in the cooling towers
Quality risk An inferior quality of end
product can dent the
Company’s brand equity.
� The Company follows stringent quality control, comprising a
thorough inspection of raw materials, in-process materials and finished
products reinforced by hourly checks
� The Company possesses the ISO 9000:2000 quality certification
Talent risk The development of a
company could be stunted
without the necessary skill
sets.
� The Company continues to attract the best in the industry with
attractive growth opportunities presented for personal development of
individuals
� At HNGIL, we incentivise performance to retain the best talent
� The Company provides in-house training to enable employees to
develop skill sets specific to the glass industry, ensuring loyalty and
competence
� As a result, HNGIL enjoys one of the lowest attrition rates in the
industry
Technology
obsolescence risk
The advent of new
technologies could make
the existing processes
obsolete, threatening the
Company’s growth.
� The Company is a front-runner in technological advancements with a
consistent first mover’s advantage
� The Company pioneered the light-weighting technology and the
NNPB (Narrow Neck Process Blow) technology on a large scale
� Its insight into plant fabrication has facilitated low-cost
de-bottlenecking and asset turnaround
� Its technical skills reflected in relevant productisation for the liquor,
beverages and food processing sectors
42 | Hindusthan National Glass & Industries Limited
Corporate Governance
A. Mandatory requirements1. Company’s philosophy on Code of GovernanceCorporate Governance is a system and process that directs
corporate resources and management strategies towards
maximising stakeholders’ value, while ensuring accountability,
integrity and openness in the conducting of business within the
acceptable legal and ethical framework. A good governance
process thus provides sufficient transparency over corporate
policies, strategies and the decision-making process, while
strengthening internal control systems and building relationship
with stakeholders, including employees and shareholders.
The Company’s philosophy is to adopt such policies and
practices, which are best in the interest of all the persons who
are touched by it. Your Company acknowledges and respects its
fiduciary relationship and responsibility towards its stakeholders
and strives hard
� To protect their interests
� To enhance their trust and confidence
� To meet their expectations
� To improve public understanding of activities and policies of
the organisation; and
� To achieve balance between stakeholders’ interests and
corporate goals by adopting such systems and procedures that
are recognised as the best corporate practices through which
good corporate governance principles are articulated and
implemented to meet all the relevant and critical legal and
regulatory requirements
The Company has formed an active, well-informed Board with
the majority comprising Independent Directors to uphold the
Company’s commitment to follow high standards of ethical
values and business integrity. During the year 2007-08, the
Company has kept its commitment towards the required norms
and disclosures on Corporate Governance under the Listing
Agreement executed with the stock exchanges, on which the
shares of the Company are listed.
2. Board of Directors Present composition and size of the Board
The composition of the Board of Directors as on March 31, 2008
is given below. Out of the total 10 Directors on the Board:
� 2 are Executive Directors
� 1 is a Non-Executive Director
� 7 are Non-Executive Independent Directors
The Chairman of the Company is a Non-Executive, Non-
Independent Director. The number of Independent Directors
exceeds one-half of the total number of Directors.
� Attendance of Directors at the previous Annual General
Meeting (AGM).
The last Annual General Meeting was held on September 14,
2007 at the registered office of the Company, 2 Red Cross Place,
Kolkata 700 001 and the same was attended by all the Directors
except Mr Kishore Bhimani, Mr Supriya Gupta, Mr S.K. Bangur
and Dr I. K. Saha.
Pursuant to Clause 49 of the Listing Agreement executed with the stock exchanges on which the shares of the
Company are listed, the Report on Corporate Governance of your Company as part of the Directors’ Report, is
furnished below.
Report on
Hindusthan National Glass & Industries Limited | 43
Attendance of Directors at the Board meeting and number of other directorships and other Board committee memberships, etc. during
the year under review.
Name of the Category of No of Board Directorship in #No. of committees
Director directorship meeting(s) other companies (Other than that of the Company)
attended incorporated in which he is
in India^ Chairman Member Total
Mr C. K. Somany (Chairman) 5 13 - 1 1
Non-Executive
Mr Sanjay Somany (Managing Director) 4 14 – – –
Executive
Mr Mukul Somany (Jt. Managing Director) 6 16 – – –
Executive
Mr Kishore Bhimani Independent 4 1 – 2 2
Mr S. Bhattacharya Independent 6 2 – 1 1
Mr R. K. Daga Independent 6 10 3 – 3
Mr Dipankar Chatterji Independent 5 12 – 5 5
Mr S.K. Bangur Independent 1 13 1 – 1
Mr Supriya Gupta Independent 4 11 5* 6* 11*
Dr I.K. Saha Independent 6 1 – – –
* includes membership of the committee of Board of Directors of a foreign company.
^excludes directorship of Companies u/S 25 of the Companies Act, 1956.
# all the Committees of which the above Directors are Member/Chairman have been considered.
� Board meetings held during the year
During the financial year ended on March 31, 2008, six Board meetings were held within the maximum specified duration of 120
days between two Board meetings. The details of the meetings are as follows:-
Sl. no. Date of meeting For the quarter Duration between last Board Meeting
01. April 25, 2007 April, 2007 – June, 2007 43 days
02. July 14, 2007 July, 2007 – September, 2007 79 days
03. July 15, 2007 July, 2007 – September, 2007 –
04. August 11, 2007 July, 2007 – September, 2007 26 days
05. October 26, 2007 October, 2007 – December, 2007 75 days
06. January 22, 2008 January, 2008 – March, 2008 87 days
44 | Hindusthan National Glass & Industries Limited
Board procedure
The Board meetings are normally convened on the directions
received from the Chairman/Managing Director of the Company.
A detailed agenda is circulated to the members of the Board, at
least three days prior to the date of the meeting. Agenda items
are circulated along with relevant information to enable the Board
members to take appropriate decisions. The minutes of the
Committee are regularly placed before the Board.
3. Audit Committee � Terms of reference
The Company constituted an Audit Committee in the year 2000.
The terms of reference of the Audit Committee are as follows:-
1. Oversight of the Company’s financial reporting process and
the disclosure of its financial information to ensure that the
financial statement is correct, sufficient and credible.
2. Recommending to the Board, the appointment, re-
appointment and, if required, the replacement or removal of
the statutory auditor and the fixation of audit fees.
3. Approval of payment to statutory auditors for any other
services rendered by them.
4. Reviewing, with the management, the annual financial
statements before submission to the Board for approval, with
particular reference to:
a. Matters required to be included in the Director’s
Responsibility Statement to be included in the Board’s
report in terms of Clause (2AA) of Section 217 of the
Companies Act, 1956.
b. Changes, if any, in accounting policies and practices and
reasons for the same.
c. Major accounting entries involving estimates based on the
exercise of judgment by the management.
d. Significant adjustments made in the financial statements
arising out of audit findings.
e. Compliance with listing and other legal requirements
relating to financial statements.
f. Disclosure of any related party transactions.
g. Qualifications in the Draft Audit Report.
5. Reviewing, with the management, the quarterly financial
statements before submission to the Board for approval.
6. Reviewing, with the management, performance of statutory
and internal auditors and adequacy of the internal control
systems.
7. Reviewing the adequacy of internal audit function, if any,
including the structure of the internal audit department,
staffing and seniority of the official heading the department,
reporting structure coverage and frequency of internal audit.
8. Reviewing with internal auditors any significant findings and
follow-up there on.
9. Reviewing the findings of any internal investigations by the
internal auditors into matters where there is a suspected
fraud or irregularity or a failure of internal control systems of
a material nature and reporting the matter to the Board.
10. Discussion with statutory auditors, about the nature and
scope of audit as well as post-audit discussion to ascertain
any area of concern.
11. To look into the reasons for substantial defaults in the
payment to the depositors, debenture-holders, shareholders
(in case of non-payment of declared dividends) and
creditors.
12. Carrying out any other function as mentioned in the terms of
reference of the Audit Committee.
� Composition, meetings and attendance during the year
During the financial year ended March 31, 2008, eight meetings of the Audit Committee were held and the attendance of each
member of the Committee is given below:
Dates of meetings
April 24, 2007 July 14, 2007 August 11, 2007 September 5, 2007
October 26, 2007 November 26, 2007 January 22, 2008 March 24, 2008
Hindusthan National Glass & Industries Limited | 45
Remuneration policy of the Company
The remuneration of the Executive Directors are recommended
by the Remuneration Committee, based on criteria such as
industry benchmarks, the Company’s performance vis-à-vis the
industry, responsibilities shouldered, performance/track record,
macro-economic review, remuneration packages of heads of
other organisations and approved by the Board of Directors. The
Company pays remuneration by way of salary, perquisites and
allowances, incentive remuneration and /or commission to its
Executive Directors.
The remuneration by way of commission to the Non-executive
Directors is decided by the Board of Directors and distributed on
an equal basis. The members had, at the Annual General
Meeting held on September 14, 2007, approved the payment of
remuneration by way of commission to the Non-Executive
Directors of the Company of a sum not exceeding 1% per annum
of the net profits of the Company calculated in accordance with
the provisions of Section 198 of the Companies Act, 1956 for a
period of five years, commencing from April 1, 2007 and the
same is subject to a limit of Rs 1,00,000 per Director. The
commission for the financial year 2007-08 will be distributed
among the said Directors accordingly.
� Details of the remuneration paid to the Directors during the year
2007-08
� To Non-Executive Directors
In addition to the commission as aforesaid, the Independent and
Non-Executive Directors are entitled to a sitting fee of Rs 5,000 for
attending each meeting of the Board and the Audit Committee.
The members of Remuneration Committee are paid a sitting fee
of Rs 2,500 for attending each committee meeting. Further, no
remuneration is paid for attending the meeting of the Share
Transfer & Shareholders’ Grievance Committee and Treasury
Management Committee.
The Company obtained shareholders’ approval for the payment
of commission to Non Executive Directors, on September 14,
2007, for a period of five years. The amount of commission will be
apportioned and paid among the Non-Executive Directors on the
basis of duration of membership on the Board.
Members of the Audit Committee have the requisite financial and management expertise. The Chairman of the Audit Committee
attended the 61st Annual General Meeting of the Company.
Total Strength : Three
Designation Members Category No. of No. of meetings
meetings held attended
Chairman Mr R. K. Daga Non-Executive, Independent Director 8 8
Member Mr Sujit Bhattacharya Non-Executive, Independent Director 8 8
Member Mr Dipankar Chatterji Non-Executive, Independent Director 8 7
4. Remuneration Committee � Composition, meetings and attendance during the year
Total strength : Three
Designation Members Category
Chairman Mr R.K. Daga Non-Executive, Independent Director
Member Mr Kishore Bhimani Non-Executive, Independent Director
Member Mr Dipankar Chatterji Non-Executive, Independent Director
During the financial year 2007-08, one meeting of the Remuneration Committee was held on April 25, 2007 to approve the increase
in remuneration of the Managing Director and Joint Managing Director.
46 | Hindusthan National Glass & Industries Limited
The details of sitting fees paid and commission payable for the year 2007-08 are as follows: (In Rupees)
Directors Business relationship with HNGIL Sitting fees Commission Total
Mr C.K. Somany* Promoter 25,000/- 100,000/- 125,000/-
Mr Kishore Bhimani None 20,000/- 100,000/- 120,000/-
Mr S. Bhattacharya None 70,000/- 100,000/- 170,000/-
Mr R.K. Daga None 70,000/- 100,000/- 170,000/-
Mr Dipankar Chatterji None 60,000/- 100,000/- 160,000/-
Mr S.K. Bangur None 5,000/- 100,000/- 105,000/-
Mr Supriya Gupta None 20,000/- 100,000/- 120,000/-
Dr I.K. Saha None 30,000/- 100,000/- 130,000/-
* Mr C.K. Somany is father of Mr Sanjay Somany, Managing Director and Mr Mukul Somany, Joint Managing Director. Other Directors are not
related to one another.
� To Executive Directors
Mr Sanjay Somany was re-appointed as the Managing Director and Mr Mukul Somany was re-appointed as the Joint Managing Director
of the Company, with effect from October 1, 2005 up to September 30, 2010 (i.e. for a period of five years). The remuneration paid to
them during the year 2007-08, as agreed between the Executive Directors and the Company, which is within the ceiling fixed by the
shareholders, is as follows :
(In Rupees)
Break-up of remuneration Executive Directors
Business relationship with HNGIL Managing Director, Promoters’ family Jt. Managing Director, Promoter’s family
Salary 55,20,000 55,20,000
Provident fund 6,62,400 6,62,400
Perquisites 2,93,918 –
Commission 55,20,000 55,20,000
Total 1,13,33,918 1,10,40,000
**Mr Sanjay Somany, Managing Director and Mr Mukul Somany, Joint Managing Director,who are brothers are related to Mr C.K. Somany,
Chairman of the Company
Notes:
a. The agreement with each of the Executive Directors is for a period of five years (i.e. w.e.f. October 1, 2005 up to September 30,
2010) or the normal retirement date, whichever is earlier. Either party to the agreement is entitled to terminate it by giving not less
than three months' notice in writing to the other party.
b. Fixed commission at 1% of the net profits of the Company computed pursuant to Section 198 of the Companies Act, 1956, is paid
subject to a ceiling of his annual salary.
c. Currently, the Company does not have a scheme for grant of stock options either to the Executive Directors or employees.
Hindusthan National Glass & Industries Limited | 47
5. Share Transfer and Shareholders’ Grievance Committee � Composition, meetings and attendance during the year
Total strength : Four
Designation Members Category No. of meetings held No. of meetings attended
Chairman Mr Kishore Bhimani Non-Executive 11 11
Independent Director
Member Mr R.K. Daga Non-Executive 11 9
Independent Director
Member Mr Sanjay Somany Executive Director 11 3
Member Mr Mukul Somany Executive Director 11 8
The dates on which the meetings of the Share Transfer and Shareholders' Grievance Committee were held during the year:
Dates of meetings
April 24, 2007 May 3, 2007 June 26, 2007 July 14, 2007
August 14, 2007 September 24, 2007 October 26, 2007 December 27, 2007
January 15, 2008 February 8, 2008 February 21, 2008 –
� Shareholders’ complaints and pending share transfer
There were no investor complaints pending at the beginning of the year. During the year ended March 31, 2008, the Company has
not received any complaint.
6. a) General Body MeetingsThe details of day, date, venue and time of General Meetings held during the last three years are as follows:
General Meeting Venue Day and date Time
61st Annual General Meeting Registered Office: Friday, September 14, 2007 11.30 AM
60th Annual General Meeting 2, Red Cross Place, Monday, September 26, 2006 11.30 AM
59th Annual General Meeting Kolkata- 700 001 Monday, September 26, 2005 11.00 AM
Details regarding Special Resolutions passed during the previous three years are given below:
Shareholders’ meeting Special business requiring Special Resolution
61st Annual General meeting 1. Resolution requiring approval for payment of commission to the Non- Executive Directors
2. Resolution requiring approval u/S. 314 of the Companies Act, 1956 for Shri Bharat Somany,
to hold an office or place of profit in the Company
60th Annual General meeting None
59th Annual General meeting Resolution requiring approval u/S 314 of the Companies Act, 1956 for Shri C K Somany to hold
an office or place of profit under the subsidiary company M/s Glass Equipment (India) Ltd.
However, no resolution requiring a postal ballot u/S 192A of the Companies Act, 1956 was recommended for approval during the last
year. No resolution requiring postal ballot is being proposed at the ensuing Annual General Meeting. The Company will seek
shareholders’ approval through postal ballot in respect of resolutions relating to such business as prescribed in the Companies
(passing resolutions by postal ballots) Rules, 2001, as and when the occasion arises.
48 | Hindusthan National Glass & Industries Limited
b) Notes on Directors seeking appointment/re-appointment as required under Clause 49 IV (G) ofthe Listing Agreement entered into with the stockexchanges.
� Brief resume of Mr Dipankar Chatterji
Mr Dipankar Chatterji, a noted chartered accountant, is a senior
partner of the firm L.B. Jha & Co. Chartered Accountants. Mr
Chatterji has been the Chairman, Eastern Region of
Confederation of Indian Industry (CII) and is at present a member
of the National Council of CII.
He was member of the Central Council of the Institute of
Chartered Accountants of India and the Chairman of the Audit
Practices Committee of the Institute. Mr Chatterji was also
appointed as member of the Padmanabhan Committee set up to
review the Reserve Bank of India’s supervision over banks and a
committee set up to advice on NABARD’s supervisory role over
RRBs and co-operative banks and various other committees and
task forces. Mr Chatterji has also been the past President of the
eastern region of the Indo American Chamber of Commerce.
He is also on the Board of following body corporates 1) West
Bengal Industrial Development Corporation Ltd. 2) West Bengal
Industrial Infrastructure Development Corporation 3) Span Motels
Pvt. Ltd. 4) United Credit Ltd. 5) United Credit Belani Properties
Ltd. 6) Patton International Ltd. 7) Nicco Internet Ventures Ltd. 8)
International Infrastructure Services FZ-LLC, 9) Indian Copper
Development Centre 10) Pantheon Data Services Pvt. Ltd. 11)
Delphi Management Services Pvt. Ltd. 12) The Calcutta Stock
Exchange. He is the Chairman of the Audit Committee of United
Credit Limited and Patton International Ltd., member of the Audit
Committee, Investment & Borrowing Committee, Executive
Committee and Restructuring & Settlement Committee of West
Bengal Industrial Development Corporation Ltd., and also the
member of the Remuneration Committee of Nicco Internet
Ventures Ltd.
Mr Chatterji does not hold any shares of the Company.
� Brief resume of Mr R K Daga
Mr R.K. Daga is a post graduate in business management from the
UK. He has considerable knowledge in engineering and finance.
He has been the former Chairman of the Indian Institute of Materials
Management, Kolkata. He is also the past President of the Calcutta
Junior Chamber, adjudged the best unit in India, during his tenure.
He also led a three-member team to Sri Lanka to conduct
leadership development courses. He is also a past President of
Federation of Small & Medium Industries (FOSMI), leading a fifteen-
member business delegation of FOSMI to Singapore, Malaysia and
Hong Kong. Currently, he is the Hony. Secretary of Satyanand Yoga
Kendra, Kolkata branch of the Bihar School of Yoga.
He is on the Board of 1) Somany Ceramics Ltd., 2) S.R. Continental
Ltd., and several private limited companies. He is the Chairman of
the Audit Committee, Remuneration Committee and Shareholders’
& Investors’ Grievance Committee of Somany Ceramics Ltd.
Mr Daga does not hold any shares of the Company.
� Brief resume of Mr C K Somany
Mr C K Somany is an acknowledged expert in glass technology
and is providing policy guidelines for the management and
administration of the Company. He holds a F.B.I.M (London)
degree and a degree in glass plant instrumentation from
Honeywell Brown, Minneapolis, U.S.A. Mr C. K. Somany has
served as the President of the All India Glass Manufacturers’
Association, Bengal Glass Manufacturers’ Association and
several other commercial and non-commercial organisations. He
has served as the Chairman of the Development Panel for the
glass industry formed by the Government of India, Ministry of
Industry during the period 1995-97. He is also associated with
various charitable and philanthropic organisations, carrying on
the tradition of his illustrious ancestors. He was inducted in the
Board in 1970 and subsequently took over as the Executive
Director of the Company and thereafter as the Managing Director,
a post held by him up to September, 2000. Currently, he is a Non-
Executive Chairman of the Company.
He is on the Board of 1) The West Coast Paper Mills Ltd. 2) Glass
Equipment (India) Ltd. 3) HNG Float Glass Ltd 4) Somany Foam
Limited 5) Microwave Merchants Pvt. Ltd. 6) Niket Advisory &
Trading Co. Ltd. 7) Noble Enclave & Towers Pvt. Ltd. 8) Spotlight
Vanijya Ltd. 9) Topaz Commerce Ltd. 10) Amazon Sales Pvt. Ltd.
11) Dhananjay Tradelink Pvt. Ltd. 12) Keshav Engineering Co.
Pvt. Ltd. 13) Aurobindo Housing Co-operative Society Ltd. He is
also the member of the Audit Committee of The West Coast
Paper Mill Ltd.
Mr C. K. Somany holds 5,35,474 shares of the Company (in his
personal capacity).
Disclosures
� There are no materially significant related party transactions
Hindusthan National Glass & Industries Limited | 49
made by the Company with its promoters, directors or the
management, its subsidiaries or relatives, etc. that may have
potential conflict with the interests of the Company at large. The
register of contracts containing the transactions in which the
Directors are interested is placed before the Board regularly for
its approval.
� Transactions with related parties are disclosed in Note No. 28
of Schedule ‘S’ to the accounts in the annual report.
� During the last three years, there were no strictures or penalties
imposed on the Company by either the Securities and Exchange
Board of India (SEBI) or the stock exchanges, or any other
statutory authority for non-compliance of any matter relating to
the capital market.
� Though there is no formal whistle blower policy, the Company
takes cognisance of the complaints made and suggestions given
by the employees and others. Even anonymous complaints are
looked into and whenever necessary, suitable corrective steps
are taken. No employee of the Company was denied access to
the Audit Committee of the Board of Directors of the Company.
� The Company conducts periodic reviews and reporting to the
Board of Directors regarding risk assessment by senior
executives with a view to minimise risk.
� None of the Non-Executive Directors hold any share in the
Company except Mr C K Somany (holding 5,35,474 shares in his
personal capacity).
7. Means of communication � The quarterly, half-yearly and annual financial results are
published in the proforma prescribed under the Listing
Agreement in one English Newspaper having wide circulation
and another in vernacular language (Bengali). However, only the
annual results are sent to the shareholders of the Company.
� The Company’s annual results along with various other
information are displayed on the Company’s web-site
www.hngindia.com.
� Pursuant to the requirement of Clause 51 of the Listing
Agreement, the quarterly financial results, shareholding pattern,
etc. are provided on the specified web-site of SEBI i.e.
http://sebiedifar.nic.in.
� The management discussion and analysis report form a part of
this annual report.
8. General shareholder information� Incorporation
The Company was incorporated in Calcutta in the Province of
Bengal on February 23, 1946 (now West Bengal).
� Corporate Identification Number (CIN):
L26109WB1946PLC013294
� AGM: Date, time and venue
September 8, 2008, Monday at 10 am at the Rotary Sadan,
94/2, Chowringhee Road, Kolkata 700 020.
� Financial calendar April to March
� 1st quarter results by 3rd/4th week of July
� 2nd quarter results by 3rd/4th Week of October
� 3rd quarter results by 3rd/4th Week of January
� 4th quarter results by 3rd/4th Week of June of next year
� Date of book closure
September 01, 2008, Monday, to September 08 , 2008, Monday
(both days inclusive)
� Listing on stock exchanges
Your Company’s shares are listed on the following stock
exchanges:
1] The Calcutta Stock Exchange
7, Lyons Range, Kolkata-700 001
Email: mop@cse-india.com
Website: www.cse-india.com
2] Bombay Stock Exchange, Mumbai
25, Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai 400 001
Email : is@bseindia.com
Website: www.bseindia.com
� Listing fees
Paid for the year 2007-08 for both the above stock exchanges.
� Stock code – Physical
i. 18003 on The Calcutta Stock Exchange, Kolkata
ii. 515145 on Bombay Stock Exchange, Mumbai
� High / Low share price data
According to the data provided by The Calcutta Stock Exchange,
Kolkata, there has been no transaction in the Company’s equity
shares during the year under review at the said Stock Exchange.
50 | Hindusthan National Glass & Industries Limited
Month High Low Volume(Rs) (Rs) (Shares)
April, 2007 541.45 538.60 25848
May, 2007 541.50 437.00 2306
June, 2007 647.00 435.00 5778
July, 2007 593.75 538.75 9069
August, 2007 656.50 536.00 36660
September, 2007 665.00 546.10 61968
October, 2007 1,195.60 464.00 237114
November, 2007 1,420.00 901.00 253568
December, 2007 1,275.15 958.80 99563
January, 2008 1,801.30 970.05 453473
February, 2008 1,224.50 893.50 66034
March, 2008 967.95 600.25 85122
The details of transactions in the Company’s equity shares at the Bombay Stock Exchange Limited, Mumbai during the year and the
respective high / low price data are as given below:
� Registrar and share transfer agent
In compliance with the SEBI directive, the Company has appointed
M/s. Maheshwari Datamatics (Pvt.) Ltd., as its Registrar and Share
Transfer Agent for all works relating to shares both in physical as
well in dematerialised mode. However, documents relating to
shares are also received at the Company’s registered office at
2, Red Cross Place, Kolkata 700 001, Tel. No: (033) 2254 3100,
Fax No: (033) 2254 3130, e-mail address: financeho@hngil.com
� Share transfer system
The transfer of shares in physical form is processed and
completed by M/s Maheshwari Datamatics Pvt. Ltd. within a
period of fifteen days from the date of receipt thereof, provided
all the documents are in order. In case of shares in electronic
form, the transfers are processed by the NSDL/CDSL through
respective depository participants.
� Dividend
Dividend at 40% i.e. Rs 4 per share has been recommended by
the Board of Directors, at their meeting held on June 25, 2008,
which is subject to the approval of the shareholders and is
expected to be paid by 3rd week of September, 2008.
� Distribution of Share Holding and Share Holding Pattern as on March 31, 2008
No. of equity shares held Folios % Shares %
1 to 500 6639 98.47 221542 2.00
501 to 1000 43 0.64 34452 0.31
1001 to 5000 26 0.39 52429 0.47
5001 to 10000 5 0.07 38846 0.35
10001 and above 29 0.43 10696099 96.86
Grand total 6742 100.00 11043368 100.00
No. of shareholders in: Physical mode 50 6997406 63.36
Electronic mode NSDL 3942 3865280 35.00
CDSL 2750 180682 1.64
Total 6742 100.00 11043368 100.00
Source: www.bseindia.com
Monthly High & Low at Bombay Stock Exchange(HNG vs. Sensex)
260021000
19500
18000
16500
15000
13500
12000
10500
9000
7500
6000
4500
3000
1500
BS
E-S
EN
SE
X
PR
ICE
PE
R S
HA
RE
IN R
UP
EE
S
2350
2100
1850
1600
1350
1100
850
600
350
Apr-0
7M
ay-0
7Ju
n-07
Jul-0
7Au
g-07
Sep-
07O
ct-0
7N
ov-0
7D
ec-0
7Ja
n-08
Feb-
08M
ar-0
8
High Low Sensex-High Sensex-Low Period
541647
594657 665
1196
1420
1275
1801 14677
1645815332
18886
18183
17145
15323
1378014639
139471355412426
14384 14576 14683
15869 15542
17361
2023820204 20498
21207
18895
17228
1225
968
600
894970959901
464546536539435437
539
Hindusthan National Glass & Industries Limited | 51
� Shareholding pattern as on March 31, 2008
Category No. of shares %
Promoters and associates 10040043 90.91
Institutions 332374 3.01
Domestic companies 419944 3.80
Resident individuals 249031 2.26
Foreign residents and NRIs 1976 0.02
Total 11043368 100.00
� Dematerialisation of shares and liquidity
As on March 31, 2008, 4045962 shares comprising 36.64% of the
paid-up capital of the Company are in dematerialised mode, as
compared to 2137748 shares as on March 31, 2007. C. K. Somany
Group i.e. the promoter of the Company, holds around 90.91% of
the paid-up capital of the Company, out of which 3047401 shares
being 27.59% of paid-up capital are held in dematerialised mode
as on March 31, 2008, as compared to 1139547 shares being
10.32% of paid-up capital as on March 31, 2007 and the balance
in the physical form at the end of the year March 31, 2008.
Pursuant to the Scheme of Amalgamation, 6424345 equity shares
of the Company has been issued to the shareholders of erstwhile
Ace Glass Containers Limited subsequent to the Balance Sheet
date. The share capital of the Company now stands to Rs 1746.77
lac as against Rs 1104.35 lac as on March 31, 2008.
� Demat ISIN Number for NSDL and CDSL
INE 952A01014
� Outstanding GDRSs/ADRs/Warrants or any convertible
instruments, conversion date and the likely impact on equity.
None
� Plant locations
The Company has six plants, located at:
1. 2, Panchu Gopal Bhaduri Sarani, Rishra-712 248,
Dist. Hooghly, West Bengal
Phone: (033) 2600 0200, Fax (033) 2600 0333
2. Bahadurgarh–124507, Dist: Jhajjar, Haryana.
Phone: (01276) 221400, Fax (01276) 221666
3. 14, RIICO Industrial Area, Neemrana, Distt. Alwar
Pin - 301705 (Rajasthan), Tel - 01494 - 246712, 513935
Fax - 01494 - 246713
4. P.O. Virbhadra, Rishikesh - 249201,
Dist. Dehradun, Uttarakhand
Phone: (0135) 2470700, Fax (0135) 2470777
5. Thondamanatham Village, Vezhudavoor S.O.
Pondicherry –605 502, Phone: (0413) 2677319,
Fax (0413) 2677366/2677666
6. Nashik Glass Work, F1, MIDC Malegaon,
Dist. Sinnar, Nashik - 422113
Phone: (025511) 228900, Fax (025511) 228999
� Address for correspondence
Company Secretary
Hindusthan National Glass & Industries Limited
2 Red Cross Place, Kolkata 700 001.
Telephone No. (033) 2254 3100, Fax No. 033 2254 3130
Email financeho@hngil.com
� E-mail ID for investors’ grievance
financeho@hngil.com
B. Non-mandatory requirements
� Chairman of the Board
At present, the Chairman of the Company Mr C. K. Somany, does
not have a separate office in the Company. The corporate office
supports the Chairman in discharging his responsibilities.
� Treasury Management Committee
The Board of Directors at its meeting held on May 9, 2005, have
constituted a Committee of its member known as the Treasury
Management Committee to approve and authorise transactions
involving the day-to-day management of the funds with more
efficiency. The Committee comprising Mr Sanjay Somany, Mr
Mukul Somany, Mr R.K. Daga and Mr Dipankar Chatterji are its
members. During the year 2007-08, 64 meetings of the Treasury
Management Committee were held.
� Remuneration Committee
The details of the Committee has already been stated at point no
4 of this report
� Information to shareholders
Half-yearly results including summary of the significant events are
currently not being sent to the shareholders of the Company.
However, quarterly results are posted at the Company’s website,
in addition to being published two newspapers, one in English and
another in vernacular language.
52 | Hindusthan National Glass & Industries Limited
Declaration
� Postal ballot
No resolution is proposed to be passed by postal ballot.
