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Hindusthan National Glass & Industries Limited 63rd Annual Report 2008-09
Hindusthan National Glass & Industries Limited 2, Red Cross Place, Kolkata – 700001
www.hngindia.com
A PRODUCTinfo@trisyscom.com
Across the pages
Corporate identity 04 How we progressed in 2008-09 08 Growth of our numbers 10Chairman’s thoughts 12 Management statement 20 Corporate responsibility and sustainability 22Directors’ Report 24 Management Discussion and Analysis 32 Report on Corporate Governance 40Auditors’ Report 51 Balance Sheet 54 Profit and Loss Account 55 Cash Flow Statement 56Schedules and Notes 57 Balance Sheet Abstract 77 Section 212 78 Subsidiary Accounts 79Consolidated Accounts 115
This document contains statements about expected future events and
financial and operating results of Hindusthan National Glass & Industries
Limited, which are forward-looking. By their nature, forward-looking
statements require the Company to make assumptions and are subject
to inherent risks and uncertainties. There is significant risk that the
assumptions, predictions and other forward-looking statements will not
prove to be accurate. Readers are cautioned not to place undue reliance
on forward-looking statements as a number of factors could cause
assumptions, actual future results and events to differ materially from
those expressed in the forward-looking statements. Accordingly this
document is subject to the disclaimer and qualified in its entirety by the
assumptions, qualifications and risk factors referred to in the
Management’s Discussion and Analysis Statement of the Annual Report,
2008-09 of Hindusthan National Glass & Industries Limited.
Disclaimer
Corporate information ChairmanC. K. Somany
Managing Director Sanjay Somany
Joint Managing Director Mukul Somany
Executive Director R. R. Soni
Directors Kishore Bhimani
Sujit Bhattacharya
R. K. Daga
Dipankar Chatterji
S. K. Bangur
I. K. Saha (Dr.)
Late Supriya Gupta (upto February 7, 2009)
Chief Financial OfficerNirmal Khanna
Company Secretary Priya Ranjan
AuditorsLodha & Co., Chartered Accountants
Registered office 2, Red Cross Place
Kolkata – 700 001
Phone: 033 2254 3100
Registrar & Share Transfer AgentMaheshwari Datamatics Pvt. Ltd
6, Mangoe Lane (Surendra Mohan Ghosh Sarani)
Second floor, Kolkata – 700 001
WorksRishra
Bahadurgarh
Rishikesh
Puducherry
Nashik
Neemrana
Banks/Financial institutionsState Bank of India
HDFC Bank Limited
The Hongkong & Shanghai Banking Corporation Limited
ICICI Bank Limited
Bank of Baroda
State Bank of Hyderabad
Export Import Bank of India
Life Insurance Corporation of India
Each time our customers are
REPLENISHED.Each time our consumers are
REFRESHED.Each time our employees are
REJUVENATED.Each time our suppliers are
REVITALISED.Each time our shareholders are
REASSURED.
2 | Hindusthan National Glass & Industries Limited
Each time someone turns to… A cola bottle for a drink. A jam bottle for a serving. A medicine bottle for a dose. A champagne bottle for a toast. A health supplement bottle for a dollop.
For being protected by a product designed andmanufactured by HindusthanNational Glass & Industries Limited.The bottle.
4 | Hindusthan National Glass & Industries Limited
A status reflected in its Indian market share of about 65 percent.
A respect reflected in a number of multinational and domestic
customers.
A customer orientation reflected in a sectoral coverage of the
food, pharmaceuticals, liquor, beer and beverage industries.
A robustness of business model reflected in a post-tax profit in
a challenging 2008-09.
HNG is India’s largest containerglass packaging solutionprovider (and among the world’sfastest growing).
6 | Hindusthan National Glass & Industries Limited
VisionTo create a world-class glass
manufacturing plant that pursues
quality, cost reduction and
productivity improvement measures 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 its
systems, processes and results.
PotentialThe world’s population of 6.60 billion
is expected to cross 8 billion in 12
years.
Two things will result.
One, a billion people will graduate to
the robustly consuming middle-class.
Two, urban migration will increase to
nearly 900 million.
The result: An enhanced market of
bottled products.
At HNG, we are preparing for this
growing market through proactive
investments in capacity, portfolio,
presence and efficiency.
Enhancing value for consumers,
community and the country.
IdentityThe HNG Group was promoted by the
Kolkata-based Somany family in 1952
following the commissioning of
India’s first fully-automated glass
manufacturing plant at Rishra (near
Kolkata).
The Company is now the undisputed
leader in India’s container glass
industry with about 65 percent
market share and several global
multinationals among its brand-
enhancing customers.
SpreadThe Company’s pan-India
manufacturing operations are spread
over Rishra, Bahadurgarh, Rishikesh,
Puducherry, Nashik and Neemrana; its
headquarter is located in Kolkata. Its
products are also available in more
than 20 countries.
Asset quality The Company possesses an
operational capacity of 11 furnaces
and 43 production lines with fully-
automated IS machines, sourced
from respected global centres of glass
manufacturers like Europe
and the US.
This asset versatility translated into a
container glass portfolio ranging from
5 ml to 3,200 ml on the one hand
and diverse colours (amber, flint and
green) on the other.
Hindusthan National Glass & Industries Limited | 7
Plant location Installed capacity (MT per day)
Rishra, West Bengal 740
Bahadurgarh, Haryana 655
Nashik, Maharashtra 320
Rishikesh, Uttarakhand 356
Neemrana, Rajasthan 180
Puducherry 290
CertificationsThe Company’s ISO 9000:2000 quality certification resulted in
a dependable product and process consistency. Besides, it is
pursuing ISO 14000/18000/22000 certifications for
comprehensive environmental compliance.
ListingOur shares are listed on the National Stock Exchange, the
Bombay Stock Exchange and the Calcutta Stock Exchange. Our
Company enjoyed a Rs. 724.91 cr market capitalisation as on
March 31, 2009.