� Code of conduct for prevention of insider trading
Pursuant to the requirements of SEBI (Prohibition of Insider
Trading) Regulations, 1992, as amended, the Company has
adopted a ‘Code of Conduct for Insider Trading’ at the meeting of
the Board of Directors held on June 10, 2002. The Company, its
Directors and designated employees, have complied with the
provisions of the said Code of Insider Trading.
� Code of Conduct for Directors and the senior management
Pursuant to the requirements of Clause 49 of the Listing Agreement
as amended, the Company has adopted a ‘Code of Conduct for
Directors and the senior management’ at the meeting of the Board
of Directors held on October 31, 2005. The said code is also
placed on the website of the Company viz. www.hngindia.com.
The Directors and designated employees of the Company have
complied with the provisions of the said Code of Conduct.
For and on behalf of the Board
Kolkata C.K. Somany
June 25, 2008 Chairman
All the Board Members and the senior management personnel have affirmed their compliance with the ‘Code of Conduct for Members
of the Board and senior management’ for the year 2007-08 in terms of Clause 49(I)(D)(ii) of the Listing Agreement executed with the Stock
Exchanges.
Mukul Somany Sanjay Somany
Dated: June 25, 2008 Joint Managing Director Managing Director
CertificateThe members of Hindusthan National Glass & Industries Limited.
We have examined the Compliance of the conditions of Corporate Governance by Hindusthan National Glass & Industries Ltd. for the
year ended 31st March, 2008 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India.
The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was carried out in
accordance with the guidance note on certification of Corporate Governance (as stipulated in Clause 49 of the Listing Agreement) issued
by the Institute of Chartered Accountants of India and limited to the procedures and implementation thereof, adopted by the Company
for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of the opinion on the
financial statements of the Company.
In our opinion and to the best of information and explanations given to us and the representations made by the Directors and the
management, we certify that the Company has complied in all material aspects with the conditions of Corporate Governance as stipulated
in the above-mentioned Listing Agreement. The framework for risk management and its controls are in the process of being
formalised/updated.
We further state that such compliance is neither an assurance as to future viability of the Company, nor the efficiency or effectiveness with
which the management has conducted the affairs of the Company.
For Lodha and Co.
(Chartered Accountants)
Kolkata (H.K. Verma)
June 25, 2008 Partner
Hindusthan National Glass & Industries Limited | 53
Auditors’ Report To the Members
We have audited the attached Balance Sheet of Hindusthan
National Glass & Industries Limited as at 31st March 2008 and
also the Profit and Loss Account and the Cash Flow Statement
for the year ended on that date, annexed thereto. These financial
statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes, examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by the management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
1. As required by the Companies (Auditor’s Report) Order, 2003,
as amended by the Companies (Auditors Report)
(Amendment) Order, 2004 issued by the Central Government
of India in terms of Section 227(4A) of the Companies Act,
1956 and on the basis of such checks as we considered
appropriate and according to the information and
explanations given to us, we further report that:
i) (a) The Company has maintained proper records
showing full particulars including quantitative details
and situation of fixed assets.
(b) All the assets have not been physically verified by the
management during the year but there is regular
programme of verification, which, in our opinion, is
reasonable having regard to the size of the Company
and the nature of its assets. There were no material
discrepancies with regard to book records in respect
of the assets verified during the year.
(c) During the year, the Company has not disposed off
a substantial part of its fixed assets.
ii) (a) The inventory except stock lying with third parties and
in transit has been physically verified by the
management at regular intervals during the year. In
our opinion and according to the information and
explanations given to us, the frequency of verification
is reasonable.
(b) In our opinion, the procedure for the physical
verification of the inventory followed by the
management is reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of
inventory. As explained to us, discrepancies noticed
on physical verification of inventory were not material.
iii) (a) The Company has not granted any loans, secured or
unsecured, to companies covered in the register
maintained under section 301 of the Act. Therefore
the provisions of clause 4(iii) (a) to (d) are not
applicable to the Company.
(b) The Company had taken unsecured loan from
companies covered in the register maintained under
section 301 of the Companies Act, 1956. The total
number of parties is three and the maximum amount
involved during the year was Rs. 1000 lac and at the
year-end there was no outstanding balance of loan.
(c) The terms and conditions of the aforesaid unsecured
loans were prima facie not prejudicial to the interest
of the Company.
(d) The above loans were interest free.
(e) There was no overdue amount in the aforesaid
unsecured loans.
iv) In our opinion and according to the information and
explanations given to us, having regard to the
explanations that some of the items are of special nature
for which alternative quotations are not available, there
are adequate internal control procedures commensurate
with the size of the Company and nature of its business
with regard to the purchases of inventory, fixed assets
and for the sale of goods and services. During the course
of our audit, no major weakness has been noticed in the
internal control system.
v) (a) To the best of our knowledge and belief and
according to the information and explanations given
to us, we are of the opinion that the transactions that
need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been
so entered.
(b) In our opinion, having regard to the remarks as given
in para (iv) above, the transactions made in
pursuance of contracts or arrangements entered in
the register maintained under Section 301 of the
Companies Act, 1956, and aggregating during the
year to five lac or more in respect of each party have
54 | Hindusthan National Glass & Industries Limited
been at prices which are considered reasonable
having regard to prevailing market price for such
goods and materials.
vi) The Company has not accepted any deposits from the
public during the year.
vii) In our opinion, the Company has an adequate internal
audit system commensurate with its size and nature of
its business.
viii) The Central Government has not prescribed for the
maintenance of cost records under Section 209(1)(d) of
the Companies Act, 1956 in respect of any of the
Company’s product.
ix) (a) The Company is generally regular in depositing
undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees’
State Insurance (except in case of Neemrana unit
where Provident Fund, and Employees’ State
Insurance were deposited after receipt of PF
code/No.) Wealth Tax, Service Tax, Income Tax,
Sales Tax, Custom duty, Excise duty, cess and other
material statutory dues with the appropriate
authorities.
(b) There are no undisputed statutory dues payable for a
period of more than six months from the date these
dues became payable as at 31st March 2008.
(c) According to the information and explanations given
to us, the statutory dues which have not been
deposited as on 31st March 2008 on account of
disputes are as under:
x) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current
or in the immediately preceding financial year.
xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
Name of the Nature of Dues Amount Period to which Forum where dispute
Statute (Rs. in lac) the amount relates is pending
(Financial year)
The Central Excise Excise Duty 7.04 1996-97, 1999-00, 2000-01, Commissioner of Central
Act, 1944 2001-02, 2004-05, 2007-08 Excise Appeals
1116.88 1995-96, 1996-97, 1997-98, CESTAT
1998-99, 1999-00, 2001-02,
2003-04, 2004-05, 2005-06
105.31 2000 – 01 Supreme Court
42.28 1998-99, 2005-06 Assistant Commissioner
Bombay Sales Sales Tax 51.26 1997-98 Sales Tax Tribunal, Mumbai
Tax Act, 1959
112.47 1997-98 Joint Commissioner of Sales
Tax, Nasik
Customs Act, 1962 Export obligation 4.32 2005-06 Director General of
demand against Foreign Trade
Advance licenses
Haryana General Sales Tax 77.52 2002 – 03 Assessing Authority (Jhajjar)
Sales Tax Act
Central Sales Tax Turnover Tax 6.31 1979-1980 Calcutta High Court
Act 1956 and Central Sales Tax 43.40 2002-2003 Deputy Commissioner
respective States’ West Bengal Sales Tax 6.31 2002-2003 (Appeal) Commercial Taxes
Sales Tax Act
Hindusthan National Glass & Industries Limited | 55
xii) According to the information and explanations given to
us, the Company has not granted any loans and
advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii) The Company is not a chit fund or a nidhi mutual benefit
fund/society. Accordingly, the provisions of clause 4 (xiii)
of the Companies (Auditor’s Report) Order, 2003, as
amended by the Companies (Auditors Report)
(Amendment) Order, 2004 are not applicable to the
Company.
xiv) According to the information and explanations given to
us, the Company is not dealing or trading in shares,
securities, debentures and other investments.
Accordingly, the provisions of clause 4 (xiv) of the
Companies (Auditor’s Report) Order, 2003, as amended
by the Companies (Auditors Report) (Amendment) Order,
2004 are not applicable to the Company.
xv) In our opinion, the terms and conditions on which the
Company has given guarantee for loans taken by its
subsidiary company from bank are not prima facie
prejudicial to the interest of the Company.
xvi) According to the information and explanations given to
us, the term loans have been applied for the purpose for
which they were raised.
xvii) According to the information and explanations given to
us and on an overall examination of the Balance Sheet
of the Company, we report that short term fund have not
been used for long-term investment.
xviii) During the year, the Company has not made preferential
allotment of shares to parties and companies covered in
the register maintained under section 301 of the Act.
xix) No secured debenture has been issued during the year.
xx) The Company has not raised any money through a public
issue during the year.
xxi) Based upon the audit procedures performed and
information and explanations given to us, we report that
no fraud on or by the Company has been noticed or
reported during the course of our audit.
2. Attention is invited to Note 2(i) of Schedule S regarding non-
ascertainment and recognition of derivative transactions. The
impact of the above for the reasons mentioned in the said note
could not be ascertained and therefore cannot be commented
upon by us.
3. Further to above, we report that
i) We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purpose of our audit.
ii) The Balance Sheet, Profit and Loss Account and Cash
Flow statement dealt with by this report are in agreement
with the books of account.
iii) In our opinion, proper books of account as required by
law have been kept by the Company so far as appears
from our examination of these books.
iv) In our opinion, the Balance Sheet, Profit and Loss
Account and Cash Flow statement dealt with by this
report excepting AS –1 on “Disclosure of Accounting
Policies’’ on account of derivative transaction comply with
the Accounting Standards referred to in Section 211 (3C)
of the Companies Act, 1956 to the extent applicable.
v) On the basis of the written representations from the
Directors and taken on record by the Board of Directors,
none of the Directors is disqualified as on 31st March,
2008 from being appointed as a Director under Section
274(1)(g) of the Companies Act, 1956.
vi) In our opinion and to the best of our information and
according to the explanations given to us, the said
accounts subject to our remarks as given in para 2 above,
together with the overall impact ,which is not ascertainable
and read together with other Notes on Accounts of
Schedule “S” give the information required by the
Companies Act, 1956 in the manner so required and also
give a true and fair view in conformity with the accounting
principles generally accepted in India:
a) In the case of Balance Sheet, of the state of affairs of
the Company as at 31st March, 2008 and
b) In the case of Profit and Loss Account of the
Company, of the profit for the year ended on that
date.
c) In the case of Cash Flow Statement, of the cash flows
for the year ended on that date.
For Lodha & Co.
Chartered Accountants
H K Verma
Place: Kolkata-700069 Partner
Date: 25th June 2008 Membership No: 55104
56 | Hindusthan National Glass & Industries Limited
The Schedules referred to above form an integral part of Balance Sheet
As per our report of even date
For Lodha & Co. Mukul Somany Sanjay Somany
Chartered Accountants Jt. Managing Director Managing Director
H. K. Verma
Partner Priya Ranjan Ram Raj Soni
Kolkata Company Secretary Chief Financial Officer
June 25, 2008
Balance Sheet As at 31st March, 2008Rs in lac
SCHEDULES As at 31.03.2008 As at 31.03.2007
SOURCES OF FUNDS
Shareholders' Funds
Share Capital A 1746.77 1104.35
Reserves and Surplus B 84612.65 21698.65
86359.42 22803.00
Loan Funds
Secured Loans C 28742.96 17885.09
Unsecured Loans D 13127.61 6883.77
41870.57 24768.86
Deferred Tax Liabilities (Net) 1807.52 4532.10
Total : 130037.51 52103.96
APPLICATION OF FUNDS
Fixed Assets
Gross Block 125746.20 55962.55
Less: Depreciation 41031.42 22471.78
Net Block E 84714.78 33490.77
Capital Work-In-Progress 4510.70 3652.61
Investments F 11458.50 1087.21
Current Assets, Loans and Advances
Current Assets
Inventories G 16414.97 9332.82
Sundry Debtors H 16449.63 8976.90
Cash and Bank Balances I 1678.98 63.96
Loans and Advances and Other Current Assets J 13654.98 4741.43
48198.56 23115.11
Less
Current Liabilities and Provisions
Current Liabilities K 14857.67 7077.93
Provisions L 3987.36 2163.81
18845.03 9241.74
Net Current Assets 29353.53 13873.37
Total 130037.51 52103.96
Significant Accounting Policies and Notes on Accounts S
Hindusthan National Glass & Industries Limited | 57
The Schedules referred to above form an integral part of Profit & Loss Account
As per our report of even date
For Lodha & Co. Mukul Somany Sanjay Somany
Chartered Accountants Jt. Managing Director Managing Director
H. K. Verma
Partner Priya Ranjan Ram Raj Soni
Kolkata Company Secretary Chief Financial Officer
June 25, 2008
Profit and Loss Account For the year ended 31st March, 2008
SCHEDULES 31.03.2008 31.03.2007
INCOMESales (Gross) M 114833.90 59539.68 Less : Excise Duty 12704.21 7653.59
102129.69 51886.09 Other Income N 1113.96 619.43 Increase / (Decrease) in Stock O (424.86) (321.92)
102818.79 52183.60 EXPENDITUREMaterials P 29251.61 14877.35 Manufacturing and Other Expenses Q 52100.07 26981.38
81351.68 41858.73 Profit before Depreciation, Interest and Tax 21467.11 10324.87 Depreciation 7293.97 3550.43 Transfered From Revaluation Reserve (281.21) (237.98)
7012.76 3312.45 Interest and Finance Expenses R 2346.87 1909.68
9359.63 5222.13 Profit before Tax 12107.48 5102.74Less : Provision for Income Tax
- Current Tax 1506.25 - Minimum Alternate Tax 1367.57 - Less: Mat Credit entitlement 1367.57 - Fringe Benefit Tax 36.90 18.01 - Deferred Tax (2663.49) 190.48 - Income Tax of Earlier years (1299.82) (36.46)
Profit after Tax 16033.89 3424.46 Add : Balance brought forward from last year 705.57 907.01Amount Available for Appropriation 16739.46 4331.47 APPROPRIATIONSGeneral Reserve 14850.00 3499.98Proposed Dividend on Equity Shares 698.71Tax (including cess) on Proposed Dividend 118.75 Interim Dividend on Equity Shares 110.43Tax (including cess) on Interim Dividend 15.49Balance carried to the Balance Sheet 1072.00 705.57
16739.46 4331.47 Basic and Diluted Earning Rs per Share 91.79 31.01 (Refer Note No. 10 of Schedule ‘S’)Significant Accounting Policies and Notes on Accounts S
Rs in lac
58 | Hindusthan National Glass & Industries Limited
Cash Flow Statement For the year ended 31st March, 2008
2007-08 2006-07A CASH FLOW FROM OPERATING ACTIVITIES
Net Profit Before Tax and extraordinary items 12107.48 5102.74 Adjustments to reconcile profit before tax to cash provided by operating activities.Depreciation 7012.76 3312.45 Bad Debts & Provision for Doubtful debts 239.25 231.28 Provision for loss in value of current investment 0.17 Interest expenses (Net) 2346.87 1909.68 Dividend income (0.27) (0.26)Liability no longer required written back (95.92) (103.81)Unrealised Foreign Exchange Loss/(Gain) (Net) – (91.21)Realised Foreign Exchange Loss on Term Loans (Net) – 29.39 Interest received (120.29) (187.55)Loss / (Profit) on sale of Fixed Assets (Net) 61.45 34.95 Loss / (Profit) on sale of current Investments (Net) (8.15) (4.84)Operating Profit before working capital changes 21543.35 10232.82 Changes in current assets and liabilitiesLoans and advances (4974.99) (1142.49)Trade and other receivables (4056.07) 8.45 Inventories (441.64) 795.89 Trade and other payables 4316.59 114.10 Net Cash Generated by Operating Activities 16387.24 10008.77 Adjustments for :Direct Taxes paid (115.16) (945.93)Refund received – 81.87 Interest received on Income Tax Refund – 8.03 Fringe Benefit Tax paid (36.75) (17.97)Net Cash from Operating Activities 16235.33 9134.77
B CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Fixed Assets and changes in capital work in progress (13016.03) (6940.44)Proceeds on Disposal of Fixed Assets 161.13 512.31 Sale of Long Term Investments 42.93 –Purchase of Long Term Investments (4367.93) (1000.00)Purchase of Current Investments (5794.44) (4380.00)Sale of Current Investments 5802.59 4384.84 Dividend received 0.27 0.26 Interest received 34.57 222.29 Net Cash from Investing Activities (17136.91) (7200.74)
C CASH FLOW FROM FINANCING ACTIVITIES:Proceeds / (Repayment) from long term borrowings (Net) 812.38 (1827.46)Proceeds / (Repayment) from short term borrowings (Net) 3116.52 1913.25 Interest paid (2331.38) (1883.08)Dividend Paid during the year including Corporate Dividend Tax – (209.34)Net Cash from Financing Activities 1597.52 (2006.63)NET CHANGES IN CASH AND CASH EQUIVALENTS 695.94 (72.60)OPENING CASH AND CASH EQUIVALENTS 983.04 136.56 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 1678.98 63.96(represents cash in hand and bank balances)
Note: 1. The above cash flow Statement has been prepared under the "Indirect Method" as set out in the Accounting Standard 3 (AS-3) -Cash Flow Statements issued by The Institute of Chartered Accountants of India.
2. Previous Years figure's have been regrouped wherever necessary to conform to the Current years.
Rs in lac
As per our report of even date
For Lodha & Co. Mukul Somany Sanjay Somany
Chartered Accountants Jt. Managing Director Managing Director
H. K. Verma
Partner Priya Ranjan Ram Raj Soni
Kolkata Company Secretary Chief Financial Officer
June 25, 2008
Hindusthan National Glass & Industries Limited | 59
Schedules forming part of the Accounts
Schedule - A I SHARE CAPITAL
31.03.2008 31.03.2007
AUTHORISED51,15,00,000 Equity Shares of Rs 10/- each. 51150.00 1150.00 (Previous Year 11500000 shares of Rs 10/- each)
51150.00 1150.00 ISSUED, SUBSCRIBED AND PAID-UP1,10,43,368 (Previous Year 1,10,43,368) 1104.34 1104.34Equity shares of Rs 10/- each fully paid up of which58,10,360 Shares of Rs 10/- each were allotted as fully paid up Bonus Shares by capitalisation of General ReserveShare Suspense Account (pending allotment pursuant to the scheme of arrangement 642.43(Refer Note 32 (d) of Schedule S)Forfeited Shares (Amount Originally paid up @Rs 5/- on 280 Shares) 0.01(Transferred to General Reserve during the year)
1746.77 1104.35
Rs in lac
Schedule - B I RESERVES AND SURPLUS
31.03.2008 31.03.2007
Capital Reserve
As per last Balance Sheet 0.04 0.06
Less: Transfer to General reserve 0.04 0.02 0.04
General Reserve
As per last Balance Sheet 16500.01 13000.01
Add: Adjustment consequent upon amalgamation 31391.22
of erstwhile ACE Glass Container Ltd
[Refer Note No. 32(i)(b) of Schedule S]
Add: Transfer from Capital Reserve 0.04 0.02
Add: Transfer from Profit and Loss Account 14850.00 3499.98
Less: Adjustment on account of Transitional provision
under AS-15 [Refer Note No. 19(i) of Schedule S] 118.63
Less: Loss of erstwhile ACE Glass Containers Ltd for the
year ended 31.03.2007 [Refer Note No. 32(i)(c)(ii) of Schedule S] 3146.66
Less: Carrying Cost of shares held in erstwhile 7.55
Ace Glass Containers Ltd. pursuant to the
Scheme of Amalgamation [Refer Note No. 32(i)(c)(i)] of Schedule 'S'
Less: Merger expenses and others 83.18 59385.25 16500.01
[Refer Note No. 32(iv) of Schedule S]
Revaluation Reserve
As per last Balance Sheet 3388.73 4057.21
Add: Revaluation of Land and Buildings 7,554.80
[Refer Note No. 7(ii) of Schedule S]
Less: Transfer to Profit and Loss A/c 281.21 237.98
[Refer Note No. 7(iv) of Schedule 'S']
Less: Adjustment on account of Sale / Discard of Assets 60.75 10601.57 430.50 3388.73
60 | Hindusthan National Glass & Industries Limited
Schedule - B I RESERVES AND SURPLUS (Contd.)
31.03.2008 31.03.2007
Share Premium
As per last Balance Sheet 1104.30 1104.30
Add: Adjustment consequent upon amalgamation of erstwhile
ACE Glass Container Ltd (Refer Note No. 32(i)(b) of Schedule S) 12,449.54
13553.84 1104.30
Profit and Loss Account
Surplus as per Profit and Loss Account 1072.00 705.57
84612.66 21698.65
Rs in lacSchedules forming part of the Accounts
Schedule - C I SECURED LOANS
Notes 31.03.2008 31.03.2007
I. Rupee term Loans
From Financial Institution
Export Import Bank of India 1 6327.78 2038.89
From Banks
- IDBI Bank Limited 750.00
- State Bank of India 2 2432.00 4166.67
- The Honkong & Shanghai Banking Corporation Limited 3 4562.50
II. Foreign Currency Loans
From Banks
- State Bank of India
Foreign Currency Term Loan - I 229.00
Foreign Currency Term Loan - II 169.82
- The Honkong & Shanghai Banking Corporation Limited - PCFC 4 599.16
- ICICI Bank - External Commercial Borrowing 5 2005.50 2158.50
III. Working Capital Loans From Banks 6 12494.80 8038.31
IV. Loans under Vehicle Finance Scheme
From Banks 7 293.05 322.77
From Others 7 7.13 11.13
V. Interest accrued and due 21.04
28742.96 17885.09
Notes:1) The loans are Secured by first charge ranking pari-passu with charges created and/or to be created on all immovable propertiesby way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.
2) The loans are Secured by first charge ranking pari-passu with charges created and/or to be created on all immovable propertiesby way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders. These loans are alsocollterarlly secured by second charge on Current Assets of the said plants.
3) This includes term loan of Rs 1562.50 lac taken for Nashik plant and is Secured by first charge ranking pari-passu with chargescreated and/or to be created on all immovable properties by way of equitable mortgage and hypothecation of all moveable propertiesboth present and future of Rishikesh, Pondicherry and Nashik Plants, save and except specific assets exclusively hypothecated in favourof respective lenders. Balance Rs 3000 lac are Secured by first charge ranking pari-passu with charges created and/or to be created
Hindusthan National Glass & Industries Limited | 61
Schedules forming part of the Accounts
Schedule - D I UNSECURED LOANS
Schedule - E I FIXED ASSETS
31.03.2008 31.03.2007
a) Short Term Loans
From Banks 8555.45 1750.80
Non Convertible Debentures * 3000.00 2000.00
From Others 27.04 1313.10
b) Other Loans
Interest Free Loans from associate companies 1000.00
c) Trade Deposits 100.10 100.10
d) Sales Tax Deferment Loan 1445.02 719.77
13127.61 6883.77
Note:
* Represents Mibor linked Non-Convertible Debentures privately placed with - JM Mutual Fund (Previous Year- Canbank Mutual Fund)
on all immovable properties by way of equitable mortgage and hypothecation of all moveable properties of Neemrana Plant, save andexcept specific assets exclusively hypothecated in favour of respective lenders.
4) This loan is secured by hypothecation of inventories (both present and future) and book debts and second charge on allimmoveables, moveable properties including land and building of Rishra, Bahadurgarh and Neemrana plants.
5) This loan is Secured by first charge ranking pari-passu with charges created and/or to be created on all immovable properties byway of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh and NeemranaPlants, save and except specific assets exclusively hypothecated in favour of respective lenders.
6) This includes Rs 3893.25 lac secured by hypothecation of inventories (both present and future) and book debts and second chargeon all immoveables, moveable properties including land and building of Rishikesh, Pondicherry and Nashik plants. The balance of Rs 8601.55 lac is secured by hypothecation of inventories (both present and future) and book debts and second charge on allimmoveables, moveable properties including land and building of Rishra, Bahadurgarh and Neemrana plants.
7) Secured by hypothecation of vehicles financed in favour of respective lenders.Rs in lac
GROSS BLOCK DEPRECIATION NET BLOCK
Book Value
PARTICULARS As on Acquired on Additions Deductions/ As at Upto Acquired on For the Deductions / Upto As at As at
01.04.07 Amalgamation Adjustments 31.03.08 01.04.07 Amalgamation Year Adjustments 31.03.08 31.03.08 31.03.07
as on Addition
01.04.06 during
2006-2007
TANGIBLE
1 Land 1102.50 5908.70 7220.59 14231.79 3.23 2.37 5.60 14226.19 1102.50
2 Leasehold Building 9.18 9.18 0.03 0.15 0.18 9.00 9.15
3 Buildings 5108.27 5521.71 1.85 2742.77 2.51 13372.09 1382.45 682.91 393.73 2459.09 10913.00 3725.82
4 Plant and Machinery 48615.43 37597.55 1314.98 10305.03 1796.35 96036.64 20686.26 11880.86 6731.11 1547.06 37751.17 58285.47 27929.17
5 Furniture and Fixtures 111.98 198.86 14.41 26.86 3.10 349.01 51.72 83.35 15.08 0.77 149.38 199.63 60.26
6 Railway Siding 2.09 2.09 2.09 2.09
7 Office and Other 74.68 248.50 53.38 1.09 375.47 27.61 140.23 26.49 0.26 194.07 181.40 47.07
Equipments
8 Vehicles 909.00 110.04 44.54 284.13 60.37 1287.34 314.21 32.36 121.46 32.00 436.03 851.31 594.79
INTANGIBLE
9 Computer Software 29.42 37.16 26.91 10.90 82.59 7.41 33.73 3.57 10.90 33.81 48.78 22.01
55962.55 49622.52 1375.78 20659.67 1874.32 125746.20 22471.78 12856.67 7293.96 1590.99 41031.42 84714.78 33490.77
Previous Year : 53403.52 5043.77 2484.74 55962.55 20427.13 3550.43 1505.78 22471.78 33490.77
62 | Hindusthan National Glass & Industries Limited
Face Value 31.03.2008 31.03.2007
Rs Nos.
(A) Long Term
Trade
Fully Paid-up Equity Shares
Unquoted
Capexil Agencies Ltd. 1000 5 0.05 0.05
Ceramic Decorators Ltd. 10 7 – –
Ace Glass Containers Ltd. (PY 149901400 shares) 10 15.10
HNG Float Glass Ltd. 10 10000 4201.00 1.00
Other Than Trade
Unquoted
Units of CAN FMP 13M-SRI (Close ended) 10 10000000 1000.00 1000.00
Fully Paid-up Equity Shares
In Subsidiary Companies
Glass Equipment (I) Ltd. 100 26400 55.82 55.82
Quality Minerals Ltd. 100 9384 9.38 9.38
The Calcutta Stock Exchange Association Limited 1 8364 167.28
Government Securities
Unquoted
Deposit With Govt. Authorities *
(a) 12 Years National Savings Certificate 0.01 0.01
(b) 7 Years National Savings Certificate 0.01 0.01
(c) 6 Years National Savings Certificate 6.49 5.84
Beneficial Interest in Shares held in HNG Trust 7.55 –
(Refer Note No. 32(e) of Schedule 'S')
Beneficial Interest in Shares held in Ace Trust 6009.35 –
(Refer Note No. 32(f) of Schedule 'S')
(B) Current
Other Than Trade
Quoted
Kajaria Ceramics Ltd. 2 5470 1.56
Total: 11458.50 1087.21
* Rs 0.42 lac since matured but not encashed
Aggregate book value of Unquoted Investments 11456.94 1087.21
Aggregate book value of quoted Investments 1.56
Aggregate market value of quoted Investments 1.56
Note :
1) 33071882 Units of Mutual Funds being current investments purchased and redeemed during the year.
(Previous year 10201956 units) (Refer Note No. 29 of Schedule 'S')
Rs in lac
Schedules forming part of the Accounts
Schedule - F I INVESTMENTS
Hindusthan National Glass & Industries Limited | 63
Schedules forming part of the Accounts
Schedule - G I INVENTORIES(As taken, valued and certified by the Management)
31.03.2008 31.03.2007
Raw Materials 2615.54 750.81
Stores and Spare parts 7229.13 3486.48
(Including in transit Rs 560.02 lac, Previous year Rs 172.48 lac.)
Packing Materials 423.81 225.96
Stock-in-Process 409.76 272.60
Finished Goods 5736.73 4596.97
16414.97 9332.82
Rs in lac
Schedule - H I SUNDRY DEBTORS(Unsecured, considered good unless otherwise stated)
Debts due for a period exceeding six months
Considered good 939.30 669.38
Considered doubtful 991.53 392.80
1930.83 1062.18
Less: Provision for doubtful debts 991.53 392.80
939.30 669.38
Others Debts 15510.33 8307.52
16449.63 8976.90
Schedule - I I CASH AND BANK BALANCES
Cash Balance on hand 29.19 15.85
Cheques in hand 1078.26
Balances With Scheduled Banks
in Current Accounts 513.85 48.11
in Margin Money Accounts * 40.03
in Fixed Deposit Accounts * 17.65
* (Receipts pledged with the banks and government
authorities for Rs 57.18 lac, PY Rs NIL) 1678.98 63.96
64 | Hindusthan National Glass & Industries Limited
Schedule - J I LOANS AND ADVANCES AND OTHER CURRENT ASSETS (Unsecured and Considered good)
31.03.2008 31.03.2007
Loans
To Bodies Corporate 4724.00
Advances recoverable in cash or in kind or for value to be received 2060.65 1083.19
(Net of Doubtful Advances Rs 240.65 lac, Previous Year: Rs NIL)
VAT Credit (Inputs) Account 613.24 393.59
Advance Income Tax 2866.40 1396.75
Tax Deducted at Source 175.80 65.17
Advance FIT 37.66
Mat Credit Entitlement 1367.57
Advance towards equity participation 517.69
Deposits and balances with Government Authorities and Other Departments 1581.33 1199.25
Other Deposits 132.37 85.16
13559.02 4740.80
Other Current Assets
Interest Receivable 85.72
Fixed Assets Held for disposal 10.24 0.63
(at lower of net book value or estimated net realisable value)
13654.98 4741.43
Rs in lacSchedules forming part of the Accounts
Schedule - K I CURRENT LIABILITIES
Sundry Creditors
Dues to Small scale undertaking(s) 121.66
Dues to Micro, Small & Medium Enterprises 55.68
Others 13864.03 6674.90
Subsidiary Companies 715.29 87.88
Interest accrued but not due on Loans 104.25 88.76
Commission to Directors 118.40 100.00
Unclaimed dividend * 0.02 4.73
* This is not due for payment to Investor Education & Protection Fund. 14857.67 7077.93
Schedule - L I PROVISIONS
For Taxation 2111.27 2043.70
For Gratuity and Unavailed Leave 1020.55 119.84
For Fringe Benefit Tax 38.08 0.27
For Proposed Dividend 698.71
For Tax on Proposed Dividend 118.75
3987.36 2163.81
Hindusthan National Glass & Industries Limited | 65
Schedule - M I SALES
31.03.2008 31.03.2007
Finished Goods 113962.18 59353.57
Others 708.69 182.30
General Merchandise Sale 163.03 3.81
114833.90 59539.68
Less: Excise Duty 12704.21 7653.59
102129.69 51886.09
Rs in lacSchedules forming part of the Accounts
Schedule - N I OTHER INCOME
Hire charges 40.54 46.09
Dividends On Trade and Long Term Investments 0.26 0.26
Dividends On Current Investments - other than trade 0.01
Interest on deposits,etc. 61.11 187.55
Income from Derivatives 71.29
Rent 34.38 40.57
Insurance Claims 1.98 0.90
Miscellaneous Receipts 475.15 197.85
Liabilities no longer required written back 95.92 103.79
Profit on Assets Sold/Discarded 15.10 34.41
Profit on sale of current investments - other than trade 8.15 4.84
Foreign Exchange Fluctuation (Net) 310.07 3.17
1113.96 619.43
Schedule - O I INCREASE / (DECREASE) IN STOCK
Closing Stock
Finished Goods 5736.73 4596.97
Work-in-Process 409.76 272.60
6146.49 4869.57
Less :
Opening Stock :
Finished Goods 4596.97
Add: Vested pursuant to Scheme of Amalgamation 1648.06 6245.03 4914.14
Work-in-Process 272.60
Add: Vested pursuant to Scheme of Amalgamation 53.72 326.32 277.35
6571.35 5191.49
Increase / (Decrease) (424.86) (321.92)
Schedule - P I MATERIALS
Raw Materials Consumed 29059.45 14874.25
Purchase of Trading Material 192.16 3.10
29251.61 14877.35
66 | Hindusthan National Glass & Industries Limited
Schedule - Q I MANUFACTURING AND OTHER EXPENSES
31.03.2008 31.03.2007
Stores and Spare Parts Consumed 5767.83 3371.85
Power and Fuel 27187.58 13510.33
Packing Material Consumed and Packing Charges 7605.62 3868.28
Salaries,Wages and Bonus etc 4270.50 2003.10
Contribution to Provident and other Funds 722.79 238.88
Workmen and Staff Welfare Expenses 420.24 237.39
Rent 95.43 29.92
Rates and Taxes 57.83 24.39
Repair and Maintenance :
Buildings 132.87 30.66
Plant and Machinery 1104.51 675.53
Others 209.78 91.28
Freight outwards, transport and Other Selling Expenses 1003.38 855.00
(Net of realisation of Rs 983.56 lac, PY Rs 1498.34 lac )
Commission on Sales 116.10 121.29
Cash Discount on Sales – 2.18
Insurance 147.45 153.44
Charity and Donation 31.00 4.76
Bad Debts/Advances written off 185.81 29.88
Less: Provision for Doubtful Debts / advances written back (195.92) (10.11) – 29.88
Provision for Doubtful Debtors/Advances 249.36 201.40
Provision in value for Current Investments 0.17 –
Excise Duty on Stock (28.13) 327.25
Directors' Remuneration 244.99 214.68
Provision For Loss on Derivative Transaction 313.94 –
Loss on sale/discard of fixed assets 76.55 70.56
Miscellaneous Expenses 2380.39 919.33
52100.07 26981.38
Rs in lacSchedules forming part of the Accounts
Schedule - R I INTEREST AND FINANCE EXPENSES
On Debentures 569.50 515.91
On Term Loans 1510.40 1062.54
Bank and Others 135.19 209.26
Finance Expenses 131.78 121.97
2346.87 1909.68
Hindusthan National Glass & Industries Limited | 67
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
Schedules forming part of the Accounts
1. Significant Accounting Policies
a. Accounting Convention
The accounts, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been prepared
on the basis of the historical cost and on the accounting principles of a going concern. The accounts have been prepared in
accordance with the provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (Accounting
Standards) Rules, 2006.
b. Use of Estimates
The preparation of financial statements require management to make estimates and assumption that affect the reported amount
of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reported
amounts of income and expenses during the year. Difference between the actual results and the estimates are recognised in the
year in which the results are known/materialised.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have been
revalued or at fair value as the case may be.
d. Depreciation and Amortisation
Tangible Assets
i. Depreciation has been provided at the rates specified under Schedule XIV to the Companies Act, 1956 on assets
installed/acquired up to 31st March, 1990 on written down value method and in respect of additions thereafter on straight line
method.
ii. Certain Plant and Machinery have been considered as continuous process plant as defined under Schedule XIV to the
Companies Act, 1956 on the basis of technical evaluation.
iii. Depreciation on increase in value of Fixed Assets due to revaluation is provided on the basis of remaining useful life as
estimated by the valuer on the straight line method and is transferred from Revaluation Reserve to Profit and Loss Account.
iv. Depreciation on incremental cost arising on account of exchange difference is amortised over the remaining life of the assets.
v. Second hand machines are depreciated based on their useful lives as estimated by independent technical experts.
Intangible Assets
vi. Computer Software are amortised over a period of three years.
e. Impairment
Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,
recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assets
belonging to Cash Generating Unit (CGU) exceeds recoverable amount. The recoverable amount is the greater of assets net
selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted
to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and
such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value or the
respective assets, which in case of CGU, are allocated to its assets on a prorata basis.
f. Investments
Long Term Investments are stated at cost, less provision for diminution in value other than temporary, if any. Current Investments
are valued at cost or fair value whichever is lower.
g. Inventories
Inventories are valued at the lower of cost or estimated net realisable value. In respect of Raw Materials, Stores, Spare Parts, Fuel,
Building and Packing Materials the cost include the taxes and duties other than those recoverable from taxing authorities and
68 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
other expenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost include manufacturing
expenses and appropriate portion of overheads. The cost of inventories is determined on the weighted average basis.
Own manufactured moulds used for the manufacture of glass items are recorded at weighted average cost, which includes prime
cost, factory and general overheads and the same are classified as stores and spare parts under inventories.
h. Foreign Exchange Transactions
Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency
monetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon and also on
the exchange differences on settlement of the foreign currency transaction during the year are recognised as income or expenses
and are adjusted to the profit and loss account.
i. Revenue Recognition
i) All Expenses and Incomes are accounted for on mercantile basis except otherwise stated.
ii) Income from Export Incentives is recognised on the basis of certainties as to its utilisation and related realisation.
iii) Sales are inclusive of Packing Charges and Excise Duty but exclusive of Value Added Tax, Rebates, Discounts and Claims
etc.
j. CENVAT / Value Added Tax (VAT) Credit
Cenvat / VAT credit whenever availed on Fixed Assets is set off with the cost of the assets. Other Cenvat / VAT credit wherever
availed is adjusted with the cost of purchases of Raw Material or Stores as the case may be.
k. Employee Benefits
Employee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Plan
for its employees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fund
which are fully funded and administered by the trustees / government. The Company Contributes to the Employees’ Pension
Scheme 1995 for certain categories of employees. Contributions are recognised in the Profit and Loss account on accrual basis.
Long-term employee benefits under define benefit scheme such as gratuity, leave encashment etc are determined at the close of
each year at the present value of the amount payable using actuarial valuation techniques.
Actuarial gains and losses are recognised in the year when they arise.
l. Research and Development
Revenue Expenditure on Research and Development is charged to the Profit and Loss Account in the year in which it is incurred.
m. Subsidies and Grants
Cash Subsidy related to Fixed Assets to the extent received is being credited directly to Capital Reserve and apportioned to
General Reserve over the life of the assets. Subsidy related to the total investment in the project is treated as Capital Reserve. Other
Government grants including incentives etc. are credited to Profit and Loss Account or deducted from the related expenses.
n. Borrowing Cost
Borrowing cost that are attributable to the acquisition/construction of Fixed Assets are capitalised as part of the cost of respective
assets. Other borrowing costs are recognised as an expense in the year in which they are incurred.
o. Income Tax
Provision for Tax is made for current tax, deferred tax and fringe benefit taxes. Current tax is provided on the taxable income using
the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capable
of reversal in subsequent periods are recognised using tax rates and tax laws, which has been enacted or substantively enacted.
Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will
be available against which such deferred tax assets will be realised. In case of carry forward of unabsorbed depreciation and tax
losses, deferred tax assets are recognised only if there is “virtual certainty” that such deferred tax assets can be realised against
future taxable profits.
Hindusthan National Glass & Industries Limited | 69
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
p. Lease
Where the Company is the lessee, finance leases, which effectively transfer to the Company substantially all the risks and benefits
incidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of the minimum lease
payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against
income. Lease management fees, legal charges and other initial direct costs are capitalised.
Leases rentals in respect of assets taken under finance lease up to March 31, 2001 are amortised over the total term of the lease
(including extended secondary lease term).
Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified
as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis
over the lease term.
q. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result
of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosed
in the financial statements. Contingent Liabilities, if material are disclosed by way of notes.
2007-08 2006-07
2. Contingent liabilities not provided for
a) Outstanding Bank Guarantees 1384.86 1006.31
b) Income Tax matters in respect of erstwhile AGCL under dispute. 3.41 Nil
c) Sales Tax matter under Appeals 214.25 Nil
d) Excise Duty demand/Show Cause notices issued against which the
Company has preferred appeals/replies and which in the opinion of
the management is not tenable. 1703.25 349.11
e) Cases pending with Labour Courts (to the extent ascertainable) 549.59 Nil
f) 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
g) Amount of duty against Export Obligation in respect of exemption availed
against Advance License Scheme. 4.32 74.48
h) Other Claims against the Company not acknowledged as debt. 26.10 26.40
i) In respect of a derivative transaction with Kotak Mahindra Bank Ltd.
(the bank) the Company has challenged its validity and legality.
The matter is sub-judice. Based on the legal advice, the contract is void
and not tenable. The loss in respect of above on mark to market basis is
indeterminable. The claims raised (periodic) by the bank is for Rs 404.18 lac 404.18 Nil
j) Corporate guarantee to bank/ government authorities on behalf of an
Associate for borrowing availed. Nil 2500.00
k) In respect of Neemrana plant a notice has been received from civil court
filed by creditors of Haryana Sheet Glass Ltd. demanding their outstanding
payments and stating that plant cannot be transferred unless their dues
are paid. However the matter is sub-judice.
Rs in lac
70 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
2007-08 2006-07
l) Counter Guarantee furnished to Government and other authorities on
behalf of following Companies:
i) SPL Ltd. Nil 12.00
ii) Glass Equipment (India) Ltd. (Subsidiary Company) 381.00 381.00
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 b) to k) is dependent upon the outcome of
final judgments / decisions.
3. Capital commitments 1212.88 1363.52
(Net of advance of Rs 356.46 Lac, previous year Rs 248.65 Lac)
4. Capital Work-in-Progress includes Pre-operative expenses pending allocation:
i) Salary and Wages 23.99 1.13
ii) Power and fuel 23.02 8.03
iii) Miscellaneous Expenses 31.21 0.22
iv) Interest on term loan 239.25 121.82
Add: Brought forward from previous year 163.97 32.77
Total carried forward 481.44 163.97
5. During the year the Company has acquired all the fixed assets and inventories (excepting finished goods) of glass unit situated
at Neemrana of Haryana Sheet Glass Limited for a total consideration of Rs 2500 lac. Allocation of cost on plant and machinery
has been carried out on the basis of the value determined by the approved valuer, Land and Buildings on the basis of the
consideration paid and inventories as estimated by the management.
6. In respect of Fixed Assets acquired from Larsen & Toubro Limited by the erstwhile Ace Glass Containers Limited under the Business
Transfer Agreement, which are estimated to have lower residual lives than that envisaged as per the rates provided in Schedule
XIV of the Companies Act 1956, depreciation has been provided based on the estimated shorter residual lives as follows:
Rates as prescribed by Rates of Depreciation
Particulars of Fixed Assets Schedule XIV to the on assets applied
Companies Act, 1956
Buildings (other than factory buildings) 3.34 5.21
Factory Buildings 1.63 2.04
Plant and Machinery
Used for single shift operations 4.75 11.44
Continuous Process Plant 5.28 11.44
Used for Triple Shift operations 10.34 11.44
Direct Fire Glass Melting Furnace working on Triple Shift Operations 16.21 16.21
Furniture & Fixtures 6.33 17.37
Vehicles 9.50 9.50
Computers 16.21 17.95
These assets originally acquired by the erstwhile Ace Glass Containers Limited (AGCL) and vested to the Company pursuant to
the Scheme of Amalgamation. The practice of charging depreciation on these assets is consistently followed.
Rs in lac
Hindusthan National Glass & Industries Limited | 71
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
2007-08 2006-07
7. i) Land and Buildings of Rishra and Bahadurgarh unit were revalued by an
approved valuer on 1.4.92 on current replacement cost basis. Accordingly,
net amount transferred to Revaluation Reserve Account. 3337.19 3337.19
ii) During the year Land and Buildings of Rishra and Bahadurgarh unit were
revalued by an approved valuer on 31.03.06 on current replacement cost
basis. Accordingly, net amount transferred to Revaluation Reserve Account. 7554.80 Nil
iii) Plant and Machinery of Rishra and Bahadurgarh unit were revalued by an
approved valuer, on 1.4.95 on current replacement cost basis. Accordingly,
net amount transferred to Revaluation Reserve Account. 4831.31 4831.31
iv) Depreciation transferred from Revaluation Reserve Account to
Profit and Loss Account. 281.21* 237.98
* Include Rs 116.43 for the year ended 31.03.2007
8. Miscellaneous Expenses include
a) Payment to Statutory Auditors:*
i) Audit Fees 9.00 3.30
ii) Tax Audit Fees 1.50 1.20
iii) Management Services and Certification work 2.00 1.64
iv) Reimbursement of Expenses 0.71 0.39
b) Directors Travelling and Other Expenses 33.47 37.06
* excluding Service Tax
9. Sundry Creditors include Acceptances 392.14 Nil
10. Earning per share
Profit after Tax (Rs In Lac) 16033.89 3424.46
Number of shares outstanding 17467713 11043368
Earning per share (Basic) (Rs) 91.79 31.01
11. Computation of Net Profit in accordance with Section 198 of the
Companies Act, 1956 and Commission payable to Directors
Profit before tax as per Profit and Loss Account 12107.48 5102.74
Add: Directors' Remuneration 126.59 114.68
Executive Directors’ Commission 110.40 96.00
Non Executive Directors' Commission 8.00 4.00
Total 12352.47 5317.42
Profit under section 198 of the Companies Act, 1956. 12352.47 5317.42
Commission Payable
a) To the Managing Director @1% of Net Profit restricted to Annual Salary 55.20 48.00
b) To the Joint Managing Director @1% of Net Profit restricted to Annual salary 55.20 48.00
c) To the Non Executive Directors @1% of Net Profit restricted to
Rs 1.00 Lac per Director (Previous Year Rs 0.50 Lac per Director) 8.00 4.00
12. Directors' Remuneration include:
i) Salaries 110.40 96.00
ii) Contribution to Provident and Other Funds 13.25 11.52
iii) Other Perquisites 2.94 7.16
iv) Commission 118.40 100.00
Rs in lac
72 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
13. Financial and Derivative Instruments
a) The Company has entered into certain currency swap transaction, the cash flows arising there from are recognised in the
books of account as and when the settlements takes place in accordance with the terms of the respective contracts over the
tenure thereof. All derivative and financial instruments acquired by the Company are for hedging purpose only. However, in
pursuance of announcement dated March 29, 2008 of the Institute of Chartered Accountants of India on “Accounting for
derivatives” loss on account of derivative transaction as on March 31, 2008 stood at Rs 313.94 lac as estimated by the
management, arising from hedging transaction undertaken by the Company has been provided for.
2007-08 2006-07
b) Outstanding particulars of derivative instruments 3993.25 1755.48
(CY: One deal with regard to option trade in US $ 4 million, Two deals with
regard to Currency Swap in CHF 5.93 million; PY: One deal with regard to
Currency swaps in US$ 2 million, One deal with regard to option
in EURO 1.5 million)
c) Foreign currency exposure outstanding as on March 31, 2008 which
has not been hedged by the derivative instruments
Loans (CY: US $ 23.18 million; PY: US$ 16.92 million) 9297.11 7372.02
Creditors (CY: US $ 3.47 million, EURO 0.58 million, GBP 0.20 million,
AUD 0.002 million; PY: US$ 1.97 million, EURO 0.88 million) 1779.73 1368.24
Debtors (CY: US $ 1.51 million; PY: US$ 0.32 million) 1069.01 137.92
d) Net Gain / (Loss) on account of exchange difference adjusted to the Nil 54.80
carrying amount of fixed assets/capital work-in-progress.
e) The amount of Exchange Gain/(Loss) on foreign Currency transaction 310.07 3.17
adjusted to respective heads of accounts of the Profit and Loss Account.
14. a) Electricity duty waiver benefit under West Bengal Incentive Scheme 2004 Nil 30.52
and subsidy received under The West Bengal Incentive to Power Intensive
Industries Scheme 2005 has been credited to Power and Fuel Account.
b) Amount included in VAT Credit Inputs Account shown under Loans and 411.40 301.01
Advances can be utilised only after repayment of corresponding amount
of Sales Tax Deferred Loan.
Rs in Lac
15. i) The breakup of Deferred Tax Assets and Deferred Tax Liabilities is as given below : (Rs In Lac)
Opening as on (Charge)/ Credit Closing as at
01.04.2007 during the year 31.03.2008
Deferred Tax Assets
Brought Forward Losses and unabsorbed depreciation 0.00 1956.04 1956.04
Expenses Allowable on Payment Basis 173.08 677.44 850.52
Total Deferred Tax Assets 173.08 2633.48 2806.56
Deferred Tax Liabilities
Depreciation and related items 4705.18 (91.09) 4614.09
Total Deferred Tax Liabilities 4705.18 (91.09) 4614.09
Net Deferred Tax Liabilities (4532.10) 2724.57 (1807.52)
ii) During the year the Company has provided Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and
accordingly, based on evidences MAT Credit of Rs 1367.57 has been recognised in these accounts.
Hindusthan National Glass & Industries Limited | 73
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
Sl. No. Name of the Company No. of Shares Loans (Rs lac)
1) Noble Enclave and Towers Pvt. Ltd. 1533544 1800.00
2) Topaz Commerce Ltd. 1299816 1800.00
16. Disclosure pursuant to clause 32 of Listing Agreement (Rs In Lac)
Outstanding as on Maximum balance
31.03.2008 outstanding during the year
1) No interest or interest below the rates specified in section 372 A 23.88 23.88
of Companies Act 1956*
2) Repayment beyond seven years or no repayment schedule Nil Nil
3) Repayment on Demand 4500.00 4528.84
4) Loan to Associates Nil Nil
5) Investment by Associates Nil Nil
Notes:
1. Advance to employees pursuant to general business practice and employees welfare.
2. Interest free advances in the nature of loans and advances given to employees as per general rules of the Company have not
been considered.
17. Investment by the loanee in the shares of the Company:
None of the loanees have, per se, made investments in shares of the Company. The Investments represent share of the Company
held by these companies prior to the loans granted to these Companies.
18. During the Year, the Company has incurred Rs 7.91 lac (previous year Rs 3.20 lac on account of Research and Development
expenses, which has been charged to Profit and Loss Account.
19. As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard
are given below:
i. Effective 1.4.2007, the Company has adopted revised Accounting Standard 15 on “Employee Benefits” notified in the
Companies (Accounting Standards) Rules, 2006. The effect of transitional liability of Rs 78.23 lac (net of tax of Rs 40.28 lac)
on account of gratuity and Rs 40.40 lac (net of tax of Rs 20.80 lac on account of leave pay as required by AS-15 has been
adjusted to opening balance of General Reserve of the Company.
ii. The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards)
Rules, 2006, are given below:
Defined Contribution Scheme
Contribution to Defined Contribution Plan, recognised for the year are as under:
(Rs in Lac)
Employer’s Contribution to Provident Fund 147.75
Employer’s Contribution to Pension Fund 204.72
Employer’s Contribution to Superannuation Fund 14.89
The guidance on implementing Accounting Standard (AS-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 aforesaid 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.
74 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
Defined Benefit Plan
The employees’ gratuity fund scheme managed by Birla Sun Life Insurance 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
obligation for leave encashment is recognised in the same manner as gratuity.
I. Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances
thereof are as follows: (Rs in Lac)
Gratuity Gratuity Leave Encashment
Funded Unfunded Unfunded
Liability at beginning of the year 527.51 588.57 148.74
Current Service Cost 46.77 52.57 29.00
Interest Cost 42.83 52.62 54.83
Actuarial (Gain) / Loss 49.51 59.43 2.38
Benefits paid 47.33 26.31 36.94
Liability at the end of the year 619.29 726.88 198.01
III. Expense recognised in the Income statement (Under the head “Contribution to provident and other funds” – Refer
Schedule Q) (Rs. in Lac)
Gratuity Gratuity Leave Encashment
Funded Unfunded Unfunded
Current Service Cost 46.77 52.57 29.00
Interest Cost 42.83 52.62 54.83
Expected Return on plan assets 43.02 Nil Nil
Net Actuarial (Gain) / Loss to be recognised 28.57 59.43 2.38
Expenses recognised in Profit and Loss account 75.15 164.62 86.21
IV. Balance Sheet Reconciliation (Rs. in Lac)
Gratuity Gratuity Leave Encashment
Funded Unfunded Unfunded
Opening Net Liability (10.18) 588.57 148.74
Expenses as above 75.15 164.62 86.21
Employers Contribution 43.05 26.31 36.94
Amount Recognised in Balance Sheet 21.92 726.88 198.01
II. Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:
(Rs in lac)
Gratuity (Funded)
Fair value of plan assets at the beginning of the year 537.70
Expected return on plan assets 43.02
Actuarial Gain / (Loss) 20.94
Employer contribution 43.05
Benefits paid 47.33
Fait value of plan assets at the end of the year 597.37
Total Actuarial Gain / (Loss) to be recognised
Hindusthan National Glass & Industries Limited | 75
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
V. Compensated Absences
The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the Company
as at March 31, 2008 is Rs. 198.01 lac.
VI. Principal Actuarial assumptions at the Balance Sheet Date (Rs. in Lac)
Gratuity Gratuity Leave Encashment
Funded Unfunded Unfunded
Mortality Table LICI 1994-1996 LICI 1994-1996 LICI 1994-1996
Discount rate (per annum) 8.50 % 7.50 % 8.50 % / 7.50 %
Expected rate of return on plan assets (per annum) 8.00 % 8.00 % 0.00 %
Rate of escalation in salary (per annum) – 5.00 % 5.00 %
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 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 2008-09 is yet to be determined.
20. The Company’s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management
this is only reportable segment, as per Accounting Standard 17 on Segment Reporting, issued under Companies (Accounting
Standards) Rules,2006.
Geographical Segment
The following table shows the distribution of the Company’s Sales by Geographical market.
21. The accounts of some of the customers are pending reconciliation / confirmation and the same have been taken as per the
balances appearing in the books. A provision of Rs. 991.53 Lac 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.
22. In the opinion of the Management/Board of Directors, the “Current Assets Loans and Advances” have a value on realisation in the
ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.
Sales Revenue by Geographical Market (Rs. in Lac)
Particulars 2007-2008 2006-2007
Domestic Market 109628.28 57479.05
Overseas Market 4333.90 1874.52
Total 113962.18 59353.57
Sundry Debtors: The following table shows the distribution of the Company’s debtors by Geographical Market: (Rs in Lac)
Particulars 2007-2008 2006-2007
Domestic Market 15876.30 8793.44
Overseas Market 573.33 183.46
Total 16449.63 8976.90
76 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
23. Loan to bodies Corporate include Rs. 4500 lac with Companies in which directors of the Company are interested as members/
directors. These loans were given by the erstwhile AGCL and none of the directors of the Company was director in the erstwhile
AGCL and accordingly, as advised legally, the provisions of section 295 of the Companies Act, 1956 are not applicable with regard
to these loans.
24. 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 except in certain cases and 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:
(Rs. in Lac)
1. Principal amount outstanding at the end of the year Rs. 140.40
2. Interest amount due at the end of the year Rs. 0.33
3. Interest paid to suppliers Rs. Nil
25. Export benefits, Insurance and other claims have been accounted for on accrual basis on acceptance/ascertainment of amount
thereof. Profit or loss on sale of Raw Materials and Stores has been adjusted in consumption.
26. Stores and Spare Parts consumption includes materials consumed for Repairs and Replacement.
27. Stores and Spare Parts also includes items, which are lying since earlier years. A provision of Rs. 618.03 lac towards
obsolescence is carried in the books and management is of the opinion that the same is adequate and no further provision is
required there against.
28. Related Party Disclosures as identified by the management in accordance with the Accounting Standard – 18 issued by the
Institute of Chartered Accountants of India and effective from April 1, 2001.
A) Subsidiary Companies
i) Glass Equipment (India) Limited
ii) Quality Minerals Limited
B) Associates
i) Ace Glass Containers Limited (since amalgamated with the Company)
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 (Relative of 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) Ceramic Decorators Limited
ii) HNG Float Glass Ltd.
iii) Microwave Merchants Private Limited
iv) Mould Equipment
v) Noble Enclave and Towers Private Limited
vi) Rungamattee Trexim Private Limited
vii) Somany Foam Ltd.
viii) Spotme Tracon Private Limited
ix) Topaz Commerce Limited
Hindusthan National Glass & Industries Limited | 77
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
The aggregate amount of transactions with the related parties as mentioned in (A) above is as given hereunder: (Rs in Lac)
2007-2008 2006-2007
Sale of Goods
Glass Equipment (I) Ltd 8.90 13.01
Purchase of Fixed Assets
Glass Equipment (I) Ltd 954.92 537.59
Purchase of Goods
Glass Equipment (I) Ltd 1104.24 533.93
Quality Minerals Limited 237.06 110.46
Receiving of Services
Glass Equipment (I) Ltd 48.06 18.55
Provision of Facilities
Glass Equipment (I) Ltd 16.00 16.00
Dividend Received
Glass Equipment (I) Ltd 0.26 0.26
Counter Guarantees Given
Glass Equipment (I) Ltd 381.00 381.00
Counter Guarantees Taken
Glass Equipment (I) Ltd 50.00 50.00
Payables
Glass Equipment (I) Ltd 658.58 52.18
Quality Minerals Limited 55.42 35.70
The aggregate amount of transactions with the related party as mentioned in (B) above is as given hereunder:
2007-2008 2006-2007
Sale of Fixed Assets N.A * 59.79
Sale of Goods N.A * 192.16
Interest Received N.A * 59.18
Purchase of Fixed Assets N.A * 2.94
Purchase of Goods N.A * 139.67
Provision of Facilities N.A * 158.19
Lending - Inter – Corporate Deposit N.A * 5514.00
Receivables N.A * 138.54
Guarantee given against borrowings N.A * 2500.00
(* Since Amalgamated with the Company)
The aggregate amount of transactions with the related parties as mentioned in (C) above is as given hereunder:
Remuneration 2007-2008 2006-2007
1. Mr Sanjay Somany 117.02 101.76
2. Mr Mukul Somany 117.02 101.76
3. Mr Bharat Somany 1.80 1.44
78 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
The aggregate amount of transactions with the related parties as mentioned in (D) above is as given hereunder:
2007-2008 2006-2007
Receiving of Services
1. Ceramic Decorators Ltd 89.08 68.99
2. Mould Equipment 212.06 174.32
Sale of Goods
Somany Foam Ltd Nil 0.02
Sale of Fixed Assets
Somany Foam Ltd 1.05 Nil
Purchase of Fixed Assets
Somany Foam Ltd. 1.33 Nil
Purchase of Goods
1. Mould Equipment 23.98 70.64
2. Somany Foam Ltd. 1.61 Nil
Lending- Intercorporate Deposit
1. Microwave Merchants Private Limited 900.00 Nil
2. Noble Enclave and Towers Private Limited 1800.00 Nil
3. Topaz Commerce Limited 1800.00 Nil
Loans Taken:
Ceramic Decorators Ltd. 64.00 Nil
Rent Received
1. Mould Equipment 13.20 9.60
Interest Received
1. Microwave Merchants Private Limited 7.67 Nil
2. Noble Enclave and Towers Private Limited 14.14 Nil
3. Topaz Commerce Limited 15.48 Nil
Interest paid
1. Ceramic Decorators Ltd. 9.84 Nil
Payables
1. Ceramic Decorators Ltd. 77.36 110.12
2. Mould Equipment 6.30 36.31
3. Noble Enclave & Towers Pvt. Ltd. Nil 800.00
4. Rungamattee Trexim Pvt. Ltd. Nil 100.00
5. Spotme Tracon Pvt. Ltd. Nil 100.00
Receivables
1. HNG Float Glass Ltd. 0.00 517.69
2. Microwave Merchants Private Limited * 905.93 Nil
3. Noble Enclave and Towers Private Limited* 1810.93 Nil
4. Somany Foam Ltd 0.04 Nil
5. Topaz Commerce Limited* 1811.98 Nil
*Companies in which directors are interested as member /director(s).