Global partnersBatch houses from Zippe (Germany); furnaces from Sorg and
Horn (Germany); Forehearths from Emhart (USA) and PSR
(UK); IS machine control system from Botterro (Italy) and
Futronics (UK); bottle transfer machines from Sheppee (UK)
and Pennekamp (Germany); annealing lehrs from Pennekamp
(Germany) and Carmet (USA); laboratory inspection machinery
from AGR (USA) and bottle printing equipment from Strutz
(USA) and Rosario (the Netherlands).
Key financial metrics* Rs. 1,344.19 cr Rs. 235.91 cr Rs. 107.75 cr
Total income Operating profit Post tax profit
11.68 percent Rs. 475.97 Rs. 5ROCE (average) Book value Proposed dividend
per share per share
*Figures pertaining to 2008-09
CustomersHindustan Unilever, GlaxoSmithKline, Nestle, Koeleman,
Global Green, Heinz and Dabur (foods); Pfizer, Cipla,
GlaxoSmithKline, Reckitt Benckiser, Ranbaxy and Himalaya
(pharmaceuticals); United Breweries, SABMiller, Asia Pacific
Breweries and South Asia Breweries (beer); United Spirits,
Pernod Ricard, Diageo, Radico and Bacardi (liquor) and Coca
Cola and Pepsi (soft drinks).
RANBAXYLABORATORIES LIMITED
8
In the plants Undertook process improvements by upgrading
technology to narrow-neck-press-and-blow (NNPB)
technology to reduce production costs and wastages
on the one hand and strengthen capacity utilisation
on the other
Deployed ERP and SAP to reduce costs and minimise
disruptions in operations
Developed CAD/CAM facilities to design a variety of
bottles in different sizes, customised to the precise
requirements of pharmaceutical, processed foods,
liquor and soft drink industries
In the marketplace Enlisted customers like InBev, Carlsberg and John
Distilleries, among others
Strengthened average realisations through
reengineering and superior service
In the numbers Turnover increased 25.28 percent from
Rs. 1,148.34 cr in 2007-08 to Rs. 1,438.60 cr
Net sales escalated 28.37 percent from
Rs. 1,021.30 cr in 2007-08 to Rs. 1,311.04 cr
EBIDTA strengthened 9.89 percent from
Rs. 214.67 cr in 2007-08 to Rs. 235.91 cr
HOW WEPROGRESSEDIN 2008-09
Hindusthan National Glass & Industries Limited | 9
OUR GLOBALOPERATINGFRAMEWORK
The big picture Emerge as one of the world’s foremost container glass
packaging solution providers
Blueprint to realise the big picture •Strategic priority 1: Grow value of the HNG brand and
widen product portfolio
•Strategic priority 2: Transform our go-to-market model
to improve efficiency and effectiveness
•Strategic priority 3: Attract, develop and retain a highly
talented and diverse workforce
Values
•Accountability
•Customer-focused
•Team-driven
Drive long-termconsistent
sustainable growth
World-class capabilities
•Revenue growth
management
•Supply chain
•Sales and customer
service
10 | Hindusthan National Glass & Industries Limited
Challenging times. Declining offtake.
Total income (Rs. in cr) EBIDTA (Rs. in cr) Post-tax profit (Rs. in cr) Cash profit (Rs. in cr) 20
04-0
5
2005
-06
2006
-07
2007
-08
2008
-09
434.
36
426.
70
521.
84
1,02
8.19
1,34
4.19
75.5
9
73.9
5
103.
25
214.
67
235.
91
31.5
1
23.9
5
34.2
4
160.
34
107.
75
61.4
1
56.7
0
69.2
7
203.
83
182.
49
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
Hindusthan National Glass & Industries Limited | 11
HNG selected a difficult year to post record numbers.
EBIDTA margin (Percent) Consistent dividendpayout (Percent)
Earnings per share(basic) (Rs.)
Rising book value pershare (Rs.)
Debt-equity ratio (on
long term loans)
16.0
6
15.5
7
17.3
4
18.6
9
16.4
0
0.51
0.58
0.43
0.18
0.36
125.
04
145.
93
175.
80
433.
70
475.
97 7 7 10 40 50
28.5
3
21.6
9
31.0
1
91.7
9
61.6
8
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
12
CHAIRMAN’STHOUGHTS
HNG enjoyed another year of growth and success. We
are proud to be regarded as India’s largest and one of
the world’s leading container glass packaging
companies, manufacturing products that are highly
respected in the marketplace. The HNG brand’s
presence is spread across the Far East, Middle East,
Africa and America. We have worked hard to ensure
that our brand stands for quality and value and
represents the collective teamwork of our employees
worldwide.
Hindusthan National Glass & Industries Limited | 13
Today, HNG is an industry vanguard, thanks to our decades-
rich dedication to the simple principles of giving our
customers what they want, when they want and how they
want. This is what our corporate success has done to us: it has
broadened our mission; it has made us more responsible and
sensitive to customer demands; it has enabled us to firmly
integrate with customer product innovation and development
cycles, and in doing so, deeply embrace the relationship.
This enhanced customer-centricity strengthened our
organisational focus towards market-driving innovations and
transformation. This constancy of purpose will accelerate
global leadership and consequent wealth creation, benefiting
all stake owners.
Changing faster for the betterAt HNG, we believe in a simple dictum: transcendence
through transformation. Transformation as in challenging
conventions; transformation as in embracing business-
impacting change as a condition for forward movement;
transformation as in inculcating a culture of innovation,
defying all odds. At HNG, transformation has brought success
– and success for us necessitates further transformation.
Our transformation has done one more important thing to
us: it has enhanced our commitment quotient – commitment
to our customers, commitment to our employees, and
commitment to the communities around our operational
areas. Our customers have come to expect great products and
services from us, which we are determined to deliver. Our
employees have come to expect a fertile environment in which
they can perform and a management structure that
encourages, nurtures, values and rewards the creative process.