Hindusthan National Glass & Industries Limited | 79
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
29. Units of Bonds & Mutual Funds purchased and redeemed/sold during the year (Face value of Rs 10 each, except otherwise
stated) (Rs in Lac)
2007 - 2008 2006 - 2007
Sl. No. Name of Fund No. of Units Cost No. of Units Cost
a) Birla Cash Plus Institutional Growth Plan Nil Nil 1503601 300.00
b) Deutsche Insta Cash Plus Fund Nil Nil 1363054 150.00
c) RLF-Treasure Plan-Retail Option Nil Nil 878102 150.00
d) Kotak Mutual Fund Nil Nil 3740072 550.00
e) UTI Liquid Cash Plan Institutional-Growth Nil Nil 125071 1500.00
f) JM Financial Mutual Fund Nil Nil 2485213 500.00
g) UTI Floating Rate Fund Nil Nil 106843 1230.00
h) Sardar Sarovar Narmada Nigam Ltd DDB-2014 69 34.55 Nil Nil
i) Prudential ICICI Liquid 9931 1.74 Nil Nil
j) Birla Cash Plus Fund 1437485 300.00 Nil Nil
k) ING Vyasya Liquid Fund 4186735 500.00 Nil Nil
l) Birla Sun Life Cash Morgan Fund 10687377 1900.00 Nil Nil
m) HDFC Liquid Fund 6700893 1025.74 Nil Nil
n) UTI Liquid Cash Plan 49848 625.00 Nil Nil
o) HDFC Floating Rate Income Fund 7602172 1099.26 Nil Nil
p) Kotak Floater Short Term Plan 2397372 300.00 Nil Nil
Total 33071882 5786.29 10201956 4380.00
30. a) The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Block 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 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 There is no escalation clause
in the lease agreement for vehicles.:
Particulars Lease payments Present value
(in Rs lac) (in Rs lac)
Not later than one year 18.36 16.39
Later than one year and not later than five year 19.99 63.60
Later than five year 45.24 1.74
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.
31. Details of Products Manufactured, Turnover, Stock, Raw Material Consumed etc.
a. Capacities and Actual Production:
2007 - 2008 2006 - 2007
Installed Capacity Actual Production Installed Capacity Actual Production
I. Glass Plants
a) Glass Bottles and Vials 849525 4046387 489025 2942694
b) Pressed Tumblers at Bahadurgarh 5000 Nil 5000 Nil
80 | Hindusthan National Glass & Industries Limited
Notes:
1. Installed Capacity has been given in MT and Actual Production has been given in '000 pcs.
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.
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
b. Finished Goods, Stocks and Sales: (Rs in lac)
SALES * STOCKS
2007 - 2008 2006 – 2007 2007 – 2008 2006 – 2007**
Unit Qty. Value Qty. Value Qty. Value Qty. Value
Bottles 000 Pcs 4243567 113961.15 2907210 59352.01 275382 5735.68 412020 6243.58
Tumblers 000 Pcs 24 1.03 17 1.56 118 1.05 141 1.45
Others # 871.72 186.11
Total 4243591 114833.90 2907227 59539.68 275500 5736.73 412161 6245.03
* Sales includes breakages of bottles 17733 (P.Y. 1798) (‘000 pcs)
** Includes stocks vested pursuant to scheme of amalgamation Qty 47522 (‘000 pcs) and Value Rs 1648.06 lac.
# Others include General Merchandise Sale amounting to Rs 163.03 lac (PY Rs 3.81 lac) and sale of services Rs 708.69 lac.
(Previous year Rs 182.30 lac).
d. a) Raw materials consumed * (Rs in Lac)
2007-2008 2006-2007
Quantity Value ITEM Unit Quantity Value
316354 4131.34 Silica Sand MT 195444 2316.83
109442 12903.40 Soda Ash MT 66886 6921.41
232458 8049.13 Cullet MT 113889 3719.43
3914.85 Others MT 85813 1855.08
28998.72 Total 14812.75
* Excluding Rs 60.73 Lac (Previous Year Rs 61.50 Lac) being raw material processing charges.
c. Details of Purchases and Sales of General Merchandise: (Rs in Lac)
2007-2008
Description Unit Opening Purchase Sales Closing Stock
Qty Value Qty Value Qty Value Qty Value
Float Glass Sq Mt. – – 26580.74 97.46 14560.24 57.23 12020.54 44.16
Roop Cap ‘000 pcs 90 1.67 90 2.44 – –
Glass Bottle ‘000 pcs 3057 93.03 3057 103.36
Total – – – 192.16 – 163.03 44.16
2006-2007
Description Unit Opening Purchase Sales Closing Stock
Qty Value Qty Value Qty Value Qty Value
Glass Bottles '000 pcs. – – 26 1.59 26 1.80 – –
Roop Cap ‘000 pcs. 90 1.50 90 2.01 – –
Total – – – 3.10 – 3.81 – –
Hindusthan National Glass & Industries Limited | 81
32. Amalgamation of Ace Glass Containers Limited(i) Pursuant to Scheme of Amalgamation and reorganisation of capital (the Scheme) under Section 391 to 394 of the Companies
Act 1956, with effect from April 1, 2006 (the Appointed Date), Ace Glass Containers Limited (AGCL) has been merged with theCompany. The erstwhile AGCL is engaged in manufacturing and sale of container glass.
The Scheme was sanctioned by the Hon’ble High Court at Calcutta vide its Order dated April 7, 2008 and by the Hon’ble HighCourt at Delhi vide its Order dated March 19, 2008. The Scheme became effective on April 28, 2008.
The amalgamation has been accounted for under the purchase method as prescribed by Accounting Standard 14 on“Accounting for Amalgamation” as notified by Companies (Accounting Standards) Rules, 2006. Pursuant to the Scheme:
a) The assets, liabilities, rights and obligations of erstwhile AGCL have been vested with the Company with effect from April1, 2006. All assets and liabilities (other than fixed assets and investments) of erstwhile AGCL have been recorded at theirrespective values as appearing in the books of the erstwhile AGCL as on March 31, 2006. All fixed assets and investmentsof the erstwhile AGCL have been recorded at their fair values as of the appointed date.
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
b) Value of raw materials, Spare Parts and components consumed (As certified): (Rs in lac)
2007-2008 2006-07
Raw Materials Spare Parts * Raw Materials Spare Parts *
Value % Value % Value % Value %
6502.61 22.42 1219.43 27.08 Imported 5201.30 35.11 670.23 27.36
22496.11 77.58 3282.81 72.92 Indigenous 9611.45 64.89 1779.64 72.64
28998.72 100.00 4502.24 100.00 Total 14812.75 100.00 2449.87 100.00
* Excluding Rs 1265.59 lac (Previous Year Rs 921.98 lac) being Stores consumption.(Rs in Lac)
2007-2008 2006-2007
E C.I.F. Value of Imports Raw Materials 5698.52 4335.33Components, Spare Parts and Stores etc. 1497.50 895.57Capital Goods (including CWIP) 1939.26 3231.02
F Expenditure in Foreign CurrencyTravelling Expenses 29.07 28.04Selling Commission 46.85 50.30Finance Charges 164.83 81.54Consultancy Charges 5.34 –Repairs 6.47 3.63Professional Charges 19.62 5.94Others 0.06
G Earnings in Foreign CurrencyF.O.B. Value of Exports 4032.46 2203.03
b) Following adjustments have been carried out in respect of assets and liabilities of erstwhile AGCL
Rs lac Rs lac
Assets (other than Fixed Assets and Investments) taken over at book value 45073.95
Fixed Assets and Investments taken at Fair Value 41415.13
Total Assets as recorded in the books of the Company 86489.08
Less : Book value of Liabilities as on 31.03.2006 23074.66
Excess of Assets over liabilities taken over by the Company (a) 63414.42
82 | Hindusthan National Glass & Industries Limited
Rs lac Rs lac
Debit Balance in Profit and Loss Account as on 31.03.2006 23977.55Less : Capital Reserve 5046.30Balance of Loss adjusted from (a) above (b) 18931.25Net Balance after adjustment as above (a – b) 44483.17Less: Issue of Equity Shares (Share Suspense Account) 642.43
Securities Premium Account vested 12449.54 13091.97Balance Transferred to General Reserve of the Company 31391.21
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
c) (i) Out of 149901400 Equity Shares held in erstwhile AGCL 74950700 equity shares were cancelled as provided in the schemeand carrying cost of such shares amounting to Rs 7.55 lac has been adjusted against the General Reserve of the Company.
(ii) The erstwhile AGCL had carried on all its businesses and activities for the benefit of and in trust for, the Company from 1stApril 2006. Thus the Profit or Income accruing or arising to erstwhile AGCL, or expenditure or losses arising or incurred byit from 1st April 2006 are treated as expenditure or loss, as the case may be of the Company.
The losses of the erstwhile AGCL for the year ended 31st March 2007 have been deducted from the General Reserve ofthe Company. Current year’s transactions of the erstwhile AGCL have duly been incorporated in the current year under therespective heads of accounts of the Company.
d) 6424345 number of Equity Shares of Rs 10 each of the Company relating to the Equity Share Capital of the erstwhile AGCLas on 01.04.2006 have been issued 1(one) equity share as fully paid up against 35 fully paid Equity Shares held by the membersof the erstwhile AGCL. The face value of such shares issued subsequent to the Balance Sheet date have been shown asShare Capital Suspense.
e) 2141448 numbers of Equity Shares to be issued by the Company in lieu of 74950700 number of Shares held by the Companyin the erstwhile AGCL, will be transferred to a trust for the sole benefit of the Company. Accordingly, the cost of the aforesaidinvestments of the Company has been included in “ Beneficial Interest in Shares held by HNG Trust” under “Investments”.
f) i) 1368872 numbers of Shares of the Company held by the erstwhile AGCL have been transferred to a trust for the benefitof the Company. Accordingly, Rs 6009.35 lac being the fair value of the aforesaid shares have been included in “BeneficialInterest in Shares held by Ace Trust” under “Investments”.
ii) Pursuant to the sanctioned scheme Rs 31391.21 lac has been transferred to General Reserve. The said amount as pergenerally accepted accounting practices would otherwise had been added to the Capital Reserve.
iii) In view of the aforesaid amalgamation with effect from 01.04.2006, the figures for the previous year are not comparablewith figures for the Current Year.
iv) In terms of the Scheme, Rs 83.19 lac being expenses attributable to the implementation of the Scheme incurred by theCompany have been adjusted against the General Reserve of the Company.
33. Figures are expressed in Rupees lac and have been rounded off to the nearest thousand.
34. Figures for previous year have been regrouped and/or rearranged wherever considered necessary.
35. Schedule "A" to "L" and "S" form part of Balance Sheet and Schedule "M" to "S" form part of Profit and Loss Account.
As per our report of even date
For Lodha & Co. Mukul Somany Sanjay Somany
Chartered Accountants Jt. Managing Director Managing Director
H. K. Verma
Partner Priya Ranjan Ram Raj Soni
Kolkata Company Secretary Chief Financial Officer
June 25, 2008
Hindusthan National Glass & Industries Limited | 83
Signature to Schedule ‘A’ to ‘S’
As per our report of even date
For Lodha & Co. Mukul Somany Sanjay Somany
Chartered Accountants Jt. Managing Director Managing Director
H. K. Verma
Partner Priya Ranjan Ram Raj Soni
Kolkata Company Secretary Chief Financial Officer
June 25, 2008
Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956Balance Sheet Abstract and the Company’s General Business Profile
2 1 - 1 3 2 9 4
3 1 0 3
Registration No. State Code
Balance Sheet Date
I. Registration Details
II. Capital Raised during the year (amount in Rs ’000)
III. Position of Mobilisation and Deployment of Funds (amount in Rs ’000)
2 0 0 8
2 1
Total Assets
Private Placement
N I L
Sources of Funds
Application of Funds
Reserves and Surplus
IV. Performance of the Company (amount in Rs ’000)
Item Code No. (ITC code) Product descriptions
V. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)
Rights Issue
N I L
Bonus Issue
N I L
Public Issue
N I L
1 4 8 8 8 2 4 4
Total Liabilities
1 4 8 8 8 2 4 4
8 4 6 1 2 5 5
Unsecured Loans
1 3 1 2 7 6 1
Paid–up Capital
1 7 4 6 7 7
Secured Loans
2 8 7 4 2 9 6
Deferred Tax Liabilities
1 8 0 7 5 2
Net Fixed Assets
8 9 2 2 5 3 8Net Current Assets
2 9 3 5 3 5 3
Accumulated Loss
N I L
Net Income
1 0 2 8 1 8 7 9
Earnings per Share in Rs
9 1. 7 9
7 0 1 0 9 0 - 0 1
Total Expenditure
9 0 7 1 1 3 1
Dividend %
4 0 . 0 0
Profit / Loss Before Tax
1 2 1 0 7 4 8
Profit / Loss After Tax
1 6 0 3 3 8 9
G L A S S B O T T L E S
Investments
1 1 4 5 8 5 0Miscellaneous Expenditure
N I L
Item Code No. (ITC code) Product descriptions
7 0 1 3 0 0 - 0 0 G L A S S W A R E
L 2 6 1 0 9 W B 1 9 4 6 P L C 0 1 3 2 9 4CIN No.
84 | Hindusthan National Glass & Industries Limited
Statement Regarding Subsidiary Companies Pursuant to Section 212 ofCompanies Act, 1956
1. Name of the Subsidiary Company Glass Equipment (India) Ltd. Quality Minerals Ltd.
2. The Financial Year of the Subsidiary Company. Year ended on Year ended on
31st March, 2008 31st March, 2008
3. Holding Company’s interest Entire Subscribed Capital 9,384 Equity Shares of Rs 100/-
comprising of 26,400 each out of the Subscribed and
Equity Shares of paid up Capital of 9,410 Equity
Rs 100/- each. Shares of Rs 100/-each.
4 Extent of holding 100% 99.72%
5 Net Profit of the subsidiary Rs 12656304/- Rs 1052548/-
6 For the financial year of the Subsidiary
A] Profits/(Losses) so far as it concerns the Rs 12656304/- Rs 1049601/-
members of the holding company and
not dealt with in the holding company’s
accounts.
B] Profits/(Losses) so far as it concerns the Rs 2640000/- Nil
members of the holding company and
dealt with in the holding company’s accounts.
7 For previous financial years since it
becomes a subsidiary.
A] Profits/(Losses) so far as it concerns the Rs 124498262/- Rs 11314004/-
members of the holding company and not
dealt with in the holding company’s accounts.
B] Profits/(Losses) so far as it concerns the Rs 4974263/- Nil
members of the holding company and dealt
with in the holding company’s accounts.
Mukul Somany Sanjay Somany
Jt. Managing Director Managing Director
Kolkata Priya Ranjan Ram Raj Soni
June 25, 2008 Company Secretary Chief Financial Officer
Glass Equipment (India) Limited | 85
Directors’ ReportTo the Members
Your Directors have the pleasure to place before you the Thirty
Eighth Annual Report together with Audited Accounts of the
Company, for the year ended 31st March, 2008.
Financial Performance Rupees
2008 2007
Total Income 17,84,32,363 12,11,23,492
Profit before Interest,
Depreciation & Tax 3,48,79,803 2,05,12,271
Less : Interest 25,02,550 39,54,550
Gross Profit 3,23,77,253 1,65,57,721
Less : Depreciation 84,10,910 88,01,093
Taxation 93,20,000 56,07,000
Fringe Benefit Tax 1,29,000 1,24,000
Profit before Exceptional Items 1,45,17,343 20,25,628
Add : Exceptional Items (Net) (7,44,179) (1,11,437)
Profit after Exceptional Items 1,37,73,164 19,14,191
Add: Deferred Tax Assets
Created (Net) 19,71,808 26,99,446
Taxation adjustment of
previous years (Net) -- 243
Balance brought forward
from last year 68,32,525 62,49,532
2,25,77,497 1,08,63,412
Less: Provision for Proposed
Dividend 26,40,000 26,400
Tax on Proposed Dividend 4,48,668 4,487
Transfer to General Reserve 1,50,00,000 40,00,000
Balance Carried over 44,88,829 68,32,525
Working ReviewThe Net Sales of the Company was higher at Rs 1790.93 lac as
against Rs 1187.86 lac in the previous year. Your Directors are
optimistic about current year’s performance.
DividendYour Board of Directors recommend payment of Dividend @
Rs 100/- per share on 26,400 Equity Shares of Rs 100/- each for
the Financial Year 2007-2008.
DirectorsShri D.K. Kapoor and Shri A.C. Jain have resigned from the
Directorship of the Company with effect from 19/05/2008. The
Board places on its record appreciation for the valuable services
rendered by them during their association with the Company.
Shri Mukul Somany and Shri Sanjay Somany retire by rotation
and being eligible, offer themselves for re-appointment.
Compliance CertificateIn accordance with Section 383A of the Companies Act, 1956,
and Companies (Compliance Certificate) Rules, 2001, the
Company has obtained a certificate from a Secretary in whole
time practice confirming that the Company has complied with all
the provisions of the Companies Act, 1956 and a copy of such
certificate is annexed to this Report.
AuditorsThe Auditors Messers Krishan Somani & Associates, Chartered
Accountants, retire at the ensuing Annual General Meeting and
are eligible for re-appointment.
Auditors’ ReportThe Notes on Accounts, as referred to in the Auditors Report are
self explanatory and, therefore, do not call for any further
comments.
Particulars Of Employees:Statement of particulars of employees pursuant to section
217(2A) of the Companies Act, 1956, read with Companies
(Particulars of Employees) Rules, 1975 and forming part of
Directors’ Report for the year ended 31st March, 2008 is given in
the Annexure to the Report.
Industrial RelationsIndustrial relations within the Company remained cordial.
86 | Glass Equipment (India) Limited
Particulars required Under Section 217(1)(e) ofthe Companies Act, 1956
A. CONSERVATION OF ENERGY:
a) Energy conservation measures taken: -
The Company continues to give high priority to energy
conservation.
The following significant measures have been taken: -
i) Periodical and preventive maintenance of electrical
equipment to ensure optimum utilisation of electric
energy.
ii) Phased balancing of machines and lighting load.
iii) Maintaining the power factor by installing the required
capacitors.
b) Additional investments and proposals: -
Further energy conservation is planned through
replacement of inefficient equipment and by providing
automatic controls to reduce idle running of equipment.
c) Impact of measures at (a) and (b) for reduction of
energy consumption and consequent impact on cost
of production of goods: The energy conservation
measures have a nominal favourable impact on the cost
of the products.
d) Total energy consumption and energy consumption
per unit of production as per “Form-A”:
Not given, as the Company is not covered under the list
of specified industries.
B. TECHNICAL ABSORPTION:
a) Research and Development(R&D):
The Company is working on development of Import
substitution. The productivity norms and quality of
components are constantly being monitored for
improvement.
No separate account is maintained by the Company for
the expenditure incurred on R&D. However, the
Company is incurring expenditure towards development
activities.
b) Technology Absorption, Adaptation & Innovation:
The Company has not imported technology during the
last 5 years. The Company is constantly engaged in in-
house development activities.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on foreign exchange earnings and outgo is
contained in Schedule S(16) (D,E, F & G)
Directors’ Responsibility Statement Pursuant toSection 217 (2AA) of the Companies Act, 1956.Your Directors hereby confirm :-
• that the financial statements are prepared in conformity with
the accounting standards issued by the Institute of Chartered
Accountants of India and the requirements of the Companies
Act, 1956, to the extent applicable to the Company ; on the
historical cost convention ; as a going concern and on the
accrual basis. There are no material departure from
prescribed accounting standards in the adoption of the
accounting standards.
• that the directors had selected such accounting policies and
applied them consistently and made judgements and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit or loss of the
Company for that period ;
• that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance
with the provisions of this Act for safeguarding the assets of
the Company and for preventing and detecting fraud and
other irregularities ;
For and on behalf of the Board
-sd-
Bahadurgarh C. K. Somany
June 11, 2008. (Chairman)
Glass Equipment (India) Limited | 87
Directors’ ReportAnnexure to the
Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 and forming part of the Directors’ Report for the Company’s financial year ending 31st
March, 2008
a) Employees, who are employed throughout the financial year :-
Name Age in Qualifications Designation/ Commence- Experience Gross Name of
Years Nature of ment of (Years) Remuneration Previous
Duties Employment (Rupees) Employer,
Post held
Sri. C.K. Somany 75 Years I.S.C, FBIM Executive 01/10/2000 55 Years 32,42,635 HNG &(London) Chairman Industries
Limited,Kolkata,
ManagingDirector
Notes:-1) Remuneration as shown above includes Salary, HRA, Company’s contribution to Provident Fund, Provision for Gratuity, LTA and
Medical Expenses reimbursement.2) The above employee is relative of Shri Sanjay Somany, Shri Mukul Somany and Smt. Jaya Kanoria.3) The appointment is on contractual basis.
88 | Glass Equipment (India) Limited
Compliance CertificateRegistration No. of the Company : 21-65595
Nominal Capital . Rs 4000000/-
To,
The Members,
Glass Equipment (India) Limited,
2, Red Cross Place,
Kolkata - 700001
I have examined the registers, records, books and papers of
Glass Equipment (India) Limited (the Company) as required to
be maintained under the Companies Act, 1956 (the Act) and the
rules made thereunder and also the provisions contained in the
Memorandum and Articles of Association of the Company for the
financial year ended on 31st March, 2008 (financial year). In my
opinion and to the best of my information and according to the
examinations carried out by me and explanations furnished to
me by the Company, its officers and agents, I certify that in
respect of the aforesaid financial year.
1. The Company has kept and maintained all registers as stated
in Annexure `A' to this certificate, as per the provisions of the
Act and the rules made thereunder and all the entries therein
have been duly recorded.
2. The Company has duly filed the forms and returns as stated
in Annexure `B' to this certificate, with the Registrar of
Companies, Regional Director, Central Government,
Company Law Board or other authorities within the time
prescribed under the Act and the rules made thereunder
except as otherwise stated.
3. The Company being a public limited company, comments
are not required.
4. The Board of Directors duly met FIVE times respectively on
30.06.2007, 27.07.2007, 06.09.2007, 21.11.2007 and
06.02.2008 in respect of which meetings proper notices were
given and the proceedings were properly recorded and
signed in the Minutes Book maintained for the purpose.
5. The Company has not closed its Register of Members during
the financial year.
6. The Annual General Meeting for the financial year ended on
31st March, 2007 was held on 28th September, 2007, after
giving due notice to the members of the Company and the
resolutions passed there at were duly recorded in Minutes
Book maintained for the purpose.
7. No Extra-ordinary General Meeting was held during the
financial year.
8. The Company has not advanced any loans to its directors or
persons or firms or Companies referred to under Section 295
of the Act.
9. The Company has duly complied with the provisions of
section 297 of the Act in respect of contracts specified in that
section.
10. The Company has made necessary entries in the register
maintained under section 301 of the Act.
11. As there were no instances falling within the purview of
section 314 of the Act, the Company has not obtained any
approvals from the Board of Directors Members or Central
Government.
12. The Company has not issued any duplicate share Certificate
during the financial year.
13. i. There was no allotment/transfer/transmission of securities
during the financial year.
ii. The Company has not deposited the amount of dividend
declared in a separate Bank Account as the Company
has issued a Cheque to the holding Company for
dividend on 1st October, 2007 which is within five days
from the date of declaration of such dividend.
iii. The Company has paid dividend to the holding Company
within a period of 30 (Thirty) days from the date of
declaration and therefore it has not transferred any
amount to Unpaid Dividend Account.
iv. There is no amount lying in unpaid dividend account,
application money due for refund and there are no
deposits, debentures etc. as on 31st March, 2008.
v. The Company has duly complied with the requirements
of section 217 of the Act.
Glass Equipment (India) Limited | 89
14. The Board of Directors is duly constituted. There was no
appointment of directors, additional directors, alternate
directors and directors to fill casual vacancy made during the
year.
15. The Company has not appointed any Managing Directors /
Whole-time Directors / Manager during the financial year.
16. The Company has not appointed any sole selling agents
during the financial year.
17. The Company was not required to obtain any approvals of
the Central Government, Company Law Board, Regional
Director, Registrar and/ or such authorities prescribed under
the various provisions of the Act during the Financial year.
18. The Directors have disclosed their interest in the other
firms/companies to the Board of Directors pursuant to the
provisions of the Act and the rules made there under.
19. The Company has not issued any shares, debentures or
other securities during the year.
20. The Company has not bought back any shares during the
financial year.
21. The Company has not issued any Preference Shares or
Debentures.
22. There were no transactions necessitating the Company to
keep in abeyance any rights to dividend, rights shares and
bonus shares pending registration of transfer of shares.
23. The Company has not invited/accepted any deposits during
the financial year except some temporary amount borrowed
during the year which has been repaid within the year.
24. The amount borrowed by the Company from directors,
members, public, financial institutions, Banks or other during
the financial year ended 31st March, 2008 are within the limits
prescribed under Section 293(1)(d) of the Act have been
passed in duly convened Annual General Meeting held on
23rd September, 1996.
25. The Company has made loans and investments and given
guarantees to other bodies corporate in compliance with the
provisions of the Act and has made necessary entries in the
register kept for the purpose.
26. The Company has not altered the provisions of the
Memorandum with respect of situation of the Company's
registered office from one state to another during the year
under scrutiny.
27. The Company has not altered the provisions of the
Memorandum with respect to the objects of the Company
during the financial year under scrutiny.
28. The Company has not altered the provisions of the
Memorandum with respect to name of the Company during
the year under scrutiny.
29. The Company has not altered the provisions of the
Memorandum with respect to share capital during the year
under scrutiny.
30. The Company has not altered its Articles of Association
during the financial year.
31. I have been informed by the management that there was no
prosecution initiated against or show cause notice received
by the Company and no fines or penalties or any other
punishment was imposed on the Company during the
financial year, for the offences under the Act.
32. The Company has not received any money as security from
its employees during the financial year.
33. The Company has generally deposited both employees' and
employer's contribution to Provident Fund generally in time
with prescribed authorities pursuant to Section 418 of the Act.
Signature
Babu Lal Patni
Place: Kolkata Practicing Company Secretary
Dated : June 11, 2008 C.P.No : 1321
90 | Glass Equipment (India) Limited
ANNEXURE `A'
ANNEXURE `B'
LIST OF REGISTERS MAINTAINED BY THE COMPANY
Forms and Returns as filed by the Company with Registrar of Companies Regional Director, Central Government
or other authorities during the financial year ended 31st March, 2008.
S.N. Form No./Return Filed Under For Date of Whether If delay in
Section filing filed within filing whether
prescribed requisite
Time additional fee paid
YES/NO YES/NO
01. Form No 23AC 220 Balance Sheet as at 09.10.07 YES N.A.
31.03.2007
02. Form No 66 Proviso to Section Compliance Certificate 09.10.07 YES N.A.
383A (1)
03. Form No 20B 159 Annual Return made upto 19.11.07 YES N.A.
28.09.07
S.N Particulars Under Section
01. Register of Charges 143
02. Register of Members 150
03. Index of Members 151
04. Directors' Minute Book 193
05. Shareholders' Minute Book 193
06. Register of Contracts (Part I) 301
07. Register of Contracts (Part II) 301
08. Register of Directors 303
09. Register of Directors Shareholdings 307
10. Register of Investments 372A
11. Register of Allotment.
12. Register of Transfer.
Glass Equipment (India) Limited | 91
Auditors’ Report To the Members of
Glass Equipment (India) Limited
1. We have audited the attached Balance Sheet of GLASS
EQUIPMENT (INDIA) LIMITED, as at 31st March, 2008, the
Profit and Loss Account and also the Cash Flow Statement
of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of
the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003
as amended to-date, issued by the Central Government in
terms of Section 227 (4A) of the Companies Act, 1956, we
enclose in the Annexure a statement on the matters specified
in paragraph 4 & 5 of the said Order.
4. Further to our comments in the Annexure referred to above,
we report that:
a) We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purpose of our audit.
b) In our opinion, proper books of accounts as required by
law, have been kept by the Company so far as appears
from our examination of such books.
c) The Balance Sheet and Profit & Loss Account dealt with
by this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet and the Profit and Loss
Account dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956 to the extent
applicable.
e) On the basis of the written representations received from
the Directors of the Company as at 31st March, 2008,
and taken on record by the Board of Directors, we report
that none of Directors is disqualified from being
appointed as a Director of the Company under clause (g)
of sub-section (1) of section 274 of the Companies Act,
1956.
f) In our opinion, and to the best of our information and
according to the explanations given to us, the said
accounts subject to note no 8 regarding change in
method of providing liability of leave salary and note no
9 regarding revaluation of plant and machinery and read
together with other notes thereon, give the information
required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with
the accounting principles generally accepted in India :-
i) In the case of the Balance Sheet, of the state of affairs
of the Company as at 31st March, 2008 and
ii) In the case of the Profit & Loss Account, of the
PROFIT of the Company for the year ended on that
date.
iii) In the case of the Cash Flow Statement, of the Cash
Flows for the Year ended on that date.
For Krishan Somani & Associates
Chartered Accountants,
-Sd-
(Krishan Somani)
Place : Delhi, Proprietor
Date : June 11, 2008 Membership No : 089879
92 | Glass Equipment (India) Limited
Annexure to the Auditors’ Report(Referred to in paragraph (3) of our report of even date on the statement of accounts of Messrs. GLASS EQUIPMENT(INDIA) LIMITED for the year ended 31st March, 2008.)
1. a) The Company has maintained proper records showing
full particulars, including quantitative details and
situation of fixed assets.
b) The fixed assets have been physically verified by the
management during the year. In our opinion, the
frequency of verification is reasonable having regard to
the size of the Company and the nature of its assets.
The discrepancies reported on such verification were
not material and have been properly dealt with in the
books of account.
c) In our opinion, the disposals of fixed assets during the
year does not affect the going concern assumption.
2. a) The management has conducted the physical
verification of inventory at reasonable intervals, except
for inventories lying with outside parties, which have,
however, been confirmed by them.
b) In our opinion, the procedure followed by the
management for such physical verification are
reasonable and adequate in relation to the size of the
Company and nature of its business.
c) The Company is maintaining proper records of
inventory. The discrepancies noticed on verification
between physical inventories and the book records
were not material in relation to the operation of the
Company and the same have been properly dealt with
in the books of account.
3. a) The Company has granted an unsecured loan to One
Body corporate covered in the register maintained
under Section 301 of the Companies Act, 1956. The
maximum balance outstanding during the year was
Rs 516.51 lacs and the amount was repayable on
demand.
b) In our opinion, the rate of interest and other terms and
conditions of the loan given by the Company, are prima
facie not prejudicial to the interest of the Company.
c) The payment of principal amount and interest was
regular.
d) There are no overdue amounts of more than rupees one
lakh.
e) The Company had taken an unsecured loan from a
Company listed in the register maintained under
Section 301 of the Companies Act, 1956. The maximum
balance outstanding during the year was Rs 70.29 lacs
and the amount was repayable on demand.
f) In our opinion, the rate of interest and other terms and
conditions of the loan taken by the Company, are prima
facie not prejudicial to the interest of the Company.
g) The repayment of principal amount and interest was
regular.
4. In our opinion and according to the information and
explanations given to us, there are adequate internal control
procedures commensurate with the size of the Company
and the nature of its business for the purchase of inventory
and fixed assets and for the sale of goods and services.
During the course of our audit no major weakness has been
observed in the internal controls.
5. a) Based on the audit procedures applied by us and
according to the information, explanations and
representations given to us, we are of the opinion that
all transactions that need to be entered into the register
in pursuance of Section 301 of the Companies Act,
have been so entered.
b) Based on the information and explanations given to us,
it is our opinion that the transactions exceeding the
value of Rs Five Lakhs in respect of any party during
the year have been made at a prices which are prima
facie, reasonable, having regard to the prevailing
market prices at the relevant time where such prices are
available.
6. In our opinion and according to the information and
explanations given to us, the Company has not accepted
any deposits from the public within the meaning of Section
58A and 58AA of the Companies Act, 1956 and the rules
framed there under.
Glass Equipment (India) Limited | 93
7. The Company has an internal audit system, which in our
opinion, is commensurate with the size and nature of its
business.
8. As informed to us, the maintenance of cost records has not
been prescribed by the Central Government u/s 209(1)(d)
of the Companies Act, 1956, in respect of the activities
carried on by the Company.
9. a) Based on the audit procedures applied by us and
according to the information and explanations provided
by the management, the Company is generally regular
in depositing the statutory dues including Provident
Fund, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty,
Cess and other statutory dues with the appropriate
authorities.
b) According to the information and explanations given to
us, there are no undisputed amounts payable in respect
of Income Tax, Sales Tax, Wealth Tax, Custom Duty,
Service Tax, Excise Duty and Cess outstanding as at
the year end, for a period of more than six months from
the date they become payable.
c) According to the information and explanations given to
us, there are no dues of Sales Tax, Income Tax,
Custom Duty, Wealth Tax, Service Tax, Excise Duty or
Cess outstanding on account of any dispute.
10. The Company has no accumulated losses at the end of
financial year and it has not incurred any cash losses in the
current and immediately preceding financial year.
11. According to the information and explanations given to us
and the records examined by us, the Company has not
defaulted in repayment of dues to a financial institution or
bank or debenture holders.
12. The Company has not granted any loan and advances on
the basis of security by way of pledge of shares, debentures
& other Securities.
13. In our opinion and according to the information and
explanations given to us, the nature of the activities of the
Company does not attract any special statute applicable to
chit fund and nidhi /mutual benefit fund / societies.
14. In our opinion, the Company has maintained proper records
of the transactions and contracts of the investments dealt in
by the Company and timely entries have been made
therein. The investments made by the Company are held in
its own name except to the extent of the exemption under
Section 49 of the Act.
15. According to the information and explanations given to us
and in our opinion, the terms and conditions of the
guarantees given by the Company for loans taken by others
from banks or financial institutions are prima facie not
prejudicial to the interest of the Company
16. The Company has not obtained any term loans during the
year.
17. On the basis of an overall examination of the balance sheet
and the information and explanations given to us, we report
that the Company has not utilised any funds raised on short
term basis for long term investments and vice-versa.
18. The Company has not made any preferential allotment of
shares to parties or companies covered under Section 301
of the Companies Act, during the year.
19. The Company has not issued any debentures.
20. The Company has not raised any money through a public
issue during the year
21. Based upon the audit procedures performed and the
information and explanations given by the management, we
report that no fraud on or by the Company has been noticed
or reported during the year nor have we been informed of
such case by the management that causes the financial
statement to be materially misstated.
For Krishan Somani & Associates
Chartered Accountants,
-Sd-
(Krishan Somani)
Place : Delhi, Proprietor
Date : June 11, 2008 Membership No : 089879
94 | Glass Equipment (India) Limited
As per our report attached
For Krishan Somani & Associates
Chartered Accountants
-sd- -sd- -sd-
Krishan Somani Sanjay Somany C.K.Somany
Proprietor Director Chairman
417, Laxmi Tower, Commercial Complex,
Azadpur, Delhi – 110033
June 1, 2008
Balance Sheet As at 31st March, 2008Amount in Rupees
SCHEDULES As at 31.03.2008 As at 31.03.2007
SOURCES OF FUNDS
Shareholders' Funds
Share Capital A 26,40,000 26.40,000
Reserves & Surplus B 19,21,24,582 12,94,72,525
19,47,64,582 13,21,12,525
Loan Funds
Secured Loans C 2,14,74,337 2,95,29,207
Un-secured Loans D 65,00,000 70,29,347
2,79,74,337 3,65,58,554
Deferred Tax Liability (Net) 37,19,789 56,91,597
Refer Note – 12 of Schedule ‘S’
Total 22,64,58,708 17,43,62,676
APPLICATION OF FUNDS
Fixed Assets
Gross Block E 20,41,35,292 15,33,02,720
Less : Depreciation 11,65,79,286 11,04,87,907
Net Block 8,75,56,006 4,28,14,813
Investments F – –
Current Assets, Loans & Advances
Inventories G 9,93,48,598 8,65,85,411
Sundry Debtors H 6,65,22,013 81,10,910
Cash & Bank Balances I 10,50,047 1,64,891
Loans & Advances J 44,43,990 6,12,00,770
17,13,64,648 15,60,61,982
Less: Current Liabilities & Provisions
Liabilities K 2,00,19,892 1,66,34,281
Provisions L 1,24,42,054 78,79,838
3,24,61,946 2,45,14,119
Net Current Assets 13,89,02,702 13,15,47,863
Total 22,64,58,708 17,43,62,676
Notes S
Glass Equipment (India) Limited | 95
As per our report attached
For Krishan Somani & Associates
Chartered Accountants
-sd- -sd- -sd-
Krishan Somani Sanjay Somany C.K.Somany
Proprietor Director Chairman
417, Laxmi Tower, Commercial Complex,
Azadpur, Delhi – 110033
June 11, 2008
Profit and Loss Account For the year ended 31st March, 2008
SCHEDULES 2007-2008 2006-2007
INCOME
Sales & Services (Gross) M 20,41,14,416 13,64,10,623
Less: Excise Duty recovered on Sales 2,50,21,303 1,76,24,276
Sales & Services (Net) 17,90,93,113 11,87,86,347
Interest N 10,68,639 58,09,077
Other Income O 18,41,888 8,32,298
Increase / (Decrease) in stocks R (35,71,277) (43,04,230)
17,84,32,363 12,11,23,492
EXPENDITURE
Manufacturing, Administrative and Other Expenses P 14,35,52,560 10,06,11,221
Interest N 25,02,550 39,54,550
Depreciation E 84,10,910 88,01,093
15,44,66,020 11,33,66,864
Profit before Tax and Exceptional items 2,39,66,343 77,56,628
Less / Add: Exceptional items
- Prior Period adjustments (Net) 3,02,538 –
- Fixed Assets written off/ loss on sale of assets (10,46,717) (1,11,437)
Profit before Tax 2,32,22,164 76,45,191
Less: Provision for Taxation 93,20,000 56,07,000
Less: Provision for Fringe Benefit Tax 1,29,000 1,24,000
Profit after Tax 1,37,73,164 19,14,191
Less / Add: Deferred Tax Assets / Liabilities Created (Net) 19,71,808 26,99,446
Less / Add: Taxation adjustments of previous years (Net) – 243
1,57,44,972 46,13,880
Add: Balance brought forward from last year 68,32,525 62,49,532
Balance Available for Appropriation 2,25,77,497 1,08,63,412
Less: Provision for Proposed Dividend 26,40,000 26,400
Less: Tax Payable on Proposed Dividend 4,48,668 4,487
Less: Transfer to General Reserve 1,50,00,000 40,00,000
Balance Carried to Balance Sheet 44,88,829 68,32,525
Basic / Diluted earning per share
(Refer Note – 11 of Schedule ‘S’) 596 175
Notes S
Amount in Rupees
96 | Glass Equipment (India) Limited
Cash Flow Statement For the year ended 31st March, 2008Amount in Rupees
2007-2008 2006-2007
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax 2,32,22,164 76,45,191
Adjustments for:
Depreciation 84,10,910 88,01,093
Interest (Net) 14,33,911 (18,54,527)
Fixed Assets written back / loss on sale of Fixed Assets 10,46,717 1,11,437
Profit on Sale of Fixed Assets / Investment (36,442) --
Operating Profit before working capital changes 3,40,77,260 1,47,03,194
Adjustments for:
Loans and Advances 5,67,56,780 (5,16,53,417)
Trade receivables (5,84,11,103) 4,21,63,171
Inventories (1,27,63,187) (71,55,611)
Trade and other payables 79,47,827 81,71,208
Cash generated from operations 2,76,07,577 62,28,545
Direct Taxes paid (94,49,000) (57,30,757)
Net Cash from Operating activities 1,81,58,577 4,97,788
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (50,36,625) (65,39,695)
Sale of Fixed Assets 8,70,000 63,000
Interest received 10,68,639 58,09,077
Net Cash used in Investing Activities (30,97,986) (6,67,618)
C. CASH FLOW FROM FINANCING ACTIVITIES
(Repayment) / Proceeds from Long term borrowings (Net) (85,84,217) 20,50,279
Dividend Paid (26,40,000) (26,400)
Corporate Dividend Tax (4,48,668) (4,487)
Interest paid (25,02,550) (39,54,550)
Net Cash from Financing Activities (1,41,75,435) (19,35,158)
NET CHANGES IN CASH AND CASH EQUIVALENTS 8,85,156 (21,04,988)
CASH AND CASH EQUIVALENTS – OPENING BALANCE 1,64,891 22,69,879
CASH AND CASH EQUIVALENTS – CLOSING BALANCE 10,50,047 1,64,891
(represents Cash in hand and Bank balances)
As per our report attached
For Krishan Somani & Associates
Chartered Accountants
-sd- -sd- -sd-
Krishan Somani Sanjay Somany C.K.Somany
Proprietor Director Chairman
417, Laxmi Tower, Commercial Complex,
Azadpur, Delhi – 110033
June 11, 2008
Glass Equipment (India) Limited | 97
Schedules forming part of the Accounts
Schedule - A I SHARE CAPITAL
As at 31.03.2008 As at 31.03.2007
Authorised
40,000 Equity Shares of Rs 100 each 40,00,000 40,00,000
Issued, Subscribed & Paid Up
26,400 Equity Shares of Rs 100 each fully paid up & held by the holding company,
Hindusthan National Glass & Industries Limited and its nominees.
(Of the above, 1500 Equity Shares of Rs 100 each have
been issued for consideration other than cash). 26,40,000 26,40,000
Amount in Rupees
Schedule - B I RESERVES AND SURPLUS
Share Premium Account 26,40,000 26,40,000
General Reserve
As per last Balance Sheet 12,00,00,000
Add : Transferred from Profit & Loss Account 1,50,00,000 13,50,00,000 12,00,00,000
Revaluation Reserve 4,99,95,753 -
Profit & Loss Account
As per Annexed Account 44,88,829 68,32,525
19,21,24,582 12,94,72,525
Schedule - C I SECURED LOANS
From Banks:
a) Cash Credits : Secured by hypothecation of stock of finished goods,
semi-finished goods, raw materials, stores and spares including packing
material, book debts, other current assets, entire plant & machinery and
other fixed assets and guaranteed by the holding company. 2,14,74,337 2,93,28,956
b) Car Loan : Secured by way of first charge on the Vehicle (s) financed
(Installment due within one year Rs Nil, Previous year Rs 2,00,251) - 2,00,251
2,14,74,337 2,95,29,207
Schedule - D I UNSECURED LOANS
From a Corporate Associate 65,00,000 70,29,347
65,00,000 70,29,347
98 | Glass Equipment (India) Limited
Schedules forming part of the Accounts
Schedule - F I INVESTMENTS (at cost)
As at 31.03.2008 As at 31.03.2007
(Unquoted – in fully paid shares) – Other than Trade
• 47,100 equity shares of Rs 10 each in Hasow Automation Ltd. 4,73,355
Less :- Provision for diminution in value of investment 4,73,355 - -
- -
Amount in Rupees
Schedule - E I FIXED ASSETSSchedule - E I FIXED ASSETSGROSS BLOCK DEPRECIATION NET BLOCK
Particulars As at Addition Reval. Adj. Sales or As at Up to For the Written Upto As at As at
01/04/07 During the As on Adjustment 31/03/08 31/03/07 Year Back 31/03/08 31/03/08 31/03/07
Year 31/03/08
Building 4,52,350 -- -- 4,52,350 -- 1,10,601 5,535 1,16,136 -- -- 3,41,749
Plant & Machinery 14,33,64,850 19,16,858 4,99,95,753 -- 19,52,77,461 10,67,07,598 72,06,600 -- 11,39,14,198 8,13,63,263 3,66,57,252
Computer Software 55,24,427 15,38,967 -- 29,84,529 40,78,865 22,39,979 9,14,400 19,37,812 12,16,567 28,62,298 32,84,448
Technical Know How 1,40,000 -- -- -- 1,40,000 1,33,000 -- -- 1,33,000 7,000 7,000
Office & Other Equip. 4,67,881 25,900 -- -- 4,93,781 2,21,511 15,812 -- 2,37,323 2,56,458 2,46,370
Furniture & Fittings 11,19,675 5,859 -- -- 11,25,534 3,62,438 56,699 -- 4,19,137 7,06,397 7,57,237
Vehicles 22,33,537 5,09,041 -- 7,62,927 19,79,651 7,12,780 2,11,864 2,65,583 6,59,061 13,20,590 15,20,757
Total 15,33,02,720 39,96,625 4,99,95,753 41,99,806 20,30,95,292 11,04,87,907 84,10,910 23,19,531 11,65,79,286 8,65,16,006 4,28,14,813
Capital Work in Progress -- 10,40,000 -- -- 10,40,000 -- -- -- -- 10,40,000 --
Total 15,33,02,720 50,36,625 4,99,95,753 41,99,806 20,41,35,292 11,04,87,907 84,10,910 23,19,531 11,65,79,286 8,75,56,006 4,28,14,813
Previous Year 14,72,65,764 65,39,695 -- 5,02,739 15,33,02,720 10,20,15,116 88,01,093 3,28,302 11,04,87,907 4,28,14,813
Amount in Rupees
Schedule - G I INVENTORIES
(As taken, valued & certified by the Management)
Finished Goods 1,43,17,069 1,64,02,021
Work-in-Process 1,36,61,072 1,51,47,397
Raw Materials & Components (including in transit Rs Nil, Previous year Rs 1,074.) 6,83,96,161 5,23,06,836
Stores & Spares 29,74,296 27,29,157
9,93,48,598 8,65,85,411
Schedule - H I SUNDRY DEBTORS
(Unsecured, considered good)
Debts outstanding for a period exceeding six months 64,611 64,611
Other debts 6,64,57,402 80,46,299
6,65,22,013 81,10,910
Glass Equipment (India) Limited | 99
Schedules forming part of the Accounts
Schedule - I I CASH & BANK BALANCES
As at 31.03.2008 As at 31.03.2007
Cash in Hand 59,095 98,599
Balance in Post Office Saving Bank Account 1,000 1,000
(Pass Book pledged with Central Excise Department)
Balance with Scheduled Banks :
• In Current Account (Including Cheques in Hand Rs Nil, Previous year Rs Nil) 9,29,952 65,292
• In Short Term Deposits 60,000 -
10,50,047 1,64,891
Amount in Rupees
Schedule - J I LOANS & ADVANCES
(Unsecured, considered good, unless otherwise specified)
LOANS
ICD given -- 5,16,50,920
ADVANCES
Advances recoverable in cash or in kind or for value to be received 23,30,935 34,36,843
Balance in Current Account with Central Excise (Net) 5,02,419 6,02,501
Advance Payment of Income Tax
(Net of provision Rs 3,15,71,000, Previous year Rs 2,22,51,000) 8,15,305 47,13,325
Advance Payment of Fringe Benefit Tax
(Net of Provision Rs 3,85,730, Previous year Rs 2,56,730) 22,541 24,391
Deposits with Government Departments 7,66,790 7,66,790
Other Deposits 6,000 6,000
44,43,990 6,12,00,770
Schedule - K I CURRENT LIABILITIES
Sundry Creditors 1,41,00,095 1,12,78,673
Other Liabilities 57,87,680 51,02,532
Temporary Bank Overdraft 1,32,117 2,53,076
2,00,19,892 1,66,34,281
Opening Addition Deletion 31.03.2008 31.03.2007
Bonus 22,34,733 26,12,844 22,34,733 26,12,844 22,34,733
Gratuity 48,29,711 15,78,503 2,14,154 61,94,060 48,29,711
Leave 7,84,507 64,513 3,02,538 5,46,482 7,84,507
Proposed Dividend 26,400 26,40,000 26,400 26,40,000 26,400
Tax on Proposed Dividend 4,487 4,48,668 4,487 4,48,668 4,487
1,24,42,054 78,79,838
Schedule - L I PROVISIONS
100 | Glass Equipment (India) Limited
Schedules forming part of the Accounts
Schedule - M I SALES & SERVICES
2007-2008 2006-2007
Sales of I.S. Machines & Spare Parts (Gross)• Domestic 19,75,92,252 13,23,65,355• Export 22,44,319 22,02,808Service Revenue (Tax deducted at source Rs 1,08,632, previous year Rs 46,306) 42,77,845 18,42,460
20,41,14,416 13,64,10,623
Amount in Rupees
Schedule - N I INTERESTReceived (Gross)
On Bank Deposits (Tax deducted at source Rs 1,795) 19,181 4,697From Others (Tax deducted at source Rs 2,26,200, pervious year Rs 12,87,760.) 10,49,458 58,04,380
10,68,639 58,09,077Paid
To Bankers & Others 25,02,550 39,54,55025,02,550 39,54,550
Schedule - O I OTHER INCOMEProfit on sale of fixed assets 36,442 –Liabilities no longer required, written back 1,46,478 70,349Miscellaneous Receipts 16,58,968 7,61,949
18,41,888 8,32,298
Schedule - P I MANUFACTURING, ADMINISTRATIVE & OTHER EXPENSES
Purchases of Products for resale 1,79,42,810 92,57,032Raw Materials & Components consumed – Schedule ‘Q’ 6,72,36,653 4,84,60,777Stores & Spares consumed 1,40,63,376 95,41,625Power Charges 12,64,333 12,14,660Salaries, Wages, Gratuity & Bonus 2,42,24,539 2,07,85,351Contribution to Employees Provident Fund, Family Pension & Other Funds 18,24,991 15,04,921Workmen & Staff Welfare Expenses 18,77,255 14,53,521Excise Duty Provided on Stocks (80,361) 7,74,805Rates & Taxes 1,01,973 76,909Insurance 2,77,410 5,35,818Hire Charges 16,00,000 16,00,000Miscellaneous Expenses 92,97,339 28,76,102Repairs :Plant & Machinery 5,15,306 5,21,790Others 1,19,821 1,98,970Payment to Auditors :Audit Fee 31,000 31,000Tax Audit Fee 10,000 10,000Other Services – 10,900Reimbursement of Expenses 2,280 12,840
Directors’ Remuneration 32,43,835 17,44,20014,35,52,560 10,06,11,221
Glass Equipment (India) Limited | 101
Schedules forming part of the Accounts
Schedule - Q I RAW MATERIALS & COMPONENTS CONSUMED
Schedule - S I NOTES
2007-2008 2006-2007
Opening Stock 5,23,06,836 4,10,20,969Add : Purchases 7,00,77,487 5,09,50,946
Processing Charges 1,32,48,491 87,95,69813,56,32,814 10,07,67,613
Less : Closing Stock 6,83,96,161 5,23,06,8366,72,36,653 4,84,60,777
Amount in Rupees
Schedule - R I DECREASE / INCREASE IN STOCKOpening Stocks :Finished Goods 1,64,02,021 1,32,56,532Work-in-Process 1,51,47,397 2,25,97,116
3,15,49,418 3,58,53,648Less : Closing Stocks :Finished Goods 1,43,17,069 1,64,02,021Work-in-Process 1,36,61,072 1,51,47,397
2,79,78,141 3,15,49,418Decrease / Increase in Stocks (+)35,71,277 (+) 43,04,230
1. Statement on Accounting Polices
I) Accounting Convention
The Company prepares its accounts under the historical cost convention, except for certain fixed assets which are revalued on
accrual basis, except otherwise stated in accordance with normally accepted accounting principles and applicable Accounting
Standards in India.
II) Fixed Assets
Fixed Assets are shown at cost of acquisition (net of MODVAT credit w.e.f. 01/04/96) or cost of construction or at revalued amount
where such assets have been revalued less depreciation.
All expenses including interest on funds borrowed specifically for the acquisition, construction and Commissioning of new assets
/ projects are capitalised up to the date of putting the assets to use.
Expenditure related to and incurred during implementation of new / expansion or modernisation project is included under capital
work in process.
VIII) Impairment
Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,
recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assets
either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater
of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets
are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the
recoverable amount and such loss either no longer exists or has decreased. Impairment loss / reversal thereof is adjusted to the
carrying value or the respective assets, which in case of CGU, are allocated to its assets on a prorate basis.
102 | Glass Equipment (India) Limited
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
IV) Depreciation
Tangible Assets
i) Depreciation on tangible assets is provided on Straight Line Method (SLM) at the rates and in the manner prescribed in Schedule
XIV to the Companies Act, 1956.
ii) Depreciation on increase in value of fixed assets due to revaluation is provided on the basis of remaining useful life on Straight
Line Method (SLM) and is transferred from Revaluation Reserve to Profit and Loss Account.
Intangible Assets
i) Intangible Assets :- 95% value of the Computer Software and Technical Know How is amortised. Computer Software is amortised
by 16.21% per year.
V) Investments
Long Term Investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary in the
value.
VI) Inventories
Finished Goods and Work-in-process are valued at lower of cost or net realisable value. Cost for own Manufactured goods
comprise of materials, labour and other appropriate overheads and is calculated on the basis which is appropriate to the business
carried on by the Company.
Raw materials, components, stores and spares are valued at lower of cost or net realisable value. Cost of inventory is arrived at
on Weighted Average Method.
Scrap and unserviceable and obsolete stocks are valued at estimated realisable value.
Excise duty is considered as an element of cost.
VII) Foreign Currency Transactions
Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign
currency monetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon
and also on the exchange differences on settlement of the foreign currency transaction during the year are recognised as income
or expenses and are adjusted to the profit and loss account or capitalised as the case may be.
VIII) Revenue Recognition
a) Revenue from sale of goods and services is recognised upon passage of title and rendering of services to the customers
which generally coincides with delivery.
b) Insurance and other claims to the extent considered recoverable are accounted for in the year of claim. However, claims and
refunds whose recovery can not be ascertained with reasonable certainty are accounted for on acceptance / actual receipt
basis.
c) Sales are inclusive of Excise Duty less Return / Shortage / Rebates, if any and net of Sales Tax.
IX) Employee Benefits (see note – 8)
Liabilities in respect of employee benefits are provided for as follows :-
A) Deferred Benefit Plans
Leave salary of employees on the basis of actuarial valuation by adopting Unit Credit Method as at the year end. Gratuity
Liability is provided for as per actuarial valuation by adopting Projected Unit Credit Method at the year end. This scheme is
maintained and administered by an Insurer to which the trustees make periodic contributions.
B) Deferred Contribution Plans
Provident Fund and ESI on the basis of actual liability accrued and paid to trust/authority.
C) Actuarial gain / losses, if any, are immediately recognised in the profit and loss account.
Glass Equipment (India) Limited | 103
X) Borrowing Costs
Borrowing cost that are attributable to the acquisition / construction of fixed assets are capitalised as part of the cost of respective
assets. Other borrowing costs are recognised as an expense in the year in which they are incurred.
XI) Earning per Share (EPS)
The earnings considered in ascertaining the Company’s EPS comprises the net profit after tax (and includes the post tax effect
of any extra ordinary items). The number of shares used in computing basic EPS is weighted average number of shares
outstanding during the year.
XII) Taxation
Tax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the year.
A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A
provision is made for deferred tax for all timing differences arising between taxable income and accounting income at currently
enacted tax rates.
Deferred tax assets are recognised only if there is virtual certainty that they will be realised and are reviewed for the
appropriateness of their respective carrying values at each balance sheet date.
XIII) Provision, Contingent Liabilities and Contingent Assets
i) The preparation of financial Statements require management to make estimates and assumption that affect the reported
amount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and
the reported amounts of income and expenses during the year. Difference between the actual results and the estimates are
recognised in the year in which the results are known / materialised.
ii) Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as
a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised
nor disclosed in the financial statements.
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
2. Contingent Liabilities not provided for in respect of :
2007-2008 2006-2007
a) Income Tax demand against which company has preferred an appeal 5,87,260 7,22,722b) Surety given to sales tax department on behalf of :
– Hasow Automation Limited. 75,000 75,000– Holding Company, Hindusthan National Glass & Inds. Ltd. 50,00,000 50,00,000
c) Bonds executed in favour of Central Excise Department 1,000 1,000d) Pending Capital Orders 9,49,296 5,60,398
– Advance Given 6,05,354 –e) Corporate Guarantee given on behalf of Somany Foam Limited 32,35,00,000 32,35,00,000
Amount in Rupees
4. Sundry Debtors include :
- Due from holding company, Hindusthan National Glass & Industries Limited. 6,58,57,690 52,17,991(Maximum balance: Rs 8,07,72,459)
3. a) Income Tax assessment have been completed up to financial year 2004-2005.Appeals have been preferred against various assessment order and anyliability / refund shall be provided in the year of final determination.
b) Haryana Sales Tax assessment have been completed up to financial year2004-2005.
104 | Glass Equipment (India) Limited
6. Miscellaneous Expenses include :
a) Directors’ Travelling Expenses 1,54,089 1,59,319
b) Professional Fees 63,36,988 4,16,090
7. a) Directors’ Remuneration include :
i ) Salary 17,25,000 15,00,000
ii) HRA 10,35,000 –
iii) Contribution to Provident Fund & other Funds 2,07,000 1,80,000
iv) Provision for Gratuity 1,28,125 62,500
v) Medical Expenses Reimbursement 1,35,629 –
vi) LTA 11,881 –
vii) Directors’ Fee 1,200 1,700
32,43,835 17,44,200
7. b) Computation of Net Profit under Section 198 read with Section 349of the Companies Act, 1956 and commission payable to Directors :
Net Profit as per Profit & Loss Account 2,32,22,164 76,45,191
Add: Depreciation 84,10,910 88,01,093
Directors’ Remuneration 32,43,835 17,44,200
3,48,76,909 1,81,90,484
Less: Depreciation under Section 350 of the Companies Act, 1956 84,10,910 88,01,093
2,64,65,999 93,89,391
5. Salaries, Wages, Bonus include :
2007-2008 2006-2007
a) Provision for Bonus 26,12,844 22,34,733
b) Gratuity paid 14,57,565 27,02,888
Amount in Rupees5. Salaries, Wages, Bonus include :
2007-2008 2006-2007
a) Provision for Bonus 26,12,844 22,34,733
b) Gratuity paid 14,57,565 27,02,888
Amount in Rupees
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
8. As per Accounting Standard 15 “Employee Benefits”, the disclosures of employee benefits as defined in the Accounting Standard
are given below :
i) The Company during the year has changed the method of providing liability for leave salary from actual amount payable
against leave due at the year end to actuarial valuation by adopting unit credit method and accordingly excess liability as on
01/04/2007 amounting to Rs 3,02,538/- was written off and credited to profit and loss account as prior period adjustments.
If the leave salary liability provided as per last year method, the profit for the year would be lower by Rs 4,964/- and provisions
would be higher by Rs 3,07,502/-.
ii) The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards)
Rules, 2006, are given below :
Defined Contribution Scheme
Contribution to Defined Contribution Plan, recognised for the year are as under : (Rs in lac)
Employer’s Contribution to Provident Fund 10.56
Employer’s Contribution to Pension Fund 7.93
The guidance on implementing Accounting Standard (AS-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
Glass Equipment (India) Limited | 105
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
by the employer 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 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 disclosure as required by the aforesaid 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 Employee’s gratuity fund scheme managed by Birla Sun Life Insurance 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 is unit separately to build up the final
obligation. The obligation for leave encashment is recognised in the same manner as gratuity.
I) Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances
thereof are as follows :
Rupees in lac
Gratuity Leave Encashment
Funded Unfunded
Liability at beginning of the year 86.12 4.82
Current Service Cost 5.68 2.27
Interest Cost 7.03 4.82
Actuarial (Gain) / Loss -1.11 -4.86
Benefits Paid 6.94 1.58
Liability at the end of the year 90.78 5.47
II) Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:
Rupees in lac
Gratuity (Funded)
Fair value of plan assets at the beginning of the year 87.78
Expected return on plan assets 7.02
Actuarial Gain / (Loss) -6.61
Employer contribution 6.31
Benefits paid 6.94
Fair value of plan assets at the end of the year 87.56
Total Actuarial Gain / (Loss) to be recognised
III) Expense recognised in the Income statement (Under the head “Salaries, Wages, Gratuity & Bonus” – Refer Schedule – P.
Rupees in lac
Gratuity Leave Encashment
Funded Unfunded
Current Service Cost 5.68 2.27
Interest Cost 7.03 4.82
Expected Return on Plan Assets 7.02 --
Net Actuarial (Gain) / Loss to be recognised 5.50 -4.86
Expenses recognised in Profit and Loss Account 11.19 2.23
106 | Glass Equipment (India) Limited
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
IV) Balance Sheet reconciliation
Rupees in lac
Gratuity Leave Encashment
Funded Unfunded
Opening Net Liability (1.66) --
Expenses as above 11.19 2.23
Employers contribution 6.31 --
Amount Recognised in Balance Sheet 3.22 2.23
V) Compensated Absences
The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the
Company as at March 31, 2008 is Rs 5.47 lac.
VI) Principal Actuarial assumptions at the Balance Sheet (Rs in lac)
Gratuity Leave Encashment
Funded Unfunded
Mortality Table LICI 1994-1996 LICI 1994-1996
Discount Rate (per annum) 8.50% 8.50% / 7.50%
Expected rate of return on plan assets (per annum) 8.00% –
Rate of escalation in salary (per annum) – 5.00%
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors including supply and demand in the employment market. The above information is 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 2008-2009 is yet to be determined.
9. During the year the plant and machinery as on 31/03/2007 have been revalued by an approved valuer on 31/03/2008 by using
residual replacement value method and the resultant surplus of Rs 4,99,95,753/- arising thereon as compared to net book value
has been transferred to Revaluation Reserve.
No depreciation is provided on increase value of plant and machinery since revaluation is done on 31/03/2008.
10. To the extent information is available with the Company, there is no overdue amount as on 31st March, 2007 to Small Scale
Industries and / or Ancillary Industrial Suppliers on account of principal.