Exploration of the possible – and sometimes the impossible –
will always be encouraged.
There is much uncertainty and unpredictability in the current
global economic scenario, which has adversely affected
people’s lives and ways in which business is being conducted.
As a responsible and conscientious corporate, we are
committed to harness the best available resources for our
products, while upholding the highest standards of quality,
integrity and customer-centricity.
One of our most visible customer-centric achievements in
2008-09 comprised the creation of light-weight container
glass bottles. This was in view of our customers’ need to lower
cost structures in an economy marked by declining consumer
spends. Operational excellence lowered glass intake per tonne
of bottles. A lighter and thinner bottle also offered our
customers several advantages: one, optimum space utilisation
during transportation; two, low transportation and handling
costs; three, better asset and capacity utilisation through
faster bottling operations, reflected in increased frequency of
bottles filled per minute; four, lower wastage and bottle
breakages owing to higher glass strength; and five,
One of our most visible customer-centric achievements in 2008-09comprised the creation of
light-weightcontainer glassbottles.
14 | Hindusthan National Glass & Industries Limited
accelerated product roll-out to meet customer deadlines. Over
2009-10, a complete switchover to the state-of-the-art NNPB
(narrow-neck-press-and-blow) technology will enable us to
further reduce glass consumption per tonne of bottles,
strengthening customer relationships.
Conscientious corporate As we worked towards our goals, we relied on our core
strengths – people, operational excellence, innovation and
integrity – to respond to the rapidly evolving market realities.
Our growth and future prospects depend on customer loyalty,
which we have earned through hard work in the past and
which will continue to determine our road ahead.
In a significant development in 2008-09, which will have a
substantial bearing in 2009-10, the Glass Manufacturers
Association of India, led by HNG, advocated greater consumer
awareness by stamping the glass bottle’s year of manufacture
on the bottle itself, quite similar to information labels stuck
around bottles. This social initiative in terms of strengthening
health and hygiene standards will have a two-fold impact on
our business:
One, enhance cullet (broken glass) availability through
improved old bottle recycling. This initiative will enable
conscious consumers to dispose of old bottles for
recycling, enhancing overall critical raw material
availability.
Two, shorten the bottle reusability cycle substantially
from around 25 times now, growing product demand and
accelerating profitable business growth.
Outlook To retain market leadership, we will continue to cultivate
a culture that does not fear failure. In 2009-10, we are
undertaking container glass capacity increments through a
sizeable expansion in installed capacity.
We invite you to be a part of a Company that is not only
India’s largest, but is strategising to emerge as one of the
world’s largest container glass packaging companies.
Sincerely
CK Somany
Chairman
15
Our growth andfuture prospectsdepend on customerloyalty, which wehave earned throughhard work in the pastand which willcontinue to determineour road ahead.
16 | Hindusthan National Glass & Industries Limited
LOCALLYMANUFACTUREDBOTTLES. GLOBALLYBENCHMARKEDSTANDARDS.
CustomerThe Global Green Company Limited (GGCL) is a part of the
diversified USD 3 billion Avantha Group. GGCL possesses
multiple plants across India and Europe to process gherkins.
Customer objectives GGCL desired to evolve its product sourcing with the following
objectives in mind: indigenise jars complying with
international standards on the one hand and reduce costs on
the other.
Our response HNG designed and developed customised jars in line with the
customer’s needs. It imported new hot-end coating
equipment for the first time in India and revamped its cold-
end coating technology. These proactive investments
translated into a number of benefits: a compliance with
international bottling standards and requirements, coat layer
permanence, enhanced scratch resistance, increased bottle
strength and improved bottle surface lubrication.
Customer benefits The improved product immediately translated into a superior
performance at the customer’s packaging line in the following
ways:
Accelerated production by nearly 40 jars per minute
Enhanced packing line efficiency by over 22 percent
Reduced wastages/bottle loss from 1 percent to less than
0.5 percent
Customer satisfaction“The gherkin jars developed by HNG, helped us achieve
the desired objectives — the quality of jars continues to meet
international standards and line performance has seen a
substantial improvement. We are eager to maintain a steady
long-term relationship with HNG, not only for this line
of products, but other SKUs as well!” Santosh Nair,
17
Vice President, Procurement, Global Green Company Limited*
* Global Green is a multinational food company, engaged in
the growth, manufacture, distribution and sale of pickled
cucumbers (gherkins, cornichons, pickles and relish), sweet-
corn, silverskin onions, peppers (jalapeño and paprika),
cherries, capers and mixed vegetables.
HNG imported new hot-endcoating equipment for the
first timein India and revamped its cold-endcoating technology.
18
ENHANCINGAESTHETICS. OPTIMISINGCOSTS. CustomerThe Coimbatore-based Shiva Distilleries Limited is engaged in the production
of a range of India Made Foreign Liquor with an annual production capacity of
6.6 million cases, leading to a Rs. 405-cr turnover.
Hindusthan National Glass & Industries Limited | 19
Customer objectivesSome time ago, a company approached HNG with the
following needs:
To graduate to a fresh bottle design, optimise line
speeds, improve productivity and reduce marketing time
To strengthen brand equity in a competitive marketplace
Our response HNG responded with the following initiatives: it designed a
180 ml bottle with its principal axis set to enhance bottle
compactness, improved glass distribution, enhanced tensile
strength, reduced breakages and augmented line efficiencies.
Customer benefitsOur customer enjoyed the following benefits:
Improved overall line efficiencies
Reduced wastages
Aesthetically differentiated product, leading to a
competitive edge
Customer speak“The 180 ml bottle developed by HNG helped us meet our
desired objectives. The breakage level for this bottle vis-à-vis a
standard bottle reduced substantially with an overall
improvement in line performance. We look forward to
working on more designs with HNG to improve our brand
equity and achieve cost optimisation benefits.