11. Stores and Spares consumption includes partly for repairs and replacement less directly capitalised.
12. Profit and / or Loss on sales of raw materials and stores remains adjusted in consumption.
13. Earning per Share
2007-2008 2006-2007
Net Profit attributable to Shareholders 1,57,44,972 46,13,880
Weighted average number of equity shares 26,400 26,400
Basic earning per share of Rs 100/- each 596 175
The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and diluted earning pershare of the Company are same.
Amount in Rupees
Glass Equipment (India) Limited | 107
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
14. Deferred Tax :Break up of deferred tax assets / liabilities and reconciliation of current year deferred tax charge:
Opening Set off ClosingRupees Rupees Rupees
Deferred Tax Liabilities
Tax impact of difference between carrying amount of fixed 91,54,044 -18,50,598 73,03,446
assets in the financial statements and income tax return (1,04,35,005) (-12,80,961) (91,54,044)
Total (A) 91,54,044 -18,50,598 73,03,446
(1,04,35,005) (-12,80,961) (91,54,044)
Deferred Tax Assets
Tax impact of difference between valuation of inventories 21,73,995 9,79,462 31,53,457
in the financial statements and income tax return (14,16,732) (7,57,263) (21,73,995)
Tax impact of expenses charged in the financial
statements but allowable as deductions in future
years under income tax :
Expenditure of the nature mentioned in 12,88,452 -8,58,252 4,30,200
Section 43-B of the Income Tax Act, 1961. (6,27,230) (6,61,222) (12,88,452)
Total (B) 34,62,447 1,21,210 35,83,657
(20,43,962) (14,18,485) (34,62,447)
Net Deferred Tax Liability 56,91,597 19,71,808 37,19,789
(83,91,043) (26,99,446) (56,91,597)
15. The Company’s exclusive business is manufacturing and selling of I.S. Glass Forming Machines and its Spares & Accessories and
as such in the opinion of the management this is the only reportable segment, as per Accounting Standard – 17 on Segment
Reporting, issued by the “The Institute of Chartered Accountants of India”.
16. Information pursuant to paragraphs 3 & 4 of Part II of Schedule VI of the Companies Act, 1956.A) Capacity & Actual Production
Class of Goods Units (a) *Licenced Capacity Installed Capacity Actual Production
Glass Manufacturing Machine Nos 10 7 –
(10) (7) (–)
Feeder, Accessories & Spares (b) Nos 15 7 –
(15) (7) (–)
Glass Ceramic Decorating Machines, Nos 12 12 –
Accessories & Spare Parts (12) (12) (-)
Fully Automatic Tile Press Nos 10 10 –
(10) (10) (–)
Tile Loading Equipment Nos 10 10 –
(10) (10) (–)
Tile Sorting & Packing Equipment Nos 15 15 –
(15) (15) (–)
I.S. Machine Conversion Nos 10 10 3
(10) (10) (5)
Bottle Inspection & Packing Machine Nos 10 10 –
(10) (10) (–)
108 | Glass Equipment (India) Limited
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
Class of Goods Units (a) *Licenced Capacity Installed Capacity Actual Production
Conveyor, Single Liners, Ware Transfer, Nos 10 10 7
Accessories & Spares (10) (10) (12)
Annealing / Decorating Lehr Nos 5 5 –
(5) (5) (–)
Motor Driven Press & Fire Finishing Machine Nos 5 5 –
(5) (5) (–)
(a) Company has been further permitted to manufacture Filter Presses and Ball Mills (Ceramic Machinery) Worth Rs 30 lac per
annum within its total licenced capacity of 10 Glass Manufacturing Machine and 15 Feeders and Spares and Accessories.
(b) The Industrial Licence covers manufacturing of accessories and spares. Since capacity thereof has not been specified in the
industrial licence, information of installed capacity and actual production are not given.
* As Certified by the management
B) Purchases, Stocks and Sales :
Class of Goods Unit Opening Stock Purchases Closing Stock Sales ***
Qty Value in Qty Value in Qty Value in Qty Value in
(Rupees) (Rupees) (Rupees) (Rupees)
Feeder, Accessories & Spares Nos – – – – – – – –
(–) (–) (–) (–) (–) (–) (–) (–)
I.S. Machine / Conversion Nos – – – – – – 3 4,47,64,564
(–) (–) (–) (–) (–) (–) (5) (5,20,09,962)
Conveyor, Single Liners, Ware Nos – – – – – – 7 83,72,285
Trfr, Accessories & Spares (–) (–) (–) (–) (–) (12) (1,23,78,607)
* * **
Spares & Accessories Nos – 5,19,76,432 – 6,84,66,579 – 6,43,45,924 – 14,66,99,722
(–) (4,03,83,380) (–) (4,54,45,829) (–) (5,19,76,432) (–) (7,01,79,594)
Service Revenue – – – – – – – 42,77,845
(–) (–) (–) (–) (–) (–) (–) (18,42,460)
Others – – – – – – – 5,54,038
(–) (–) (–) (–) (–) (–) (–) (4,66,020)
* Includes cost of spares and accessories Rs 3,62,42,145, (Previous year Rs 2,73,93,374) taken for departmental use.
** Includes finished stock of spares and accessories Rs1,43,17,069, (Previous year Rs 1,64,02,021).
*** Sales are inclusive of Excise Duty
C) Raw Material & Components consumed :
Items Unit Quantity Rupees
Castings Pcs 23,455 73,38,720
(24,122) (63,52,189)
Steels M.Ton 111 1,05,81,190
(101) (59,22,347)
Accessories & Components – – 5,40,11,062
(3,65,92,740)
Note: Consumption is including of Sales Rs 1,78,04,752 (Previous year Rs 92,02,197 ).
Glass Equipment (India) Limited | 109
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
D) Value of Raw Materials, Components & Spare Parts consumed (Including Sales)
(As certified by the Management)
2007-2008 2006-2007
Raw Material Spare Raw Material Spare
& Components Parts & Components Parts
Rupees % Rupees % Rupees % Rupees %
Imported 1,28,54,341 18 -- -- 83,99,078 17 -- --
Indigenous 5,90,76,630 82 72,56,211 100 4,04,68,198 83 43,47,972 100
Total 7,19,30,971 100 72,56,211 100 4,88,67,276 100 43,47,972 100
2007-2008 2006-2007
E) CIF Value of Imports– Spares / Components 2,05,08,532 92,31,563
F) Expenditure in Foreign Currency– Travelling 8,270 1,88,891– Trade Promotion -- 1,48,019
G) FOB Value of Export 14,27,639 24,52,749
H) Figures in brackets represent previous year figures.
J) Related Party Disclosure :-Related Party disclosure as identified by the management in accordance with the Accounting Standard 18 issued by theInstitute of Chartered Accountants of India (“ICAI”) and effective from 1st April, 2001.
a) Name of the related parties where control exists – Holding Company
• Hindusthan National Glass & Industries Limited
b) Other related parties and nature of relationship with whom the Company had transactions
• Fellow Subsidiary :-
– Quality Minerals Limited
• Associates
– Ace Glass Containers Limited
– Mould Equipment
• Entities over which Directors and their relatives have influence
– Hasow Automation Limited
– Somany Foam Limited
– Segment Mercantile Pvt. Ltd.
• Directors and Relatives
– Mr C.K.Somany – Chairman
Disclosure of Transactions between The Group & Related parties and status of outstanding balances as on 31st March, 2008.
Amount in Rupees
110 | Glass Equipment (India) Limited
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
i) Current Year Rs In lac
Holding Fellow Associates Entities over which Directors andCompany Subsidiary Directors and their their relatives
relatives have influence
INCOME
Sales 1616.42 – 442.74 – –
Sale of Assets – – – – –
Services 4.85 – 43.21 – –
Interest Received – – – 9.98 –
EXPENSES
Purchases 8.90 – – – –
Purchase of Assets – – – – –
Hire Charges 16.00 – – – –
Remuneration – – – – 32.43
Sitting Fees – – – – 0.01
Interest Paid – 6.83 – – –
Dividend Paid 0.26 – – – –
Rendering of Services – – 0.03 – –
Borrowings – 65.00 – – –
ICD Given – – – – –
Investments – – – 4.73 –
Guarantee/Corporate Guarantee :-
- Given 50.00 – – 3235.75 –
- Taken 381.00 – – – –
Out standings :-
- Receivables 658.58 – – – –
- Payables – – – – –
- Dividend Payable 26.40 – – – –
Glass Equipment (India) Limited | 111
Schedules forming part of the Accounts
Schedule - S I NOTES (Contd.)
ii) Previous Year Rs In lac
Holding Fellow Associates Entities over which Directors andCompany Subsidiary Directors and their their relatives
relatives have influence
INCOME
Sales 1071.52 – 308.42 – –
Sale of Assets – – – – –
Services 19.15 – 1.53 – –
Interest Received – – – 57.39 –
EXPENSES
Purchases 13.01 – – – –
Purchase of Assets – – – – –
Hire Charges 16.00 – – – –
Remuneration – – – – 17.42
Sitting Fees – – – – 0.02
Interest Paid – 6.83 – – –
Dividend Paid 0.26 – – – –
Rendering of Services – – 0.50 – –
Borrowings – 70.29 – – –
ICD Given – – – 516.51 –
Investments – – – 4.73 –
Guarantee/Corporate Guarantee :-
- Given 50.00 – – 3235.75 –
- Taken 381.00 – – – –
Out standings :-
- Receivables 52.18 – – – –
- Dividend Payable 0.26 – – – –
17. Previous year figures have been re-grouped or re-arranged where ever considered necessary.
18. Schedule A to S form an integral part of Balance Sheet and Profit & Loss Account.
Signature to Schedule A to S
As per our report attached
For Krishan Somani & Associates
Chartered Accountants
-sd- -sd- -sd-
Krishan Somani Sanjay Somany C.K.Somany
Proprietor Director Chairman
417, Laxmi Tower, Commercial Complex,
Azadpur, Delhi – 110033
June 11, 2008
112 | Glass Equipment (India) Limited
Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956I) Balance Sheet Abstract and general Company’s General Business Profile
0 6 5 5 9 5
3 1 0 3
Registration No. State Code
Balance Sheet Date
I. Registration Details
II. Capital Raised during the year (amount in Rs ’000)
III. Position of Mobilisation and Deployment of Funds (Amount in Rs Thousands)
2 0 0 8
2 1
Total Assets
Private Placement
N I L
Sources of Funds
Application of Funds
Reserves and Surplus
IV. Performance of the Company (Amount in Rs Thousands)
Item Code No. (ITC code) Product descriptionsV. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)
Rights Issue
N I L
Bonus Issue
N I L
Public Issue
N I L
2 5 8 9 2 1
Total Liabilities
2 5 8 9 2 1
1 9 2 1 2 5
Unsecured Loans
6 5 0 0
Paid–up Capital
2 6 4 0
Secured Loans
2 1 4 7 4
Deferred Tax Liabilities
3 7 2 0
Net Fixed Assets
8 7 5 5 6Net Current Assets
1 3 8 9 0 3
Accumulated Loss
N I L
Net Income
1 7 8 4 3 2
Earnings per Share in Rs
(Please tick Appropriate box + for Profit, - for Loss)
5 9 6
8 4 7 5 1 0 0 0
Total Expenditure
1 5 5 2 1 0
Dividend %
1 0 0
+ – Profit / Loss Before Tax
√ 2 3 2 2 2
+ – Profit / Loss After Tax
√ 1 3 7 7 3
G L A S S F O R M I N G M A C H I N E
Investments
N I LMiscellaneous Expenditure
N I L
Item Code No. (ITC code) Product descriptions
8 4 7 5 9 0 0 0 S P A R E S & A C C E S S O R I E S
Item Code No. (ITC code) Product descriptions
O V E R H A U L I N G & S E R V I C E S
Quality Minerals Limited | 113
Directors’ Report
To the Shareholders of Quality Minerals Ltd.
Working ReviewThe Company is solely in the business of supply of Feldspar
Powder. The Feldspar Lumps purchased from mines are grinded
through job workers and the powder so produced is supplied.
The Company has achieved the Total Income of Rs 244.73 lac
against Rs 180.02 lac in the previous year.
DividendThe Directors do not recommend any dividend for the year and
the entire profit is to be carried forward.
Fixed DepositThe Company has not accepted any deposits from the public
within the meaning of Section 58A of the Companies Act, 1956
and as such no amount of principal or interest was outstanding
as of the Balance Sheet date.
DirectorsSri. Arun Kataruka retires by rotation from the Board of Directors
of the Company at the ensuing Annual General Meeting and
being eligible offers himself for re-appointment.
Auditors’ ReportThe Notes on Accounts, as referred to in the Auditors’ Report
are self explanatory and therefore, do not call any further
comments.
AuditorsThe Auditors M/s J.M.Vyas & Company, Chartered Accountants,
Jaipur, the auditors of the Company retire at the ensuing Annual
General Meeting and being eligible, offer themselves for re-
appointment.
Your Directors have pleasure in presenting the Thirty Fourth Annual Report together with Audited Accounts for the year ended
31st March, 2008.
Financial Results (Rs in lac)
Year ended 31.03.2008 Year ended 31.03.2007
Total Income 244.73 180.02
Profit before Interest, Depreciation & Tax 17.27 17.79
Less:
Depreciation 0.20 0.22
Taxation - Current 5.81 5.26
Deferred - Income Tax
- Earlier Years 0.71 –
- Deferred Income Tax 0.02 0.01
- Fringe Benefit Tax 0.01 –
Net Profit 10.52 12.30
Add: Balance brought forward from last year 112.60 100.30
Balance carried forward 123.12 112.60
114 | Quality Minerals Limited
Particulars of Employees There are no employees covered under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees).
Conservation of Energy & Technology Absorption & Foreign Exchange Earnings & Outgo.A) Conservation of Energy
Our Operations are not energy intensive, The Company has no direct consumption of Power and Fuel.
B) Technology Absorption
Not Applicable
C) Foreign Exchange Earnings & Outgo
The Company has neither any Foreign Exchange earning nor outgo.
Your Directors hereby confirm :
- That in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation
relating to material departures.
- That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that
are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended
on March 31, 2008 and of the profit of the Company for the year ended March 31, 2008.
- That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
- That the Directors had prepared the Annual Accounts on a going concern basis.
AcknowledgementYour Directors place on record their grateful appreciation for the continued support , assistance and co-operation received from Central
& State Governments,Banks,Suppliers, Customers and Business Associates.
Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company’s employees.
Registered Office On behalf of the Board of Directors
W-27, Greater Kailash II,
New Delhi – 110048.
Place : Delhi (Amita Somany ) ( D.D.Taparia)
Date : May 19, 2008 Managing Director Director
DIRECTORS’ RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THECOMPANIES ACT, 1956.
Quality Minerals Limited | 115
Auditors’ Report The MembersQUALITY MINERALS LIMITED
1. We have audited the attached Balance Sheet of M/s Quality
Minerals Limited as at March 31, 2008 and Profit & Loss
Account for the year ended on that date. These financial
statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with accounting
standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003
issued by the Central Government in terms of Section 227
(4A) of the Companies Act, 1956 we annex hereto a
statement on the matters specified in paragraphs 4 and 5 of
the said Order.
4. Further to our comments in the Annexure referred to above,
we report that:
a) We have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purpose of our audit.
b) In our opinion proper books of account as required by
law have been maintained by the Company so far as
appears from our examination of such books.
c) The Balance Sheet and Profit & Loss Account dealt with
by this report are in agreement with the books of
accounts.
d) In our opinion, the Balance Sheet, the Profit & Loss
Account dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956 to the extent
possible.
e) On the basis of written representations received from the
Directors as on March 31, 2008 and taken on record by
the Board of Directors, we report that none of the
Directors is disqualified as on March 31, 2008 from being
appointed as a Director in terms of clause(g) of sub-
section (i) of Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and
according to the explanations given to us the said
accounts give the information required by the Companies
Act, 1956 in the manner so required and read with 'Notes
On Accounts' (Schedule K) give a true and fair view in
conformity with the accounting principles generally
accepted in India.
g) There is no amount of Cess payable under section 441A
of the Companies Act., 1956.
(i) in the case of Balance Sheet of the state of affairs of
the Company as at March 31, 2008
(ii) in the case of Profit and Loss Account of the PROFIT
of the Company for the year ended on the date.
For & On behalf of
J. M Vyas & Co.,
Chartered Accountants
Jaipur J.M Vyas
May 19, 2008 Partner
116 | Quality Minerals Limited
Statement of matters specified by the Companies (Auditors Report) Order 2003 relating to the financial yearended March 31, 2008QUALITY MINERALS LIMITED
(i) a) The Company has maintained proper records showing
full particulars, including quantitative details and
situation of fixed assets.
b) The fixed assets have been physically verified by the
management during the year. In our opinion, the
frequency of verification is reasonable having regard
to the size of the Company and the nature of its assets.
The discrepancies reported on such verification were
not material and have been properly dealt with in the
books of account,
c) None of the fixed assets have been sold during the
year.
(ii) a) The management has conducted physical verification
of inventory at reasonable intervals.
b) In our opinion, the procedures followed by the
management for such physical verification are
reasonable and adequate in relation to size of the
Company and nature of its business.
c) The Company is maintaining proper records of
inventory. The discrepancies noticed on verification
between physical inventories and the book records
were not material in relation to the operation of the
Company and the same have been properly dealt with
in the books of account.
(iii) a) The Company has not granted loans, secured or
unsecured to companies, firms or other parties
covered in the register maintained under section 301 of
the Companies Act, 1956. There is One party and
amount involved is Rs 65,00,000/- (previous year
Rs 70,29,347/-)
b) In our opinion, the rate of interest and other terms and
conditions of the loan granted by the Company, are
prima facie not prejudicial to the interest of the
Company.
c) The receipt of interest and principal amount was
regular.
d) The overdue amount is not more than rupees one lakh,
reasonable steps have been taken by the Company for
recovery of the principal and interest.
e) The Company has not taken any loans, secured or
unsecured to companies, firms or other parties
covered in the register maintained under section 301 of
the Companies Act, 1956.
f) The rate of interest and other terms and conditions of
loans taken by the Company, secured or unsecured,
are not prima facie prejudicial to the interest of the
Company; and
g) Payment of the principal amount and interest are also
regular.
(iv) There is an adequate internal control system
commensurate with the size of the Company and the
nature of its business, for the purchase of inventory and
fixed assets and for the sale of goods and services. There
is no continuing failure to correct major weakness in
internal control system.
(v) a) Based on the audit procedures applied by us and
according to the information and explanations
provided by the management, we are of the opinion
that all transactions that need to be entered into the
register in pursuance of Section 301 of the Companies
Act, 1956 have been so entered.
b) Based on the information and explanation given to us,
it is our opinion that these transactions have been
made at a reasonable prices having regard to the
prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and
explanations given to us, the Company has not accepted
any deposits from the public within the meaning if Section
Quality Minerals Limited | 117
58A and 58AA of the Companies Act, 1956 and the rules
frame there under.
(vii) The Company has an internal audit system, which in our
opinion commensurate the size and nature of its business.
(viii) As informed to us, the maintenance of cost records has
not been prescribed by the Central Government u/s
209(1)(d) of the Companies Act, 1956, in respect of the
activities carried on by the Company.
(ix) a) The Company is regular in depositing the statutory
dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income
tax, Sales tax, Wealth tax, Customs duty, Excise duty
and other statutory dues with the appropriate
authorities.
b) According to the information and explanations given
to us , there are no dues of Sales tax, Income tax,
Customs duty, Wealth tax, Excise duty outstanding on
account of any dispute.
(x) The Company has no accumulated losses at the end of
financial year and it has not incurred any cash losses in
the current and immediately preceding financial year.
(xi) The Company has not defaulted in the repayment of dues
to any financial institution, bank or debenture holders.
(xii) The Company has not granted any loans and advances
on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The provisions of any special statue applicable to chit are
not applicable in respect of nidhi/ mutual benefit fund/
societies:-
(xiv) In our opinion the Company has maintained proper
records of transactions and contracts of the investments
dealt in by the Company and timely entries have been
made therein. The investments made by the Company are
held in its own name.
(xv) The Company has not given any guarantees for loans
taken by others from banks or financial institutions.
(xvi) As informed to us, that the Company has not obtained the
term loans.
(xvii) On the basis of an overall examination of the balance sheet
and the information and explanations given to us, we report
that the Company has not utilised any funds raised on
short term basis for long term investments and vice-versa.
(xviii) The Company has not made any preferential allotment of
shares to the parties or companies covered under Section
301 of the Companies Act, 1956, during the year.
(xix) The Company has not issued any debentures.
(xx) The Company has not raised any money through a public
issue during the year.
(xxi) Based upon the audit procedures performed and the
information and explanations given to us by the
management, we report that no fraud on or by the
Company has been noticed or reported during the year.
For & On behalf of
J. M Vyas & Co.,
Chartered Accountants
Jaipur J.M Vyas
May 19, 2008 Partner
118 | Quality Minerals Limited
The Schedules referred to above form integral part of Balance Sheet
As per our report of even date
For J.M. Vyas & Co. For Quality Minerals Ltd.
Chartered Accountants
JM Vyas D.D. Taparia Amita Somany
Partner Director Managing Director
Jaipur
May 19, 2008
Balance Sheet As at 31st March, 2008Amount in Rupees
Schedules As at As at
March 31, 2008 March 31, 2007
SOURCES OF FUNDS
Shareholders' Funds
Share Capital A 941,000 941,000
Reserves & Surplus B 12,369,647 11,317,100
13,310,647 12,258,100
Deferred Tax Liability (Net)
(Refer note 'B-5' of Schedule 'K') 32,057 29,569
Total 13,342,705 12,287,669
APPLICATION OF FUNDS
Fixed Assets C
Gross Block 537,529 537,529
Less: Depreciation 298,332 278,181
Net Block 239,196 259,349
Investments D 120,000 120,000
Current Assets, Loans & Advances
Inventories E 434,520 461,936
Sundry Debtors F 5,695,224 3,951,974
Cash & Bank Balances G 1,199,759 605,923
Loans & Advances H 10,567,145 9,857,819
17,896,648 14,877,652
Less: Current Liabilities & Provisions
Current Liabilities I 3,091,725 1,800,307
Provisions J 1,821,415 1,169,024
4,913,141 2,969,331
Net Current Assets 12,983,507 11,908,321
Total 13,342,705 12,287,669
Significant Accounting Policies and Notes on Accounts K
Quality Minerals Limited | 119
The Schedules referred to above form integral part of Profit & Loss Account
As per our report of even date
For J.M. Vyas & Co. For Quality Minerals Ltd.
Chartered Accountants
JM Vyas D.D. Taparia Amita Somany
Partner Director Managing Director
Jaipur
May 19, 2008
Profit and Loss Account For the year ended 31st March, 2008
SCHEDULES 2007-2008 2006-2007
INCOME
Sales & Services 23,705,689 17,445,337
Miscellaneous Receipt 461 611
Increase/(Decrease) in Stock 1 (27,416) (201,726)
Total 23,678,734 17,244,222
EXPENDITURE
Materials 15,216,771 10,411,816
Manufacturing, Administrative and other Expenses 2 7,528,220 5,811,909
Interest (Net) 3 (793,615) (757,500)
Depreciation 20,151 22,433
Total 21,971,527 15,488,658
Profit before Tax 1,707,207 1,755,564
Less: Provision for Income Tax
- Current 580,856 526,669
- Earlier Years 70,757 –
- Deferred 2,488 1,331
- Fringe Benefit Tax 558 –
Profit after Tax 1,052,548 1,230,226
Add: Balance brought forward from last year 11,260,272 10,070,563
Balance Carried to Balance Sheet 12,312,820 11,260,272
Basic/ Diluted Earning per share 111.85 130.74
(Refer Note ' B-12' of Schedule ' K ')
Significant Accounting Policies and Notes on Accounts K
Amount in Rupees
120 | Quality Minerals Limited
Cash Flow Statement For the year ended 31st March, 2008
31.03.2008 31.03.2007
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax 1,707,207 1,755,564
Adjustment for :
Depreciation 20,151 22,433
Interest (Net) (793,615) (757,500)
Profit on sale of Fixed Assets – –
Operating Profit before working capital changes 933,743 1,020,497
Adjustment for :
Loans and advances (709,326) (1,742,221)
Trade receivables (1,743,250) (2,315,072)
Inventories 27,416 201,725
Trade and other payables 1,943,849 2,063,977
Cash generated from operations 452,432 (771,094)
Direct Taxes paid (652,211) (526,669)
Net Cash from Operating activities (199,779) (1,297,763)
B. CASH FLOW FROM INVESTING ACTIVITIES
Interest received 793,615 757,500
(Purchase)/Sale of Fixed Assets – –
Net Cash used in Investing Activities 793,615 757,500
C. CASH FLOW FROM FINANCING ACTIVITIES
(Repayment)/Proceeds from short term borrowings (net) 0 0
Miscellaneous Expenditure 0 0
Net Cash from Financing Activities 0 0
NET CHANGES IN CASH AND CASH EQUIVALENTS 593,836 (540,263)
CASH AND CASH EQUIVALENTS-OPENING BALANCE 605,923 1,146,185
CASH AND CASH EQUIVALENTS-CLOSING BALANCE 1,199,759 605,923
(Represents Cash in hand and Bank balances)
Amount in Rupees
As per our report of even date
For J.M. Vyas & Co. For Quality Minerals Ltd.
Chartered Accountants
JM Vyas D.D. Taparia Amita Somany
Partner Director Managing Director
Jaipur
May 19, 2008
Quality Minerals Limited | 121
Schedules to the Balance Sheet as at March 31,2008
Schedule - A I SHARE CAPITAL
2007-2008 2006-2007
AUTHORISED10,000 Equity Shares of Rs 100 each 1,000,000 1,000,000 Issued, Subscribed & Paid Up9,410 Equity Shares of Rs 100 each fully paid up 941,000 941,000
941,000 941,000
Amount in Rupees
Schedule - D I INVESTMENTS (At Cost)(In fully paid shares) - Other than Trade
2007-2008 2006-2007
12,000 Equity Shares of Rs 10/- each in Surendra Khanij (P) Ltd. 120,000 120,000 120,000 120,000
Schedule - B I RESERVES AND SURPLUS
Schedule - C I FIXED ASSETS
Investment Allowance Reserve
As per Last Balance Sheet 56,828 56,828
Profit & Loss Account
As per Annexed Account 12,312,820 11,260,272
Total 12,369,647 11,317,100
GROSS BLOCK DEPRECIATION NET BLOCK
As at Sales/adj. As at Upto For the Written back Upto As at As atPARTICULARS 01.04.2007 during the 31.03.2008 31.03.2007 Year during the 31.03.2008 31.03.2008 31.03.2007
year year
Building 355,338 355,338 176,624 8,936 – 185,560 169,778 178,714
Electrical fitting 9,182 9,182 7,370 252 – 7,622 1,560 1,812
Plant & Machineries 173,009 173,009 94,188 10,964 – 105,152 67,857 78,821
Vehicle – – – – – – – –
Total 537,529 537,529 278,182 20,151 – 298,332 239,196 259,348
Previous Year 1,267,564 1,267,564 708,829 85,973 – 794,802 472,761
Schedule - E I CURRENT ASSETS, LOANS & ADVANCES
Inventories
(As taken, valued & certified by the Management)
Feldspar Lumps 434,520 461,936
434,520 461,936
Schedule - F I SUNDRY DEBTORS(Unsecured, considered good)
Debts outstanding for a period exceeding six months – –
Other Debts 5,695,224 3,951,974
5,695,224 3,951,974
122 | Quality Minerals Limited
Schedules to the Balance Sheet as at March 31,2008
Schedule - G I CASH & BANK BALANCES
2007-2008 2006-2007
Cash in hand 173,813 258,098 Balance with Scheduled Banks:In Current Account 1,025,946 347,825
1,199,759 605,923
Amount in Rupees
Schedules to the Profit & Loss Account for the year ended March 31, 2008
Schedule - 1 I INCREASE/(DECREASE) IN STOCK
2007-2008 2006-2007
Closing Stock:Feldspar Lumps 434,520 461,935
434,520 461,935 Less : Opening StockUnwashed Silica Sand –Feldspar Lumps 461,935 663,661
(27,416) (201,726)
Amount in Rupees
Schedule - H I LOANS & ADVANCES(Unsecured, considered good, unless otherwise specified)
Loans
Deposited with a Company 6,500,000 7,029,347
Deposit in Bank 1,500,000 1,500,000
Advances
Advances recoverable in cash or for value to be received 2,567,145 1,328,472
10,567,145 9,857,819
Schedule - I I CURRENT LIABILITIES & PROVISIONS
Sundry Creditors 2,548,295 1,130,904
Other Liabilities 543,430 669,403
3,091,725 1,800,307
Schedule - J I PROVISIONS
For Taxation 1,815,229 1,163,616
Unavailed Leave 5,628 5408
Fringe Benefit Tax 558 –
For Proposed Dividend
For Tax on Proposed Dividend
1,821,415 1,169,024
Quality Minerals Limited | 123
Schedules to the Profit & Loss Account for the year ended March 31, 2008
Schedules to the Balance Sheet and Profit & Loss Account
Schedule - 2 I ADMINISTRATIVE & OTHER EXPENSES
2007-2008 2006-2007
Salaries, Bonus & LTA 219,759 186,353 Insurance - - Miscellaneous Expenses 226,487 163,493 Grinding Charges 6,705,789 5,096,018 Freight Charges 69,443 59,311 Director's Remuneration 300,000 300,000 Payment to Auditors :Audit Fees 6,742 6,734 Other Services – –
7,528,220 5,811,909
Amount in Rupees
Schedule - 3 I INTEREST
Interest Paid – –
Less: Interest Received/Receivable 793,615 757,500
(793,615) (757,500)
Schedule - K I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
A. Significant Accounting Policies
(1) Basis of Accounting
The Company prepares its accounts under the historical cost convention on accrual basis, except otherwise stated in accordance
with normally accepted accounting principles and applicable Accounting Standards in India.
(2) Sales
Sales are recognised on dispatch of goods by the Company and are reflected in accounts at net realisable value.
(3) Fixed Assets & Depreciation
Fixed Assets are shown at cost less depreciation. Depreciation has been charged at the rates specified in Schedule XIV to the
Companies Act, 1956.
(4) Valuation of Inventory
Raw material is valued at lower of cost or net realisable value.
(5) Earning per Share
The earnings considered in ascertaining the Company's earning per share comprises of the net profit after tax. The number of
shares used in computing basic earning per share is weighted average number of shares outstanding during the year.