Dr. S.V. Balasubramaniam, Chairman, Bannari Amman
Group*
*Shiva Distilleries Limited, a part of the Bannari Amman
Group, was established in 1983 at Coimbatore, Tamil Nadu.
The company is engaged in the production of a range of
Indian Made Foreign Liquor (IMFL) and possesses the largest
market share in Tamil Nadu.
HNG designed a 180 ml bottle withits principal axis set to
enhance bottlecompactness,improved glass distribution,enhanced tensile strength etc.
20
MANAGEMENTSTATEMENT The Management of Hindusthan National Glass & Industries Limited discusses how the Company’scustomer focus helped navigate it through the 2008-09 slowdown as well as the road ahead. At HNG, we reported a successful
2008-09 in an environment offinancial and industrial uncertainties,which makes our performance all themore creditable.
At HNG, we believe that it is customer-centricity
that will align us with evolving market
requirements leading to proactive product
development; we believe that it is customer-
centricity that will protect our existing relationships
leading to the prospect of a stable and sustainable
income; we believe that it is customer-centricity
that will enable us to grow our topline and cover
our fixed costs more effectively, leading to
enhanced margins and profits. As a result, we see
customer-centricity as the basic driver of our
leadership position within India’s container glass
industry.
During the last financial year, the biggest challenge
was a decline in the offtake of products
manufactured by our customers leading to a
greater need for them to reduce costs. As a
responsive organisation, we addressed this reality
directly through the development of the narrow-
neck-press-and-blow-technology (NNPB) for
container glass bottles. This advanced container
glass manufacturing technology helped rationalise
bottle weight from 15 percent to 35 percent
without in any way compromising glass
consistency and tensile strength on the one hand.
Much of this benefit was passed on to the
customer. So we would like to state with
We seecustomer-centricity
as the basic driver ofour leadership positionwithin India’s container
glass industry.
21
satisfaction that in a year when the market environment
turned challenging for most companies, HNG helped its
customer emerge more competitive.
In 2007-08, we merged ACE Glass Containers Limited with our
Company, whose full benefit was reflected in the Company’s
working. ACE Glass Containers Limited was the second largest
Indian container glass manufacturer after us with a capacity of
0.37 million TPA across Rishikesh, Puducherry and Nashik. The
merger widened our margin-accretive product portfolio,
enhanced our economies-of-scale and strengthened our
customer service flexibility. This immediately translated into
enhanced visibility. For instance, our Company was ranked
307th among the top 1,000 companies – ranked on the basis
of net sales and other financial parameters – by Business
Standard in March 2009, the only company from our industry
to figure in the list. Our Company was also rated the best
Indian company in the ‘Glass & Ceramics’ category by Dun &
Bradstreet, strengthening our brand.
As a proactive organisation, we have already commenced the
seed marketing of imported float glass under guided technical
specifications through our existing distributor network in
Gujarat, Rajasthan and Madhya Pradesh. We expect to widen
our presence across the rest of western and northern India as
well as exports.
Container glass enjoys its own importance in the packaging
industry, despite the rapid development of packaging
alternatives for an important reason: established environment
friendliness reflected in its biodegradability and recyclability.
We see an attractive scope in our business on account of the
fact that 10–12 percent of all food and beverages are packed
in glass containers in India, whereas the corresponding figure
is 40–50 percent across developed countries. Besides, the
growing awareness on account of benign and hygienic
packaging demand will drive the demand for container glass
over plastic alternatives.
We are passing through a period of economic uncertainty. In
this environment, there will be some local or global acquisition
opportunities around an attractive price-value. We must
apprise our stakeholders that we will address those
opportunities with adequate prudence and entrepreneurial
alertness but only after we are adequately convinced that the
addition will enhance our overall organisational value.
We also expect to complete the implementation of the NNPB
technology across all our manufacturing units. The total
implementation of SAP across our organisation will enhance
accurate information availability and reinforce our customer-
centricity and market-responsiveness.
22 | Hindusthan National Glass & Industries Limited
CORPORATERESPONSIBILITY AND SUSTAINABILITYAT HNG
Hindusthan National Glass & Industries Limited | 23
Our true wealth at HNG is not what is reflected in thesize of our bottomline but in the respect that we evokeamong the stakeholders and communities associatedwith us. This respect is derived from the broadresponsibility of our actions, which makes our businesstruly sustainable for the benefit of all those associatedwith us. The various initiatives to do so comprise thefollowing: grow the HNG brand; expand the productportfolio; improve efficiency and effectiveness; attract,develop and retain a talented workforce and align ouroperating model with the best environmentalstandards.
For each of these priorities, we have developed corresponding focus
areas and aligned those against stakeholder expectations. We are also
working to embed sustainability into our business processes through
various initiatives. We have designated managers – for internal and
external CSR engagement – who work with our subject matter experts to
track progress against our targets and oversee data-gathering process for
reporting purposes. These managers also work closely with our key
external stakeholders to ensure that our efforts are in line with
expectations. We ensure that all our employees complete a training in
ethics; we also ensure that our sales and management representatives
undergo competition law and industry codes training as a part of our
CSR endeavour.
We have focused on four CSR areas – critical to our business and key for
our stakeholders – comprising the following:
Water stewardship Sustainable packaging and recyclingEnergy conservation and climate change Productivity gains and improvements
24 | Hindusthan National Glass & Industries Limited
We are delighted to present the Annual Report together with the audited accounts of our business and operations for the
year ended March 31, 2009.
Financial Highlights
(Rs. in lacs)
Year ended March 31, 2009 Year ended March 31, 2008
Gross sales (including excise duty) 1,43,860 1,14,834
Profit before interest, depreciation and tax 23,591 21,467
Interest and finance charges 4,345 2,347
Profit before depreciation and tax 19,246 19,120
Depreciation 7,474 7,013
Profit before Tax 11,772 12,107
Provision for Tax 997 (3,927)
Profit after Tax 10,775 16,034
Balance brought forward from previous year 1,072 706
Amount available for appropriation 11,847 16,740
Appropriation
General Reserve 7,000 14,850
Debenture Redemption Reserve 1,250 –
Proposed Dividend 873 699
Tax on Dividend 148 9,271 119 15,668
Balance carried forward to the next year 2,575 1,072
DIRECTORS'REPORT
Hindusthan National Glass & Industries Limited | 25
ReviewThere was a revenue growth of 25% during the financial year
2008-09 as against 21% in the last year. PBIT recorded a growth
of 11.51% despite of there being global economic meltdown
and general recession. This is attributable to efficient cost
management and prudent operating practices.
DividendIn view of your Company’s satisfactory performance, the
Directors recommend a dividend of 50% i.e. Rs. 5 per equity
share for the financial year ended March 31, 2009.
OutlookIndia continues to be one of the fastest growing economies of
the world. A number of factors like growing disposable income
coupled with change in the demographic pattern of the
population will help in generating more demand for packaged
goods, hence creating better opportunities for the Company.
Further, the growth in beer, pharma, food, liquor and other
high-end sectors will drive revenue growth and translate into
profitability. Your Company is well-equipped to grow and
prosper with the opportunities associated with expanding
markets. However, your Company faces substitution threats
from PET bottles and other such alternatives.
DirectorsThe Board wishes to place on record its sincere appreciation and
gratitude for the unstinted support and guidance received from
Supriya Gupta who has left for his heavenly abode.
During the year under review, the Board appointed Shri. R. R.
Soni as Executive Director w.e.f. October 27, 2008.
Shri. Kishore Bhimani, Shri. Sujit Bhattacharya and Shri. S. K.
Bangur, retire by rotation and being eligible, offer themselves
for re-appointment.
Trust SharesPursuant to amalgamation of Ace Glass Containers Limited
with the Company, 2141448 shares and 1368872 shares were
issued to HNG Trust and Ace Trust respectively. In terms of
an undertaking given to the Bombay Stock Exchange, the
Company is required to make disclosures pertaining to utilisation
of proceeds of shares allotted to the said Trusts until they are
extinguished. During the financial year ended on March 31,
2009, no shares lying in the account of the Trusts were
disposed off.
Fixed DepositsThe Company did not accept any deposits from the public during
the financial year 2008-09.
Consolidated Financial StatementsConsolidated Financial Statements are prepared in accordance
with Accounting Standard 21 read with Accounting Standard
23, issued by the ICAI and forms part of this Annual Report.
Auditors’ ReportThe Auditors’ Report read with notes to accounts is self-
explanatory. Regarding Auditor’s observation at Point No. 2 of
their report that no approval from the Central Government was
obtained for carrying out transactions with M/s Mould
Equipment, a firm in which the Directors of the Company are
indirectly interested, it is clarified that the Company is already in
process of obtaining the approval of the Central Government.
Listing on the Stock ExchangesDuring the year, the Company’s shares were listed at the
National Stock Exchange (NSE). Besides, the Company’s shares
continue to be listed at the Bombay and Calcutta stock
exchanges respectively.
The annual listing fees for the financial year 2009-10 have been
paid to all these exchanges.
AuditorsM/s Lodha & Company, Chartered Accountants, retire at the
conclusion of the ensuing Annual General Meeting and have
confirmed their eligibility and willingness to accept the office of
the Statutory Auditors for the financial year 2009-10, if re-
appointed.
M/s Singhi & Co., Chartered Accountants, retire at the
conclusion of the ensuing Annual General Meeting and have
confirmed their eligibility and willingness to accept the office of
the Branch Auditors for the financial year 2009-10, if re-
appointed.
Directors’ Responsibility Statement pursuant toSection 217(2AA) of the Companies Act, 1956The Directors hereby confirm that:i) in the preparation of the Annual Accounts for the financial
year 2008-09, the applicable Accounting Standards have been
followed and that there are no material departures;
26 | Hindusthan National Glass & Industries Limited
ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company and of the profit of the Company
for the financial year ended on March 31, 2009;
iii) they have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for safeguarding
the assets of the Company and for preventing and detecting
fraud and other irregularities;
iv) they have prepared the Annual Accounts on a ‘going concern’
basis.
Corporate GovernanceThe report on Corporate Governance along with the Certificate
of the Statutory Auditors, M/s. Lodha & Co., confirming the
compliance of conditions of Corporate Governance as stipulated
under Clause 49 of the Listing Agreement forms part of this
Annual Report.
Subsidiary companiesParticulars relating to subsidiary companies as required under
Section 212 of the Companies Act, 1956 are annexed hereto
and forms part of this Annual Report. The Consolidated Financial
Statements include the financial information of its subsidiaries.
ExportsDuring the year, direct export turnover of the Company was
Rs. 5,773 lacs, compared to Rs. 4,032 lacs achieved during the
preceding financial year. Continuous efforts are ongoing to tap
the export market for which there exists great potential.
Personnel and Industrial relations Your Company is strengthening and developing human
resources and systems to improve overall efficiency and
motivation. The principal initiatives undertaken by the Company
comprised skill development and acquisition programmes and
yoga classes, to name a few. Industrial relations continued to
remain cordial during the year.
Statement of employees Statement of particulars of employees as required under Section
217(2A) of the Companies Act, 1956 and rules framed
thereunder, forms part of this Annual 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 part of this report.
Corporate Social ResponsibilityYour Company endeavours blending optimally its business
senses with corporate care and instill an utmost commitment to
social responsibilities either directly or through its affiliates.
Your Company has established at Bahadurgarh, the Bal Bharti
School where not only the children of the Company’s employees
are benefited but also those residing in peripheral areas of the
Bahadurgarh Plant. It has also promoted healthcare benefits by
contributing to corpus funds of hospitals and setting up special
programs viz. eye testing campaigns, heart treatment for
children etc. Parks and gardens such as the McPherson Square,
now called Maharana Pratap Udyan in South Kolkata are
continuing to be maintained by the Company to provide an
environment where citizens can relax and take in fresh air amidst
the city’s chaos.