124 | Quality Minerals Limited
Schedules to the Balance Sheet and Profit & Loss Account
Schedule - K I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
B. Notes on Accounts
(1) Taxation
Tax expenses for the year, comprising current tax and deferred tax is included in determining the net profit for the year. A provision
is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws.
31.03.2008 31.03.2007
(2) Sundry Debtors include :- Due from holding company 5541637 3570135
(3) Amount paid or credited to the Auditors :Audit Fee 6742 6734
6742 6734
(4) In consonance with Accounting Standard - 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants
of India, during the year the Company has accounted for deferred tax.
(5) Deferred Tax:
Opening Balance Charged to P/L A/c Closing Balance
(Rupees) (Rupees) (Rupees)
Breakup of deferred tax assets/liabilities and reconciliation of current year deferred tax charge:Deferred Tax Liabilities:The impact of difference between carrying amount of fixed 33922 575 34497assets in the financial statements and income tax return Total (A) 33922 575 34497Deferred Tax Assets:The impact of difference between carrying amount of fixed assets in the financial statements and income tax return – – –Tax impact of expenses charged in the financial Statement but allowable as deductions in future year under Income Tax Act:Provision of leave encashment 4352 1913 2439Total (B) 4352 1913 2439Net Deferred Tax Liability Total (A - B) 29569 2488 32057
(6) Related Party Transactions:
The Company is controlled by Hindusthan National Glass & Industries Limited which owns 99.73% of the Company's shares.
The following related party transactions were carried during the year:
Name of the Related Party Nature of Nature of 31.03.2008 31.03.2007
Relationship Transaction Rupees Rupees
Receivable
1. Hindusthan National Glass Holding Company Income:
& Industries limited Sales 23,705,689 17,445,337
Re-imbursement of expenses
Expenses:
Re-imbursement of expenses
3. Glass Equipment (India) Ltd. Under common control Income:
Interest on loan 682,500 682,500
4. Smt. Amita Somany Managing Director Remuneration 300,000 300,000
Quality Minerals Limited | 125
Schedules to the Balance Sheet and Profit & Loss Account
Schedule - K I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
(7) The Company's exclusive business is dealing in minerals and as such in the opinion of the management this is the only reportablesegment, as per Accounting Standard 17 on Segment Reporting, issued by the Institute of Chartered Accountants of India.
(8) In view of the applicability of the provisions of Section 43 A (i) of the Companies Act, 1956, the Company has become a deemed publiccompany and Registrar of Companies, Rajasthan, Jaipur has already made necessary endorsement in the Certificate of incorporation.
(9) Previous year figures have been re-grouped or re-arranged wherever considered necessary.
(10) Schedule A to K and 1 to 3 form an integral part of Balance Sheet as at March 31, 2008 and Profit & Loss Account for the yearended on that date respectively.
(11) Figures have been rounded off to the nearest rupee.
(12) Earning Per Share
31.03.2008 31.03.2007Rupees Rupees
Net Profit attributable to Share Holders 1052548 1230226Weighted average number of equity shares 9410 9410Basic earning per share of Rs 100/- each 111.85 130.74
The Company does not have any outstanding diluted potential equity shares.
Consequently the basic and diluted earning per share of the Company are the same.
C. Information pursuant to paragraphs 3 & 4 of Part II of Schedule VI of the Companies Act, 1956.
(1) Capacity & Actual Production:
Class of Goods Units Licensed Capacity Installed Capacity Actual Production
Feldspar Powder M.T. N A N A 13,038.28 (2,811.91)
Opening Stock Purchases Closing Stock Sales/Consumption
(2) Purchase, Stock and Sales:Feldspar Powder (Normal Grade) Unit (MT) – – – 13,038.28
(2,811.91)Value (Rupees) – – – 23705689Feldspar LumpsUnit (MT) 649.150 18,471.030 509.290 18,611 M.T. 0.000 0.000 – (4,794.110)Value (Rupees) 461,935 15,216,771 434,520 15,244,186 Rupees 0 0 – (3,308,086)Unit (MT) 0M.T.Value (Rupees) 0Rupees
(3) Raw Material Consumed:
31.03.2008 31.03.2007 Units (MT) Value (Rupees) Units (MT) Value (Rupees)
Feldspar Lumps 18610.90 15,244,185 14879.076 10,613,542
As per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants
JM Vyas D.D. Taparia Amita SomanyPartner Director Managing DirectorJaipurMay 19, 2008
126 | Quality Minerals Limited
Schedules to the Balance Sheet and Profit & Loss AccountD. Balance Sheet Abstract and general profile of the Company under Part IV to Schedule VI of the Companies Act, 1956
1 5 7 6
3 1 0 3
Registration No. State Code
Balance Sheet Date
I. Registration Details
II. Capital Raised during the year (Amount in Rs '000)
III. Position of Mobilisation and Deployment of Funds (Amounts in Rs '000)
2 0 0 8
1 7
Total Assets
Private Placement
N I L
Sources of Funds
Application of Funds
Reserves and Surplus
IV. Performance of the Company (Amount in Rs '000)
Item Code No. (ITC code) Product descriptions
V. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)
Rights Issue
N I L
Bonus Issue
N I L
Public Issue
N I L
1 3 3 4 3
Total Liabilities
1 3 3 4 3
1 2 3 7 0
Unsecured Loans
N I L
Paid–up Capital
9 4 1
Secured Loans
N I L
Deferred Tax Liabilities
3 2
Net Fixed Assets
2 3 9Net Current Assets
1 2 9 8 4
Accumulated Loss
N I L
Turnover
2 3 6 7 9
Earnings per Share in Rs
1 1 1 . 8 5
N. A. N. A.
Total Expenditure
2 1 9 7 2
Dividend %
N I L
Profit / Loss Before Tax
1 7 0 7
Profit / Loss After Tax
1 0 5 3
Investments
1 2 0Miscellaneous Expenditure
N I L
As per our report of even date
For J.M. Vyas & Co. For Quality Minerals Ltd.
Chartered Accountants
JM Vyas D.D. Taparia Amita Somany
Partner Director Managing Director
Jaipur
May 19, 2008
Hindusthan National Glass & Industries Limited | 127
Auditors’ Report To the Board of Directors ofHindusthan National Glass & Industries Limited on the Consolidated Financial Statement of Hindusthan National Glass& Industries Limited and its Subsidiaries
1. We have examined the attached Consolidated Balance Sheet
of Hindusthan National Glass & Industries Limited ("the
Company") and its subsidiaries and associates as at 31st
March, 2008, the Consolidated Profit and Loss Account and
also the Consolidated Cash Flow Statement for the year then
ended on that date, annexed hereto. These consolidated
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the generally
accepted auditing standards in India. These standards
require that we plan and perform the audit to obtain
reasonable assurance whether the financial statements are
prepared, in all material respects, in accordance with an
identified financial reporting framework and are free of
material misstatements. An audit includes, examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates
made by the management, as well as evaluating the overall
financial statements. We believe that our audit provides a
reasonable basis for our opinion.
3. We did not audit the financial statements of subsidiary
companies Glass Equipment (India) Ltd., and Quality
Minerals Limited for the year ended 31st March, 2008,whose
financial statements reflects total assets of Rs 2771.76 lac as
at 31st March, 2008 , total revenues of Rs 2021.11 lac and
cash flows amounting to Rs 14.79 lac for the year ended as
on 31st March, 2008. These financial statements have been
audited by other auditors whose report(s) has (have) been
furnished to us, and in our opinion, insofar as it relates to the
amounts included in respect of the subsidiaries, is based
solely on the report of the other auditors.
4. Attention is invited to Note 2(i) of Schedule S regarding non-
ascertainment and recognition of derivative transactions. The
consequential impact of the above for the reasons mentioned
in the said note could not be ascertained and therefore cannot
be commented upon by us.
5. Subject to Para 4 above, impact of which on the Consolidated
Financial Statements could not be ascertained and
commented upon by us, we report that:
(i) the consolidated financial statements have been
prepared by the Company in accordance with the
requirements of Accounting Standard 21 "Consolidated
Financial Statements", Accounting Standard 23
"Accounting for Investment in Associates in Consolidated
Financial Statements", issued by the Institute of Chartered
Accountants of, India and on the basis of the individual
financial statements of the Company and its subsidiary
companies and associates included in the consolidated
financial statements.
(ii) In our opinion, based on our audit and the report of other
auditors, the Consolidated Financial Statements referred
to above give a true and fair view of the financial position
of the Company and its subsidiary companies and
associates as at 31st March, 2008 ; and of the results of
their operations for the year then ended in conformity with
the accounting principles generally accepted in India:
(a) in the case of the Consolidated Balance Sheet, of the
consolidated state of affairs of the Company and its
subsidiary companies and associates as at 31st
March, 2008; and
(b) in the case of the Consolidated Profit and Loss
Account, of the consolidated results of operations of
the Company and its subsidiary companies and
associates for the year then ended on that date ; and
(c) in the case of Consolidated Cash Flow Statement, of
the consolidated cash flows of the Company and its
subsidiary companies and associates for the year
then ended on that date,
For Lodha & Co
Chartered Accountants
H. K. Verma
Place: Kolkata Partner
Date: June 25, 2008 Membership No.: 55104
128 | Hindusthan National Glass & Industries Limited
The Schedules referred to above form an integral part of Balance Sheet
As per our report of even date
For Lodha & Co. Mukul Somany Sanjay Somany
Chartered Accountants Jt. Managing Director Managing Director
H. K. Verma
Partner Priya Ranjan Ram Raj Soni
Kolkata Company Secretary Chief Financial Officer
June 25, 2008
Consolidated Balance Sheet As at 31st March, 2008Rs in lac
SCHEDULES As at 31.03.2008 As at 31.03.2007
SOURCES OF FUNDS
Shareholders' Funds
Share Capital A 1746.77 1104.35
Reserves and Surplus B 86244.22 22856.86
87990.99 23961.21
Loan Funds
Secured Loans C 28957.70 18182.91
Unsecured Loans D 13127.61 6883.77
42085.31 25066.68
Deferred Tax Liabilities (Net) 1845.04 4589.31
Total 131921.34 53617.20
APPLICATION OF FUNDS
Fixed Assets
Gross Block 127459.54 57306.21
Less : Depreciation 42181.15 23567.02
Net Block E 85278.39 33739.19
Capital Work-In-Progress 4510.60 3652.61
Investments F 11394.50 1023.21
Current Assets, Loans and Advances
Inventories G 17343.27 10165.31
Sundry Debtors H 16456.51 9009.65
Cash and Bank Balances I 1701.48 86.67
Loans and Advances and Other Current Assets J 14059.66 5589.23
49560.92 24850.86
Less:
Current Liabilities and Provisions
Current Liabilities K 14399.63 7200.63
Provisions L 4423.44 2448.04
18823.07 9648.67
Net Current Assets 30737.85 15202.19
Total 131921.34 53617.20
Significant Accounting Policies & Notes on Accounts S
Hindusthan National Glass & Industries Limited | 129
The Schedules referred to above form an integral part of Profit & Loss Account
As per our report of even date
For Lodha & Co. Mukul Somany Sanjay Somany
Chartered Accountants Jt. Managing Director Managing Director
H. K. Verma
Partner Priya Ranjan Ram Raj Soni
Kolkata Company Secretary Chief Financial Officer
June 25, 2008
Consolidated Profit and Loss Account For the year ended 31st March, 2008
SCHEDULES 31.03.2008 31.03.2007
INCOMESales M 115867.01 60543.68 Less : Excise Duty 12954.42 7829.83
102912.59 52713.85 Other Income N 1122.98 657.58 Increase / (Decrease) in Stock O (460.84) (368.43)
103574.73 53003.00 EXPENDITUREMaterials P 30018.52 15443.46 Manufacturing and Other Expenses Q 51908.76 27066.92
81927.28 42510.38 Profit before Depreciation, Interest and Tax 21647.45 10492.62 Depreciation 7371.65 3638.66 Transfered From Revaluation Reserve (281.21) (237.98)
7090.44 3400.68 Interest and Finance Expenses R 2365.07 1942.39
9455.51 5343.07 Profit before Tax 12191.94 5149.55 Less : Provision for Income Tax
- Current Tax 99.01 1531.13 - Minimum Alternate Tax 1367.20- Less: MAT Credit Entitlement 1367.20- Fringe Benefit Tax 38.20 19.25 - Deferred Tax (2683.19) 163.48 - Earlier years (1300.18)
Profit after Tax 16038.10 3435.69 - Concern Share 16038.74 3435.99 - Minority (0.64) (0.30)Add: Balance brought forward from last year 620.23 850.44 Amount Available for Appropriation 16658.97 4286.43 APPROPRIATIONGeneral Reserve 15000.00 3539.98 Interim Dividend on Equity Shares 110.43 Tax (including cess) on Interim Dividend 15.49 Proposed Dividend on Equity Shares 725.11 0.26 Tax(including Cess) on Proposed Dividend 123.24 0.04 Balance carried to the Balance Sheet 810.62 620.23
16658.97 4286.43 Basic and Diluted Earning per Share of Rs 10/- each 91.82 31.11 (Refer Note No.10 of Schedule 'S')Significant Accounting Policies and Notes on Accounts S
Rs in lac
130 | Hindusthan National Glass & Industries Limited
Consolidated Cash Flow Statement For the year ended 31st March, 2008
2007-08 2006-07A CASH FLOW FROM OPERATING ACTIVITIES
Net Profit Before Tax and extraordinary items 12191.94 5,149.55 Adjustments to reconcile profit before tax to cash provided by operating activitiesDepreciation 7090.44 3,400.68 Bad Debts and Provision for Doubtful Debts 239.25 231.28 Interest Expenses (Net) 2,365.07 1,942.39 Dividend Income (0.26) (0.26)Liability no longer required written back (97.38) (104.49)Unrealised Foreign Exchange Loss/(Gain) (Net) – (91.21)Realised Foreign Exchange Loss/(Gain) on Term Loans (Net) – 29.39 Provision for Diminution in Investments 0.17 –Prior Period Income (3.03) –Interest received (132.09) (246.39)Loss / (Profit) on sale of Fixed Assets (Net) 71.56 37.26 Loss / (Profit) on sale of current Investments (Net) (8.15) (4.84)Operating Profit before working capital changes 21,717.52 10,343.36 Changes in current assets and liabilitiesLoans and Advances (4,600.86) (1,727.71)Trade and other Receivables (4,030.18) 376.22 Inventories (537.45) 738.64 Trade and other Payables 3,853.33 346.78 NET CASH GENERATED BY OPERATING ACTIVITIES 16,402.36 10,077.29 Adjustments for :Direct Taxes Paid (149.63) (1,015.20)Refund of Income Tax – 81.87 Interest received on Income Tax Refund – 8.03 Fringe Benefit Tax Paid (38.27) (20.53)NET CASH FROM OPERATING ACTIVITIES 16,214.46 9,131.46
B.CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Fixed Assets (12,927.73) (7,005.82)Sale of Fixed Assets 169.82 512.95 Sale of Long Term Investments 42.93 –Purchase of Long Term Investment (4,367.93) (1,000.00)Purchase of Current Investments (5794.44) (4,380.00)Sale of Current Investments 5802.59 4,384.84 Dividend received 0.26 0.26 Interest received 59.53 281.13 NET CASH USED IN INVESTING ACTIVITIES (17,014.97) (7,206.64)
C.CASH FLOW FROM FINANCING ACTIVITIES:Proceeds/(Repayment) from long term borrowing (Net) 810.38 (1,833.67)Proceeds/(Repayment) from short term borrowings (Net) 3,035.44 1,937.20 Dividend paid including Corporate Dividend Tax – (209.68)Interest paid (2,349.58) (1,915.83)NET CASH FROM FINANCING ACTIVITIES 1,496.24 (2,021.98)NET CHANGES IN CASH AND CASH EQUIVALENTS 695.73 (97.16)OPENING CASH AND CASH EQUIVALENTS 1,005.75 183.83 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 1,701.48 86.67(represents Cash in Hand and Bank balances)
Note:1. The above cash flow Statement has been prepared under the "Indirect Method" as set out in the Accounting Standard 3 (AS-3) - Cash
Flow Statements issued by The Institute of Chartered Accountants of India.2. Previous Years figure's have been regrouped wherever necessary to conform to the Current years
Rs in lac
As per our report of even date
For Lodha & Co. Mukul Somany Sanjay Somany
Chartered Accountants Jt. Managing Director Managing Director
H. K. Verma
Partner Priya Ranjan Ram Raj Soni
Kolkata Company Secretary Chief Financial Officer
June 25, 2008
Hindusthan National Glass & Industries Limited | 131
Schedules forming part of the Consolidated Accounts
Schedule - A I SHARE CAPITAL
31.03.2008 31.03.2007
AUTHORISED5115,00,000 Equity Shares of Rs 10/- each. 51150.00 1150.00(Previous Year 11500000 shares of Rs 10/ each)
51150.00 1150.00ISSUED,SUBSCRIBED AND PAID UP1,10,43,368 Equity shares (Previous Year 1,10,43,368 shares) of Rs 10/- each 1104.34 1104.34 fully paid up of which 58,10,360 Equity Shares of Rs 10/- each were allottedas fully paid up Bonus shares by Capitalisation of General ReserveShare Suspense Account (pending allotment pursuant to the Scheme of Arrangement 642.43 (Refer Note No. 26(d) of Schedule S)Add : Forfeited Shares (Amount Originally paid up @Rs 5/- on 280 Equity Shares) 0.01(Transferred to General Reserve during the year)
1746.77 1104.35
Rs in lac
Schedule - B I RESERVES AND SURPLUS
31.03.2008 31.03.2007
Capital Reserve
As per last Balance Sheet 0.04 0.06
Less: Transfer to General reserve 0.04 0.02 0.04
Capital Reserve on Consolidation 2.90 2.90
Investment Allowance Reserve 0.57 0.57
General Reserve
As per last Balance Sheet 17740.09 14200.09
Add: Adjustment consequent upon amalgamation of erstwhile ACE 31391.22
Glass Container Ltd [Refer Note No. 26(1)(b) of Schedule S]
Add: Transfer from Capital Reserve 0.04 0.02
Add: Transfer from Profit and Loss Account 15000.00 3539.98
Less: Adjustment on account of Transitional provision under 118.63
AS-15 [Refer Note No.17 of Schedule S]
Less: Loss of erstwhile ACE Glass Containers Ltd for the year 3146.66
ended 31.03.2007 [Refer Note No. 26(1)(c)(ii) of Schedule S]
Less: Carrying Cost of shares held in erstwhile Ace 7.55
Glass Containers Ltd. pursuant to the Scheme of Amalgamation
[Refer Note No. 26(1)(c)(i) of Schedule 'S']
Less: Merger expenses and others 83.19
[Refer Note No. 26(iv) of Schedule 'S']
Less: Minority Interest 0.56 60774.76 17740.09
Revaluation Reserve
As per last Balance Sheet 3388.73 4057.21
Add: Revaluation of Land and Buildings 8054.76
[Refer Note No. 7(ii) of Schedule S]
Less: Transfer to Profit and Loss A/c 281.21 237.98
[Refer Note No. 7(iv) of Schedule 'S']
Less: Adjustment on account of Sale / Discard of Assets 60.75 11101.53 430.50 3388.73
132 | Hindusthan National Glass & Industries Limited
Schedule - B I RESERVES AND SURPLUS (Contd.)
31.03.2008 31.03.2007
Share Premium
As per last Balance Sheet 1104.30 1104.30
Add: Adjustment consequent upon amalgamation of erstwhile ACE 12449.54 13553.84 1104.30
Glass Container Ltd (Refer Note No. 26(1)(b) of Schedule S)
Profit and Loss Account
Surplus as per Profit and Loss Account 810.62 620.23
86244.22 22856.86
Rs in lacSchedules forming part of the Consolidated Accounts
Schedule - C I SECURED LOANS
Notes 31.03.2008 31.03.2007
I. Rupee term Loans
From Financial Institution
Export Import Bank of India 1 6327.78 2038.89
From Banks
IDBI Bank Limited 750.00
State Bank of India 2 2432.00 4166.67
The Honkong & Shanghai Banking Corporation Limited 3 4562.50
II. Foreign Currency Loans
From Banks
- State Bank of India
Foreign Currency Term Loan - I 229.00
Foreign Currency Term Loan - II 169.82
The Honkong & Shanghai Banking Corporation Limited PCFC 4 599.16
- ICICI Bank - External Commercial Borrowing 5 2005.50 2158.50
III. Working Capital Borrowing from Banks 6 12709.54 8334.13
IV. Loans under Finance Schemes
From Banks 7 293.05 324.77
From Others 7 7.13 11.13
V. Interest accrued and due 21.04
28957.70 18182.91
Notes:1) The loans are secured by first charge ranking pari-passu with charges created and/or to be created on all immovable properties
by way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.
2) The loans are secured by first charge ranking pari-passu with charges created and/or to be created on all immovable propertiesby way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders. These loans are alsocollaterally secured by second charge on Current Assets of the said plants.
3) This includes term loan of Rs 1562.50 lac taken for Nashik plant and is secured by first charge ranking pari-passu with chargescreated and/or to be created on all immovable properties by way of equitable mortgage and hypothecation of all moveableproperties both present and future of Rishikesh, Pondicherry and Nashik Plants, save and except specific assets exclusivelyhypothecated in favour of respective lenders. Balance Rs 3000 lac are secured by first charge ranking pari-passu with chargescreated and/or to be created on all immovable properties by way of equitable mortgage and hypothecation of all moveableproperties of Neemrana Plant, save and except specific assets exclusively hypothecated in favour of respective lenders.
Hindusthan National Glass & Industries Limited | 133
Schedules forming part of the Consolidated Accounts
Schedule - D I UNSECURED LOANS
Schedule - E I FIXED ASSETS
31.03.2008 31.03.2007
Short Term Loans
From Banks 8555.45 1750.80
Non Convertible Debentures * 3000.00 2000.00
From Others 27.04 1313.10
Others
Interest Free Loans 1000.00
Trade Deposits 100.10 100.10
Deferment Loan 1445.02 719.77
13127.61 6883.77
Note: *
* Represents Mibor linked Non-Convertible Debentures privately placed with - JM Mutual Fund: (Previous year - Canbank Mutual Fund)
4) This loan is secured by hypothecation of inventories (both present and future) and book debts and second charge on allimmoveables, moveable properties including land and building of Rishra, Bahadurgarh and Neemrana plants.
5) This loan is secured by first charge ranking pari-passu with charges created and/or to be created on all immovable properties byway of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.
6) This includes Rs 3893.25 lac secured by hypothecation of inventories (both present and future) and book debts and second chargeon all immoveables, moveable properties including land and building of Rishikesh, Pondicherry and Nashik plants. Rs 214.74 lacis secured by hypothecation of stock of finished goods, semi finished goods, raw materials, stores and spares including packingmaterials, book debts, other current assets, entire plant and machinery and other fixed assets of Glass Equipment (India) Limited.The balance of Rs 8601.55 lac is secured by hypothecation of inventories (both present and future) and book debts and secondcharge on all immoveables, moveable properties including land and building of Rishra, Bahadurgarh and Neemrana plants.
7) Secured by hypothecation of vehicles financed in favour of respective lenders.
Rs in lac
GROSS BLOCK DEPRECIATION NET BLOCK
PARTICULARS Cost at Acquired on Additions Deductions Cost at Upto Acquired on For the Less on Upto As on As on
01.04.07 Amalgamation 31.03.08 01.04.07 Amalgamation Year Sale/ 31.03.08 31.03.08 31.03.07
as on Addition Deductions /
01.04.06 during Adjustments
2006-2007
TANGIBLE
1. Land 1102.50 5908.70 7220.59 14231.79 3.23 2.37 5.60 14226.19 1102.50
2. Buildings 5116.33 5521.71 1.85 2742.77 7.03 13375.63 1385.31 682.91 393.88 1.16 2460.94 10914.69 3731.02
3. Leasehold Buildings 9.18 9.18 0.03 0.15 0.18 9.00 9.15
4. Plant and Machinery 49910.33 37597.55 1314.98 10711.74 1796.35 97738.25 21750.72 11880.86 6796.66 1547.06 38881.18 58857.07 28159.61
5. Furniture and Fixtures 123.18 198.86 14.41 26.92 3.10 360.27 55.34 83.35 15.65 0.77 153.57 206.70 67.84
6. Railway Siding 2.09 2.09 2.09 2.09
7. Office and Other 72.89 248.50 53.64 1.09 373.94 28.27 140.23 26.65 0.26 194.89 179.05 44.62
Equipments
8. Vehicles 930.79 110.04 44.54 289.22 68.00 1306.59 321.43 32.36 123.58 34.66 442.71 863.88 609.36
INTANGIBLE
9. Computer Software 38.92 37.16 26.47 40.75 61.80 23.83 33.73 12.71 30.28 39.99 21.81 15.09
57306.21 49622.52 1375.78 21071.35 1916.32 127459.54 23567.02 12856.67 7371.65 1614.19 42181.15 85278.39 33739.19
Previous Year 54721.23 5074.75 2489.77 57306.21 21437.42 3638.66 1509.06 23567.02 33739.19
134 | Hindusthan National Glass & Industries Limited
Face Value 31.03.2008 31.03.2007
Rs Nos.
(A) Long Term
Trade
Fully Paid-up Equity Shares
Unquoted
Ace Glass Containers Ltd. (PY 149901400 shares) 10 15.10
Capexil Agencies Ltd. 1000 5 0.05 0.05
Ceramic Decorators Ltd. 10 7
HNG Float Glass Ltd. 10 10000 4201.00 1.00
Other than Trade
Unquoted
Units of CAN FMP 13M-SRI (Close Ended) 10 10000000 1000.00 1000.00
Fully Paid up Equity Shares
Hasow Automation Ltd. 10 47100 4.73 4.73
Less: Provision for diminution in Investments 4.73 4.73
The Calcutta Stock Exchange Association Limited 1 8364 167.28
Surendra Khanij Pvt Ltd. 10 12000 1.20 1.20
GOVERNMENT SECURITIES
Unquoted
Deposit With Govt. Authorities @
(a) 12 Years National Savings Certificate 0.01 0.01
(b) 7 Years National Savings Certificate 0.01 0.01
(c) 6 Years National Savings Certificate 6.49 5.84
Beneficial Interest in Shares held in HNG Trust 7.55
(Refer Note No. 26(e) of Schedule 'S')
Beneficial Interest in Shares held in Ace Trust 6009.35
(Refer Note No. 26(f) of Schedule 'S')
(B) Current
Other than Trade
Quoted Shares
Kajaria Ceramics Ltd. 2 5470 1.56
@ Rs 0.42 lac since matured but not encashed 11394.50 1023.21
Aggregate amount of Quoted Investments 1.56
Aggregate amount of Unquoted Investments 11392.94 1023.21
11394.50 1023.21
Note: Market Value of Quoted shares Rs 1.56 lac (Previous Year NIL)
Rs in lac
Schedules forming part of the Consolidated Accounts
Schedule - F I INVESTMENTS
Hindusthan National Glass & Industries Limited | 135
Schedules forming part of the Consolidated Accounts
Schedule - G I INVENTORIES(As taken, valued and certified by the Management)
31.03.2008 31.03.2007
Raw Materials 3299.50 1273.88
Stores,Spare parts,Fuel and Building Materials
(Including in Transit Rs 172.48 lac, Previous Year Rs 146.14 lac) 7189.34 3475.79
Packing Materials 423.81 225.96
Stock in Process 546.37 424.07
Finished Goods 5884.25 4765.61
17343.27 10165.31
Rs in lac
Schedule - H I SUNDRY DEBTORS(Unsecured, considered good unless otherwise stated)
Debts due for a period exceeding six months
Considered good 939.95 670.03
Considered doubtful 991.53 392.80
1931.48 1062.83
Less: Provision for doubtful debts 991.53 392.80
939.95 670.03
Other Debts 15516.56 8339.62
16456.51 9009.65
Schedule - I I CASH AND BANK BALANCES
Cash balance on hand 31.52 19.42
Cheques in hand 1078.26
Balances With Scheduled Banks
in Current Accounts 533.41 52.25
in Fixed Deposit Accounts* 18.25 15.00
in Margin Money Accounts* 40.03
Balances With Post Office in Saving Bank Account 0.01
1701.48 86.67
* (Receipts pledged with the banks and government authorities for Rs 57.18 lac, PY Rs NIL)
136 | Hindusthan National Glass & Industries Limited
Schedule - J I LOANS AND ADVANCES AND OTHER CURRENT ASSETS (Unsecured and Considered good)
31.03.2008 31.03.2007
Loans
To Bodies Corporate 4724.00
(Advances Recoverable in cash or in kind or for value to be received) 2109.63 1117.69
(Net of Doubtful Advances Rs 240.65 lac, Previous Year: Rs NIL)
VAT Credit (Inputs) Account 613.24 393.59
Advance towards equity participation 517.69
Advance Income Tax 3190.26 1672.24
Tax Deducted at Source 175.80 71.54
Advance Fringe Benefit Tax 41.75
MAT Credit Entitlement 1367.57
Deposits and balances with Government Authorities and Other Departments 1586.35 1212.94
Other Deposits 155.10 602.91
13963.70 5588.60
Other Current Assets
Interest Receivable 85.72
Fixed Assets Held for disposal 10.24 0.63
(at lower of net book value or estimated net realisable value)
14059.66 5589.23
Rs in lacSchedules forming part of the Consolidated Accounts
Schedule - K I CURRENT LIABILITIES
Sundry Creditors
Dues to Small scale undertaking(s) 121.66
Dues to Micro, Small & Medium Enterprises 55.68
Others 14121.28 6885.48
Interest accrued but not due on Loans 104.25 88.76
Commission to Directors 118.40 100.00
Unclaimed dividend 0.02 4.73
* This is not due for payment to Investor Education & Protection Fund. 14399.63 7200.63
Schedule - L I PROVISIONS
For Taxation 2445.13 2271.48
For Gratuity and Unavailed Leave 1088.01 175.99
For Fringe Benefit Tax 41.95 0.27
For Proposed Dividend 725.11 0.26
For Tax on Proposed Dividend 123.24 0.04
4423.44 2448.04
Hindusthan National Glass & Industries Limited | 137
Schedule - M I SALES
31.03.2008 31.03.2007
Finished Goods 115000.57 60356.10
Others 703.41 183.77
General Merchandise Sale 163.03 3.81
115867.01 60543.68
Less: Excise Duty 12954.42 7829.83
102912.59 52713.85
Rs in lacSchedules forming part of the Consolidated Accounts
Schedule - N I OTHER INCOME
Hire charges and Lease Rental 24.54 30.09
Dividends On Trade and Long Term Investments 0.26 0.26
Interest received from Banks and Others 72.91 246.39
Rent 34.38 40.57
Insurance Claims 1.98 0.90
Miscellaneous Receipts 483.53 192.46
Liabilities / Provisions no longer required written back 97.38 104.49
Income from derivatives 71.29
Profit on Assets Sold/Discarded 15.46 34.41
Profit on Sale of Current Investment - Other than Trade 8.15 4.84
Foreign Exchange Fluctuations (Net) 310.07 3.17
Prior Period Income 3.03
1122.98 657.58
Schedule - O I INCREASE / (DECREASE) IN STOCK
Closing Stock
Finished Goods 5884.25 4765.61
Work-in-Process 546.37 424.07
6430.62 5189.68
Less :
Opening Stock :
Finished Goods 4765.61
Add: Transfer pursuant to Scheme of Amalgamation 1648.06 6413.67 5054.79
Work-in-Process 424.07
Add: Transfer pursuant to Scheme of Amalgamation 53.72 477.79 503.32
6891.46 5558.11
Increase / (Decrease) (460.84) (368.43)
Schedule - P I MATERIALS
Raw Materials Consumed 29646.93 15347.79
Purchase of Trading Material 371.59 95.67
30018.52 15443.46
138 | Hindusthan National Glass & Industries Limited
Schedule - Q I MANUFACTURING AND OTHER EXPENSES
31.03.2008 31.03.2007
Stores and Spare Parts Consumed 5111.74 3097.61
Power and Fuel 27200.22 13522.48
Packing Material Consumed and Packing Charges 7605.62 3868.28
Salaries,Wages,Bonus and Gratuity, etc 4514.95 2185.78
Contribution to Provident and Other Funds 741.04 280.96
Workmen and Staff Welfare Expenses 439.01 251.92
Rent (Including Lease Rent) 95.43 29.92
Rates and Taxes 58.85 25.16
Repair and Maintenance:-
Building 132.87 30.66
Plant and Machinery 1061.60 663.80
Others 210.98 93.27
Freight outwards, Transport and Other Selling Expenses
(Net of realisation of Rs 983.56 lac, PY Rs 1498.34 lac) 1004.07 855.59
Commission on Sales 116.10 121.29
Cash Discount on Sales 2.18
Insurance 150.22 158.80
Charity and Donation 31.00 4.76
Bad Debts/Advances Written Off 185.81 29.88
Less: Provision for Doubtful Debts / Advances written back 195.92 (10.11) 29.88
Provision for Doubtful Debtors/Advances 249.36 201.40
Miscellaneous Expenses 2476.12 954.03
Excise Duty on Stock (28.93) 335.00
Director's Remuneration 280.43 231.52
Washing and Grinding Charges 67.06 50.96
Provision For Loss on Derivative Transaction 313.94
Loss on sale and discard of fixed assets 87.02 71.67
Provision for diminution in investments 0.17
51908.76 27066.92
Rs in lacSchedules forming part of the Consolidated Accounts
Schedule - R I INTEREST AND FINANCE EXPENSES
On Debentures 569.50 515.91
On Term Loans 1510.40 1062.54
Bank and Others 153.39 241.97
Finance Expenses 131.78 121.97
2365.07 1942.39
Hindusthan National Glass & Industries Limited | 139
Schedule - S I NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT OF THE COMPANY AND ITS SUBSIDIARIES.