Social responsibility and social accounting remain at the core of
your Company’s business model.
AcknowledgmentsThe Directors wish to express their sincere appreciation for the
continued support and co-operation received from the financial
institutions, banks, government authorities, customers,
shareholders and stakeholders. The Directors also place on
record their deep appreciation for the valuable contribution of
its employees at all levels and look forward to their continued co-
operation in realisation of the corporate goals in the years
ahead.
For and on behalf of the Board
Kolkata C. K. SomanyJune 20, 2009 Chairman
Hindusthan National Glass & Industries Limited | 27
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, 2009.
I. Conservation of EnergyEnergy conservation measures taken 1. Increased power factor from 0.97 to 0.99 by installing the
Capacitors.
2. Energy savings by routing dry air to Furnaces.
3. Side Insulation done to reduce LPG consumption.
4. Construction of stand by Thickner in Sand Plant for water
conservation by recycling the used water.
5. Replacement of 250 watt High Power sodium vapor Lamp
with 108 watt CFL Lamp.
6. Your Company contemplates making such investments as and
when suitable to reduce energy consumption. The material
impact of such measures on the production cost therefore
cannot be quantified at this stage.
ANNEXURE TO THE DIRECTORS’
REPORT
FORM - ADisclosure of particulars with respect to Conservation of Energy
Particulars Unit Year ended 2008-09 Year ended 2007-08
A. Power and fuel consumption
1. Electricity
a) Purchased unit 000 KWH 1,75,513 1,52,102
Total amount Rs. in lacs 6,638.21 5,424.10
Average rate/unit Rs. 3.78 3.57
b) Own generation
Through diesel/H.P.S oil / Furnace oil
By generator unit 000 KWH 27,059 17,531
Units per litre of oil 3.91 4.31
Average rate/unit Rs. 6.58 5.58
c) Own generation (through L.D.O.)
By generator unit 000 KWH – 15,490
Units per litre of oil – 3.73
Average rate/unit Rs. – 4.81
d) Own generation (through LNG)
By generator unit KWH 5,06,64,690 4,25,44,484
Units per litre of MMBTU of LNG 103.72 106.64
Average rate/unit Rs. 2.88 2.22
2. F-oil /RFO
Quantity KL 76,409 51,809
Total amount Rs. in lacs 19,199.43 9,856.65
Average rate/unit Rs. 25,127 19,025
28 | Hindusthan National Glass & Industries Limited
Particulars Unit Year ended 2008-09 Year ended 2007-08
3. L.N.G.
Quantity MMBTU 1,20,365 17,12,334
Total amount Rs. in lacs 3,591.89 4,052.35
Average rate/unit Rs. 298 234
4. i) L.P.G.
Quantity MT 9,473 8,421
Total amount Rs. in lacs 3,906.90 2,998.09
Average rate/unit Rs. 41,242 35,602
ii) L.D.O.
Quantity KL – 7.54
Total amount Rs. lacs – 2.29
Average rate/unit Rs. – 30,348
iii) H.S.D.
Quantity KL 127 1,477
Total amount Rs. in lacs 41.79 425.29
Average rate/unit Rs. 32,964 28,801
iv) H.P.S. oil
Quantity KL 116 20,882
Total amount Rs. lacs 33.83 4,439.64
Average rate/unit Rs. 29,108 21,261
B. Consumption per unit of production
Glass containers and tumblers MT 7,67,971 6,91,359
Electricity KWH 330 329
L.P.G. KG 12.34 12.18
L.D.O. LTR 0.00 0.01
F-Oil/ RFO / Equv.Oil LTR 99.50 74.94
LNG MMBTU 1.57 2.48
H.S.D LTR 0.17 2.14
H.P.S. LTR 0.15 30.20
Notes:
1. The Company manufactures only container glass.
2. Variation in consumption of power and fuel is attributable to enhanced production capacity.
Hindusthan National Glass & Industries Limited | 29
FORM B
II. Disclosure of particulars with respect totechnology absorption A. Research and Development (R&D) Research & Development continues to remain a focal point inour efforts towards improvement. Energy consumption andabsorption have been principal areas of action. As the Companydoes not have any exclusive R&D facilities, it carries out itsdevelopmental activities for process innovation and productdevelopment as a part of its business process.
Benefits DerivedAs a result of Company’s continuous growth in Research &Development, there had been reduction in cost of production.
Future plans of actionThe Global Economic scenario makes the year aheadchallenging. The Company is relying on its innovative strengthsin the face of challenges to create strong differentiators for itscustomers.
Your Company will continue to invest in R & D activities toenhance productivity and operational efficiency to create savingsfor its customers and increase its profitability.
Expenditure on R&DDuring the year, expenditure incurred on Research andDevelopment are as enumerated below:
(Rs. in lacs)
2008-09 2007-08
a. Capital – –
b. Recurring 38.26 7.91
c. Total 38.26 7.91
d. Total R & D expenditure as a percentage of the turnover Insignificant Insignificant
B. Technology Absorption, Adaptation and InnovationYour Company continues to focus on daily innovations in shapeand quality of its product and in energy saving devices. To namea few, the initiatives taken by the Company and the benefitsderived therefrom in the year under review are:
Two IS Machines which were replaced with latest AIS triplegob 12 section Machine, optimised Plant performance.
Two New Vacuum Pumps which were installed improvedquality and productivity.
Automatic Moisture Measurement System installed in batchhouses for measurement and correction of silica sand moisture.
On line Oxygen Measurement and Automatic FO/ CombustionAir Ratio Correction System from STG, were installed to conserveFurnace oil consumed.
Developed its top geared CAD/CAM facilities to design bottlesin various shapes customised to the requirements ofpharmaceutical, cosmetic, processed food, liquor and soft drinksindustries.
Modern ERP application software like SAP is being installed toreduce cost and minimise disruptions in the Company’soperations.
III. Foreign Exchange Earnings and OutgoYour Company has taken initiatives to strengthen its strategicpresence globally by constantly accessing new sale avenues inoverseas markets of Bangladesh, USA, South Africa, Kenya,Australia, Hong Kong, to name a few. During the financial year2008-09 the Company had recorded an increase in export byRs. 17.41 Crores. The foreign exchange earnings and outgo ofthe Company is detailed below
(Rs. in lacs)
Current year Previous year
(i) Earnings in foreign exchange 5,772.77 4,032.46(excluding indirect exports of Rs. 6,538.14 lacs; previous year Rs. 3,009.80 lacs and exports to Nepal Rs. 1,419.95 lacs; previous year Rs. 169.19 lacs)
(ii) Expenditure incurred in foreign exchange
1. Raw materials 6,489.33 5,698.52
2. Capital goods 5,131.73 1,939.26
3. Components, spare parts 4,894.01 1,497.50and repairs
4. Other expenses 384.84 272.24
For and on behalf of the Board
Kolkata C. K. SomanyJune 20, 2009 Chairman
30 | Hindusthan National Glass & Industries Limited
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. Further, w.e.f. February 20, 2009 Mr. N. Khanna
was appointed as the Senior Vice President (Finance) & Chief Financial Officer (CFO) of the Company.
We, Sanjay Somany, Managing Director; Mukul Somany, Joint Managing Director and Nirmal Khanna, Sr. Vice President (Finance)
and Chief Financial Officer, responsible for the finance function certify that-
(a) We have reviewed the Financial Statements and the Cash Flow Statement for the year ended March 31, 2009 and 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) To the best of our knowledge and belief, no transactions entered into by the Company during the financial year ended March
31, 2009 are fraudulent, illegal or violating the Company’s code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the
effectiveness of internal control systems of the Company pertaining to financial reporting. Deficiencies in the design or operation of
such internal controls, if any, of which we are aware have been disclosed to the Auditors and the Audit Committee and steps have
been taken to rectify those deficiencies.
(d) We have indicated to the Auditors and the Audit Committee:
(i) That there has not been any significant change in internal control over financial reporting during the year under review;
(ii) That there has not been any significant change in accounting policies during the financial year 2008-09 requiring disclosure
in the notes to the financial statements; and
(iii) That during the year under review, we are not aware of any instance of significant fraud and involvement therein of the
management or any employee having a significant role in the Company’s internal control system over financial reporting.
Nirmal Khanna Mukul Somany Sanjay Somany
Senior Vice President (Finance) Joint Managing Director Managing Director
Chief Financial Officer (Chief Executive Officer) (Chief Executive Officer)
Kolkata
June 20, 2009
CEO & CFO Certification
Hindusthan National Glass & Industries Limited | 31
Particulars of Employees in Terms of Section217(2A) of The Companies Act, 1956
Sl. Age Qualification Date of Designation Gross Last Employment
No. Name (Years) & Experience Appointment (Nature of Remuneration held (Designation)
in years Duties) (Rs.)
1 Mr. Sanjay Somany 50 B. Com. Dip. 01.10.2005 Managing 1,35,01,378 Glass Equipment
In Diesel Engg. Director (India) Ltd.
29 years (To Manage the (Managing Director)
affairs of the
Company on day
to day basis)
2 Mr. Mukul Somany 43 B. Com (Hons.) 01.10.2005 Jt Managing 1,37,73,534 None
22years Director (To manage
the affairs of the
Company on day
to day basis)
3 Mr. R. R. Soni 50 B.Com (Hons) 27.10.2008 Executive Director 26,33,585 Grasim Industries Ltd.
F.C.A. (Sr. Vice President)
27 years
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. Mr. R. R. Soni who was designated as Sr. President & Chief Financial Officer, was appointed as the Executive Director w.e.f. from
October 27, 2008.
4. All appointments of the above employees are contractual.
For and on behalf of the Board
Kolkata C. K. Somany
June 20, 2009 Chairman
32 | Hindusthan National Glass & Industries Limited
MANAGEMENTDISCUSSION
AND ANALYSIS
Indian packaging industryIndian packaging industry is estimated at US$ 14 billion and
growing at a rate of more than 15% annually. These figures
indicate a change in the industrial and consumer set up.
The Indian fascination for rigid packaging remains intact.
It is estimated that more than 80% of the total packaging in
India constitutes rigid packaging, the oldest and the most
conventional form of packaging. The remaining 20% comprises
flexible packaging.
India's per capita packaging consumption is less than US$ 15
against world wide average of nearly US$ 100.
The large and growing Indian middle class, along with the
growth in organised retail in the country, are driving demand in
the packaging industry. Another factor, providing substantial
stimulus to the packaging industry, is the rapid growth of
exports, requiring superior packaging standards for the
international market. [Source: IBEF]
Container glass industry OverviewThe Indian container glass market is estimated at 320 million
euro accounting for 12% of the packaging industry. The market
for container glass has been growing at a rate of 8% over the
last five years. The demand in the container glass industry is
driven by a growth in end-user segment like processed foods
(FMCG), beverages, beer, liquor, pharmaceutical and retail.
World glass container per capita consumption (Kg.)