Schedules forming part of the Consolidated Accounts
1. Principle of Consolidation
a. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standard 21 (AS 21) on
“Consolidated Financial Statements” and Accounting Standard 23 (AS 23) on "Accounting for Investments in Associates in
Consolidated Financial Statements" issued by The Institute of Chartered Accountants of India.
a. The Subsidiaries (which along with Hindusthan National Glass & Industries Ltd., the holding company, constitute the group)
have been considered in the preparation of these consolidated financial statements are:
d. Consolidation Procedures
For preparation of consolidated financial statements, the financial statements of the Company and its subsidiaries have been
combined on a line - by - line basis by adding together like items of assets, liabilities, income and expenditures, after eliminating
intra - group balances and transactions and the resulting unrealised profit or losses.
e. Other Significant Accounting Policies
These are set out in the "Significant Accounting Policies and Notes on Accounts" of the Company and its subsidiaries.
Name of Subsidiary Percentage of voting power either
directly or through subsidiaries as at
31.03.2008 31.03.2007
Glass Equipment (India) Ltd. 100.00 100.00
Quality Minerals Ltd. 99.73 99.73
Percentage of voting power held as at
31.03.2008 31.03.2007
c. Investments in Associates:
ACE Glass Containers Limited. (since amalgamated with the Company) – 50.00
2 Contingent Liabilities not provided for (Rs In Lac)
As at As at
31st March 2008 31st March 2007
a) Outstanding Bank Guarantees / Letter of Credits 1384.86 1006.31
b) Income Tax demand under appeal/dispute 9.28 7.23
c) Sales Tax matter under Appeals 214.25 –
d) Excise Duty demand/Show cause notices issued against which the Company 1703.25 349.11
has preferred appeals / replies and which in the opinion of the management
is not tenable.
e) Cases pending with Labour Courts (to the extent ascertainable) 549.60 0.01
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 appeal in the Supreme Court against the Order of the High Court.
g) Amount of duty against Export obligation in respect of exemption 4.32 74.48
availed against Advance Licence Scheme.
h) Other Claims against the Company not acknowledged as debt. 26.10 26.40
140 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
2007-2008 2006-2007
3. Capital Commitments 1222.37 1369.12
(Net of Advances of Rs 362.51 lac, Previous year Rs 248.65 lac)
4. Capital Work -in-Progress includes pre-operative expenses pending allocation: -
i) Salary and Wages 23.99 1.13
ii) Power & Fuel 23.02 8.03
iii) Miscellaneous Expenses 31.21 0.22
iv) Interest on Term Loan 239.25 121.82
Add Brought Forward from previous year 163.97 32.77
Total carried forward 481.44 163.97
Rs in lac
(Rs In Lac)
As at As at
31st March 2008 31st March 2007
i) In respect of a derivative transaction with Kotak Mahindra Bank Ltd.(the bank) 404.18 Nil
the Company has challenged its validity and legality. The matter is sub-judice.
Based on the legal advice, the contract is void and not tenable.The loss in
respect of above on mark to market basis is indeterminable. The claims
raised (periodic) by the bank is for Rs 404.18 lac.
j) Corporate Guarantee to bank/ government authorities given on behalf of 3235.00 5735.00
Somany Foam Limited. (P.Y. Rs 3235 lac on behalf of Somany Foam
Limited and Rs 2500 lac on behalf of an Associate Company).
k) In respect of Neemrana plant a notice has been received from civil court filed
by creditors of Haryana Sheet Glass Ltd. demanding their outstanding
payments and stating that plant cannot be transferred unless their dues are
paid.However the matter is sub-judice.
l) Counter Guarantee furnished to Government and other authorities on behalf
of following companies:
(i) SPL Ltd. NIL 12.00
(ii) Glass Equipment (India) Ltd. (Subsidiary Company) 381.00 381.00
m) Surety given to Sales Tax department. 50.75 50.75
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 b) to k) is dependent upon the outcome of final judgements / decisions.
5. During the year the Company has acquired all the Fixed Assets and Inventories (excepting finished goods) of glass unit situated
at Neemrana of Haryana Sheet Glass Limited for a total consideration of Rs 2500 lac. Allocation of cost on Plant and Machinery
has been carried out on the basis of the value determined by the approved valuer, Land and Buildings on the basis of the
consideration paid and Inventories as estimated by the management.
6. In respect of Fixed Assets acquired from Larsen &Toubro Limited by the erstwhile Ace Glass Containers Limited, under the Business
Transfer Agreement, which are estimated to have lower residual lives than that envisaged as per the rates provided in Schedule
XIV of the Companies Act 1956, depreciation has been provided based on the estimated shorter residual lives as follows:
Hindusthan National Glass & Industries Limited | 141
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
2007-2008 2006-2007
8. Payment to Statutory Auditors:*
i) Audit Fees 9.38 3.38
ii) Tax Audit fees 1.60 1.30
iii) Management Services and Certification work 2.00 1.75
iv) Reimbursement of Expenses 0.73 0.52
* excluding Service Tax
Rs in lac
Rates as prescribed by Rates of
Particulars of Fixed Assets Schedule XIV to the Depreciation on
Companies Act, 1956 assets applied
Buildings (other than factory buildings) 3.34 5.21
Factory Buildings 1.63 2.04
Plant and Machinery
Used for single shift operations 4.75 11.44
Continuous Process Plant 5.28 11.44
Used for Triple Shift operations 10.34 11.44
Direct Fire Glass Melting Furnace working on Triple Shift Operations 16.21 16.21
Furniture & Fixtures 6.33 17.37
Vehicles 9.50 9.50
Computers 16.21 17.95
These assets originally acquired by the erstwhile Ace Glass Containers Limited
(AGCL) and vested to the Company pursuant to the Scheme of Amalgamation.
The practice of charging depreciation on these assets is consistently followed.
7. (i) Land and Buildings of Rishra and Bahadurgarh unit were revalued by an 3337.19 3337.19
approved valuer on 1.4.92 on current replacement cost basis. Accordingly,
net amount transferred to Revaluation Reserve Account.
(ii) During the year Land and Buildings of Rishra and Bahadurgarh unit were 7554.80 NIL
revalued by an approved valuer on 31.03.06 on current replacement cost
basis. Accordingly, net amount transferred to Revaluation Reserve Account.
(iii) Plant and Machinery of Rishra and Bahadurgarh unit were revalued by an 4831.31 4831.31
approved valuer on 1.4.95 on current replacement cost basis. Accordingly,
net amount transferred to Revaluation Reserve Account.
(iv) Plant and Machinery of GEIL unit were revalued by an approved valuer 499.96 Nil
on 01.04.2007 on current replacement cost basis. Accordingly,
net amount transferred to Revaluation Reserve Account.
(v) Depreciation transferred from Revaluation Reserve Account to 281.21* 237.98
Profit and Loss Account.
* Include Rs 116.43 lac for the year ended 31.03.2007
142 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
2007-2008 2006-2007
9. Sundry Creditors include Acceptances 392.14 NIL
10. Earning per share
Profit after Tax 16038.10 3435.69
Number of shares outstanding 17467713 11043368
Earning per share (Basic and Diluted) 91.82 31.11
11. Financial and Derivative Instruments
a) The Company has entered into certain currency swap transaction, the cash flows
arising there from are recognised in the books of accounts as and when the
settlements takes place in accordance with the terms of the respective contracts
over the tenure thereof. All derivative and financial instruments acquired by the
Company are for hedging purpose only.However, in pursuance of announcement
dated March 29, 2008 of The Institute of Chartered Accountants of India on
"Accounting for Derivatives" loss on account of derivative transaction as on
March 31, 2008 stood at Rs 313.94 lac as estimated by the management, arising
from hedging transaction undertaken by the Company has been provided for.
b) Outstanding particulars of derivative instruments ( CY: One deal with regard 3993.25 1755.48
to option trade in US $ 4 million, Two deals with regard to Currency Swap in
CHF 5.93 million; PY: One deal with regard to Currency swaps in US$ 2 million,
One deal with regard to option in EURO 1.5 million)
c) Foreign currency exposure outstanding as on March 31, 2008 which has not
been hedged by the derivative instruments
Loans (CY: US $ 23.18 million; PY: US$ 16.92 million ) 9297.11 7372.02
Creditors (CY: US $ 3.47 million, EURO 0.58 million, GBP 0.20 million, 1779.73 1368.24
AUD 0.002 million; PY: US $ 1.97 million , EURO 0.88 million)
Debtors (CY: US $ 1.51 million; PY: US $ 0.32 million) 1069.01 137.92
d) Net Gain / (Loss ) on account of exchange difference adjusted to the carrying Nil 54.80
amount of fixed assets / capital work -in -progress.
e) The amount of Exchange Gain / ( Loss) on foreign currency transaction 310.07 3.17
adjusted to respective heads of accounts of the Profit and Loss Account.
12. a) Electricity duty waiver benefit under West Bengal Incentive Scheme 2004 and Nil 30.52
subsidy received under The West Bengal Incentive to Power Intensive
Industries Scheme 2005 has been credited to Power & Fuel Account.
b) Amount included in VAT Credit Inputs Account shown under Loans and 411.40 301.01
Advances can be utilised only after repayment of corresponding amount of
Sales Tax Deferred Loan.
Rs in lac
Hindusthan National Glass & Industries Limited | 143
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
14. Disclosure pursuant to clause 32 of the Listing Agreement
Outstanding Maximum balance
as on 31.03.2008 outstanding
during the year
1) No interest or interest below the rates specified in section 372 A 23.88 23.88
of the Companies Act, 1956*
2) Repayment beyond seven years or no repayment schedule Nil Nil
3) Repayment on Demand 4500.00 4528.84
4) Loan to Associate Nil Nil
5) Investment by Associates Nil Nil
* Notes:
1. Pertains to advance to various employees pursuant to general business practice and employees welfare.
2. Interest free advances in the nature of loans and advances given to employees as per general rules of the Company have not
been considered.
13. i) The breakup of deferred tax assets and deferred tax liabilities is as given below : (Rs in lac)
Opening as on (Charge)/ Credit Closing as at
01.04.2007 during the year 31.03.2008
Deferred Tax Assets
Business Losses and Unabsorbed Depreciation 1956.04 1956.04
Expenses Allowable on Payment basis 186.00 668.88 854.88
Difference in valuation of inventories 21.74 9.79 31.53
Total Deferred Tax Assets 207.74 2634.71 2842.45
Deferred Tax Liabilities
Depreciation and related items 4797.06 (109.60) 4687.46
Total Deferred Tax Liabilities 4797.06 (109.60) 4687.46
Net Deferred Tax Assets / (Liabilities) (4589.32) 2744.31 (1845.01)
ii) During the year the Company has provided Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and
accordingly, based on evidences MAT Credit of Rs 1367.57 has been recognised in these accounts.
15. Investment by the loanee in the shares of the Company:
None of the loanees have, per se, made investments in shares of the Company. The investments represent share of the
Company held by these companies prior to the loans granted to these companies.
Name of the Company No. of Shares Loans (Rs lac)
1) Noble Enclave and Towers Pvt. Ltd. 1533544 1800.00
2) Topaz Commerce Ltd. 1299816 1800.00
144 | Hindusthan National Glass & Industries Limited
16. During the Year, the Company has incurred Rs 7.91 lac (previous year Rs 3.20 lac on account of Research and Development
expenses, which has been charged to Profit and Loss Account.
17. As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard
are given below:
i. Effective 1.4.2007, the Company has adopted revised Accounting Standard 15 on “Employee Benefits” notified in the
Companies (Accounting Standards) Rules, 2006. The effect of transitional liability of Rs 78.23 lac (net of tax of Rs 40.28 lac)
on account of gratuity and Rs 40.40 lac (net of tax of Rs 20.80 lac) on account of leave pay as required by AS-15 has been
adjusted to opening balance of General Reserve of the Company.
ii. The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards)
Rules, 2006, are given below:
Defined Contribution Scheme
Contribution to Defined Contribution Plan, recognised for the year are as under: (Rs in Lac)
Employer’s Contribution to Provident Fund 158.31
Employer’s Contribution to Pension Fund 212.65
Employer’s Contribution to Superannuation Fund 14.89
The guidance on implementing Accounting Standard (AS-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 aforesaid 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 Birla Sun Life Insurance 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 obligation for leave encashment is recognised in the same manner as gratuity.
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
I. Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances
thereof are as follows: (Rs in lac)
Gratuity Gratuity Leave Encashment
Funded Unfunded Unfunded
Liability at beginning of the year 613.63 588.57 153.56
Current Service Cost 52.45 52.57 31.27
Interest Cost 49.86 52.62 59.65
Actuarial (Gain) / Loss 48.40 59.43 (2.48)
Benefits paid 54.27 26.31 38.52
Liability at the end of the year 710.07 726.88 203.48
Hindusthan National Glass & Industries Limited | 145
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
IV. Balance Sheet reconciliation (Rs in lac)
Gratuity Gratuity Leave Encashment
Funded Unfunded Unfunded
Opening Net Liability (11.84) 588.57 150.97
Expenses as above 86.34 164.62 86.21
Employers Contribution 49.36 26.31 36.94
Amount Recognised in Balance Sheet 25.14 726.88 200.24
V. Compensated Absences
The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the
Company as at March 31, 2008 is Rs 203.48 lac.
VI. Principal Actuarial assumptions at the Balance Sheet Date (Rs in lac)
Gratuity Gratuity Leave Encashment
Funded Unfunded Unfunded
Mortality Table LICI 1994-1996 LICI 1994-1996 LICI 1994-1996
Discount rate (per annum) 8.50% 7.50% 8.50 % / 7.50 %
Expected rate of return on plan assets (per annum) 8.00% 8.00% Nil
Rate of escalation in salary (per annum) Nil 5.00% 5.00%
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 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 2008-09 is yet to be determined.
III. Expense recognised in the Income statement (Under the head “Contribution to provident and other funds” – Refer Schedule Q)
(Rs in lac)
Gratuity Gratuity Leave Encashment
Funded Unfunded Unfunded
Current Service Cost 52.45 52.57 31.27
Interest Cost 49.86 52.62 59.65
Expected Return on plan assets 50.04 Nil Nil
Net Actuarial (Gain) / Loss to be recognised 34.07 59.43 (2.48)
Expenses recognised in Profit and Loss account 86.34 164.62 88.44
II. Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:
(Rs in lac)
Gratuity (Funded)
Fair value of plan assets at the beginning of the year 625.48
Expected return on plan assets 50.04
Actuarial Gain / (Loss) 14.33
Employer contribution 49.36
Benefits paid 54.27
Fait value of plan assets at the end of the year 684.94
Total Actuarial Gain / (Loss) to be recognised
146 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
18. The accounts of some of the customers are pending reconciliation / confirmation and the same have been taken as per the
balances appearing in the books. A provision of Rs 991.53 Lac 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.
19. In the opinion of the Management/Board of Directors, the “Current Assets, Loans and Advances” have a value on realisation in
the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.
20. Loan to Bodies Corporate include Rs 4500 lac with Companies in which directors of the Company are interested as members/
directors. These loans were given by the erstwhile AGCL and none of the directors of the Company was director in the erstwhile
AGCL and accordingly, as advised legally, the provisions of section 295 of the Companies Act, 1956 are not applicable with regard
to these loans.
21. Export benefits, Insurance and other claims have been accounted for on accrual basis on acceptance / ascertainment of amount
thereof .Profit or loss on sale of raw materials and stores has been adjusted in consumption.
22. Stores and Spare Parts consumption includes materials consumed for repairs and replacement
23. Stores and Spare Parts also includes items, which are lying since earlier years. A provision of Rs 618.03 lac towards obsolescence
is carried in the books and management is of the opinion that the same is adequate and no further provision is required there
against.
24. Related Party disclosure as identified by the management in accordance with the Accounting Standard 18 (AS 18) of Companies
(Accounting Standards) Rules, 2006.
(i) Associates
- Ace Glass Containers Limited (since amalgamated with the Company)
(ii) Directors and Relatives
- Mr C. K. Somany – (key management personnel)
- Mr Sanjay Somany – (key management personnel)
- Mr Mukul Somany – (key management personnel)
- Mrs Amita Somany – (key management personnel)
- Mr Bharat Somany - Management Trainee ( Relative of Key Management Personnel)
(iii) Enterprises over which any person described in (ii) above is able to exercise significant influence:
Ceramic Decorators Limited
HNG Float Glass Limited
Hasow Automation Limited
Microwave Merchants Private Limited
Mould Equipment
Noble Enclave & Towers Private Limited
Rungamattee Trexim Private Limited
Somany Foam Limited
Spotme Tracon Private Limited
Segment Mercantile Pvt. Limited
Topaz Commerce Limited
Hindusthan National Glass & Industries Limited | 147
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
Disclosure of transaction between the Group and Related parties and status of outstanding balances as on 31st March, 2008
(Rs in lac)
Current Year Previous year
Associates Directors Entities over Associates Directors Entities over
and their which Directors and their which Directors
relatives and their relatives relatives and their relatives
have influence have influence
24(i) 24(ii) 24(iii) 24(i) 24(ii) 24(iii)
Income
Sales of Goods 559.85 0.02
Sales of Investments
Sales of Fixed Assets 1.05 59.79
Rent Received 13.20 9.60
Interest Received 47.27 59.18 57.39
Services 1.53
Expenses
Purchases 25.59 139.67 70.64
Purchase of Assets 1.33 2.94
Services 301.14 158.69 243.31
Remuneration 271.27 225.38
Sitting Fees 0.01 0.02
Interest Paid 9.84
Investments 4.73 4.73
Borrowings and Lendings
Lendings 4500.00 5514.00 516.51
Borrowings 64.00
Trade Deposit
Guarantee / Corporate Guarantee
Given 3235.75 2500.00 3235.75
Taken
Outstandings
Receivables 4528.88 138.54 517.69
Payables 83.66 4.42 1146.43
25. a) The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Block 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 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 There is no escalation clause
in the lease agreement for vehicles.:
(Rs in lac)
Particulars Lease payments Present value
Not later than one year 18.36 16.39
Later than one year and not later than five year 19.99 63.60
Later than five year 45.24 1.74
148 | Hindusthan National Glass & Industries Limited
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.
26. Amalgamation of Ace Glass Containers Limited
(i) Pursuant to Scheme of Amalgamation and reorganisation of capital (the Scheme) under Section 391 to 394 of the Companies
Act 1956, with effect from 1st April 2006 (the Appointed Date), Ace Glass Containers Limited (AGCL) has been merged with
the Company. The erstwhile AGCL is engaged in manufacturing and selling of container glass.
The Scheme was sanctioned by the Hon’ble High Court at Calcutta vide its Order dated 07.04.2008 and by the Hon’ble High
Court at Delhi vide its Order dated 19.03.2008. The Scheme became effective on 28 April 2008.
The amalgamation has been accounted for under the purchase method as prescribed by Accounting Standard 14 on “
Accounting for Amalgamation” as notified by Companies (Accounting Standards) Rules, 2006. Pursuant to the Scheme:
a) The assets, liabilities, rights and obligations of erstwhile AGCL have been vested with the Company with effect from 1st
April 2006. All assets and liabilities (other than fixed assets and investments) of erstwhile AGCL have been recorded at their
respective values as appearing in the books of the erstwhile AGCL as on 31.03.2006. All fixed assets and investments of
the erstwhile AGCL have been recorded at their fair values as of the appointed date..
c) (i) Out of 149901400 Equity Shares held in erstwhile AGCL 74950700 equity shares were cancelled as provided in the
Scheme and carrying cost of such shares amounting to Rs 7.55 lac has been adjusted against the General Reserve
of the Company.
(ii) The erstwhile AGCL had carried on all its businesses and activities for the benefit of and in trust for, the Company from
1st April 2006. Thus the Profit or Income accruing or arising to erstwhile AGCL or expenditure or losses arising or
incurred by it from 1st April 2006 are treated as expenditure or loss, as the case may be of the Company.
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
b) Following adjustments have been carried out in respect of assets and liabilities of erstwhile AGCL
Particulars Rs in lac Rs in lac
Assets (other than Fixed Assets and Investments) taken over at book value 45073.95
Fixed Assets and Investments taken at Fair Value 41415.13
Total Assets as recorded in the books of the Company 86489.08
Less : Book value of Liabilities as on 31.03.2006 23074.66
Excess of Assets over liabilities taken over by the Company (a) 63414.42
Debit Balance in Profit and Loss Account as on 31.03.2006 23977.55
Less : Capital Reserve 5046.30
Balance of Loss adjusted from (a) above (b) 18931.25
Net Balance after adjustment as above (a - b) 44483.17
Less:
Issue of Equity Shares (Share Suspense Account) 642.43
Securities Premium Account vested 12449.54 13091.97
Balance transferred to General Reserve of the Company 31391.21
Hindusthan National Glass & Industries Limited | 149
The losses of the erstwhile AGCL for the year ended 31st March 2007 have been deducted from the General Reserve of
the Company. Current year’s transactions of the erstwhile AGCL have duly been incorporated in the current year under the
respective heads of accounts of the Company.
d) 6424345 number of Equity Shares of Rs 10 each of the Company relating to the Equity Share Capital of the erstwhile AGCL
as on 01.04.2006 have been issued 1 (one) equity share as fully paid up against 35 fully paid Equity Shares held by the
members of the erstwhile AGCL. The face value of such shares issued subsequent to the Balance Sheet Date have been
shown as “ Share Capital Suspense” .
e) 2141448 numbers of Equity Shares to be issued by the Company in lieu of 74950700 number of Shares held by the Company
in the erstwhile AGCL, will be transferred to a trust for the sole benefit of the Company. Accordingly, the cost of the aforesaid
investments of the Company has been included in “ Beneficial Interest in Shares held by HNG Trust" under Investments..
f) (i) 1368872 numbers of Shares of the Company held by the erstwhile AGCL have been transferred to a trust for the sole
benefit of the Company. Accordingly, Rs 6009.35 lac being the fair value of the aforesaid shares have been included in
“Beneficial Interest in shares held by Ace Trust ' under Investments.”
(ii) Pursuant to the sanctioned scheme Rs 31391.21 lac has been transferred to General Reserve. The said amount as per
generally accepted accounting practices would otherwise had been added to the Capital Reserve.
(iii) In view of the aforesaid amalgamation with effect from 01.04.2006, the figures for the previous year are not comparable
with figures for the Current Year.
(iv) In terms of the Scheme, Rs 83.19 lac being expenses attributable to the implementation of the Scheme incurred by the
Company have been adjusted against the General Reserve of the Company.
27. a) Segments have been identified by the Company in line with the Accounting Standard on Segment Reporting (AS-17), taking
into account the organisational structure as well as the different risk and returns of these segments. Details of these segments
are as below:
Glass Container - Manufacturing and selling of Glass Bottles and Tumblers.
Glass Machines - Manufacturing and selling of Glass Forming Machines, Spares and providing related services.
Minerals - Purchase, Processing and sale of Silica Sand and Feldspar.
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
Current year
(Previous year) Rs in lac
Reportable Segments Glass Glass Minerals Eliminations Total
Containers Machines
I REVENUE
External Sales/services 102129.69 782.90 102912.59
(51886.09) (768.50) (59.26) (52713.85)
Inter-segment sales/services 1008.03 237.06 (1245.09)
(419.36) (115.19) (-534.55)
Total Revenue 102129.69 1790.93 237.06 102912.59
(51886.09) (1187.86) (174.45) (-534.55) (52713.85)
150 | Hindusthan National Glass & Industries Limited
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
Current year
(Previous year) Rs in lac
Reportable Segments Glass Glass Minerals Eliminations Total
Containers Machines
II RESULTSegment result 13924.75 228.15 9.14 (164.83) 13997.21
(6697.53) (49.58) (10.01) (-47.20) (6709.92)Other expenses net of unallocable income (486.90)
(-135.63)Operating profit 14484.11
(6845.55)Interest expenses (2371.90)
(-1949.22)Interest income 79.74
(253.22)Profit from ordinary activities 12191.95
(5149.55)Net profit 12191.95
(5149.55)Income Tax-Current (167.47)
(-1531.13)Income Tax-Deferred 2683.19
(-163.48)Income Tax-FIT (38.20)
(-19.25)Mat Credit 1367.57
–Profit after tax 16037.04
(3435.69)III OTHER INFORMATION
Segment assets 132447.86 1862.47 101.37 (1100.24) 133311.46(57469.59) (1883.25) (124.39) (-307.85) (59169.38)
Unallocated corporate assets (130.20) 16388.36(-135.82) (4096.49)
Total assets 149699.82(63265.87)
Segment liabilities 54086.50 896.13 49.46 (715.29) 54316.80(26728.44) (531.92) (24.42) (-87.88) (27196.90)
Unallocated corporate liabilities (65.00) 8436.62(-70.29) (12107.76)
Total liabilities 62753.42(39304.66)
Capital expenditure 20659.67 539.93 (128.25) 21071.35(8696.38) (65.40) (-34.42) (8727.36)
Depreciation 7012.76 84.11 0.20 (6.63) 7090.44(3312.45) (88.01) (0.22) (3400.68)
Hindusthan National Glass & Industries Limited | 151
Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Consolidated Accounts
b) Secondary Segment Reporting (by geographic segment)
The following table shows the distribution of the Company’s Consolidated Sales by geographical market, regardless of
where the goods were produced:
Sales Revenue by Geographical Market (Rs in lac)
Particulars 2007-2008 2006-2007
Domestic Market 110666.67 58841.36
Overseas Market 4333.90 1874.52
Total 115000.57 60715.88
Sundry Debtors: The following table shows the distribution of the Company’s Consolidated debtors by geographical
Market: (Rs in lac)
Particulars 2007-2008 2006-2007
Domestic Market 15883.18 8826.19
Overseas Market 573.33 183.46
Total 16456.51 9009.65
28. Figures are expressed in Rupees lac and have been rounded off to the nearest thousand.
29. Previous Year's figures have been re-grouped and/or re-arranged wherever considered necessary to conform to the current year's
classification.
As per our report of even date
For Lodha & Co. Mukul Somany Sanjay Somany
Chartered Accountants Jt. Managing Director Managing Director
H. K. Verma
Partner Priya Ranjan Ram Raj Soni
Kolkata Company Secretary Chief Financial Officer
June 25, 2008
152 | Hindusthan National Glass & Industries Limited
Corporate Information
ChairmanC. K. Somany
Managing Director Sanjay Somany
Jt. Managing Director Mukul Somany
Directors Kishore Bhimani
Sujit Bhattacharya
R. K. Daga
Dipankar Chatterji
S. K. Bangur
Supriya Gupta
I.K. Saha (Dr.)
Chief Financial OfficerR. R. Soni
Company Secretary Priya Ranjan
AuditorsLodha & Co., Chartered Accountants
Registered office 2, Red Cross Place
Kolkata 700 001
WorksRishra
Bahadurgarh
Rishikesh
Pondicherry
Nashik
Neemrana
Banks/Financial InstitutionsState Bank of India
HDFC Bank Limited
The Hongkong & Shanghai Banking Corporation Limited
ICICI Bank Limited
Export Import Bank of India
ABN Amro Bank N.V.
Yes Bank
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