Advantage glassEnvironment friendly
Natural product
Lowest pollution (total life cycle) – emissions at various recycling
levels are lower in glass compared to aluminium and PET
Light and convenient
Inertness to heat
Inertness to ultra-violet rays
Visibility of product
Lowest cost (per life cycle)
Longer re-cyclability
Versatility of design
Hindusthan National Glass & Industries Limited | 33
Growth driversGrowing food processing industryThe Indian food market, according to the 'India Food Report
2008', is estimated at over US$ 182 billion, and accounts for
about two thirds of the total Indian retail market. Further,
according to consultancy firm McKinsey, the retail food sector in
India, is likely to grow from around US$ 70 billion in 2008 to
US$ 150 billion by 2025, accounting for a large chunk of the
world food industry. This would grow from US$ 175 billion to
US$ 400 billion by 2025, driving the demand for packaging
alternatives, especially glass containers. [Source: IBEF]
Increasing rural consumptionThe FMCG industry in India was worth around US$ 16. 03 billion
as on August 2008, and the rural market accounted for a robust
57% share of the total FMCG market in India, overtaking the
urban market (43%). The rural per capita consumption of
FMCGs would equal to current urban levels by 2017. Industry
analysts also expect the FMCG sector in rural areas to grow 40%
against 25% in urban. [Source: IBEF]
Growing beer consumption The Indian beer industry has been witnessing steady growth of
7-9% per year over the last 10 years. The rate of growth
remained steady in recent years, with volumes passing from
mere 70 million cases in 2002 to 155 million cases in 2008. The
Indian beer market is dominated by strong beers (>5% alcohol
by volume), which accounts for 70% of the total beer industry.
The premium beer market is a mere 5% of the total but this
segment is rapidly expanding, touching a growth rate between
35-40%. As a result, the demand for container bottle will surge.
[Source: All India Brewers’ Association]
OutlookThe Indian economy is projected to achieve a sustainable GDP
growth of around 6.5% whereas the annual growth of the
packaging industry is expected to double to around 20-25%.
The container glass industry, which grew at a compounded
annual growth rate (CAGR) of 8% over five years, is expected to
grow over 8% in the future. [Source: IBEF]
The demand for container glass will grow on account of the
forecasts that packaging material for beverages will mainly be of
glass, especially for high quality packaging. Glass container plants
will improve technology levels to produce thin and light-weighted
bottles. Beer bottles should be made in more specifications,
meeting the demands of customers at various levels. Based on
the analysis of the current market demands at home and abroad,
tubular vials for antibiotic use will increase gradually, although
injection vials will still remain in the greatest demand.
Business driver – 1
Raw material resource management At HNG, corporate sustainability is derived from an ability to
steady raw material cost structures across various market cycles
either by tying up with new vendors or through acquiring lease
rights. The Company’s principal raw materials comprises sand
(quartz), limestone (calcite), cullet (broken recyclable glass), soda
ash, dolomite and feldspar. Soda ash prices constituted 49
percent of the total raw material cost (value wise), followed by
cullet (25 percent), sand (12 percent) and other raw material
(14 percent). The Company’s priority in this regard continued
an emphasis on modest raw material cost combined with
anytime availability leading to efficient, uninterrupted
The recycling loop
Glass recyclingSave energy in manufacturing for each tonne of cullet
(recyclable glass) used, energy consumption is reduced by 2.5%
Reduces emissions (including CO2)
Preserves raw materials and landscapes
Each tonne of cullet used means1 tonne less of land fill
Over 1 tonne less of natural resources depletion
34 | Hindusthan National Glass & Industries Limited
production at all times.
Highlights, 2008-09Leveraged a decades-rich relationship with soda ash vendors
like Magadi (East Africa), Tata Chemicals, Gujarat Heavy
Chemicals and Nirma leading to stable supplies
Widened supply sources through the enlistment of a chemical
soda ash supplier from Iran
Imported around 50 percent of its annual soda ash
requirement of 100,000 tons
Hedged against unforeseen supply disruptions through an
average 20 days inventory for raw materials available in vicinity
of 250 kms and 30 days inventory for other critical raw materials
Reinforced the price-value proposition through relatively stable
raw material sourcing despite price revisions
Used natural soda ash over chemical soda ash with a
corresponding price advantage of around 10 percent
Road aheadTo increase quantity of imported Soda Ash from 50% to 70%
Proposed entry into long-term (annual) contracts with vendors
leading to win-win situations
Proposed organised cullet collection from vendors, improving
availability
Proposed optimisation of logistic costs through silica
procurement from captive mines located within 250 km of each
plant (Prospecting Licenses applied for)
Business driver – 2
Manufacturing and operationsAt HNG, our competitive edge is derived from an ability to
service the growing needs of customers. In turn, this advantage
is derived from its position as the largest Indian container glass
manufacturer with planned growing capacities.
Rishra
Automatedbatch-mixingfacility
ISmanufacturinglines
On-site bottleprinting facility
On-site mouldrepair shop anddesign facility
Amber, flintand green glassmanufacturer
Nashik
One Furnace
IS manufacturinglines
On-site bottleprinting facilitywith threedecorating lines
Mould workshopfor product designand manufacture
Neemrana
Onefurnace
Puducherry
One furnace
Fully automatedbatch-mixing facility
On-site printingfacility with threedecoration lines
On-line automatic OI inspection machines
On-site modernfinished goodswarehouse
Sand beneficiationplant, foundry andmould workshop
Bahadurgarh
Three furnaces
IS manufacturinglines
On-site bottleprinting facility withfour decorating lines
Foundry and mouldworkshop
100% energy feedthrough captive powergenerating facility
Amber, flint andgreen glassmanufacturer
Rishikesh
Two furnaces
Furnace II usedfor Green glassmanufacture
Off-site printingfacility with threedecorating lines
Our six manufacturing facilities
Hindusthan National Glass & Industries Limited | 35
Highlights, 2008-09Implemented vacuum pumps in production lines, enhancing
output rate, quality and energy efficiency.
Added a booster in a Bahadurgarh furnace, enhancing
capacity and reducing power consumption.
Reduced bottle weight on an average 15 percent through
innovative redesign; the weight of 180 ml mcd-1 bottles
declined 13 percent from 217 grams to 189 grams, 377 mcd-1
bottles declined 15 percent from 352 grams to 300 grams, 750
mcd bottles declined 16.08 percent from 628 grams to 527
grams, pickle bottles declined 7.50 per cent from 200 grams to
185 grams and glucose bottles declined 10 percent.
Drove continuous change in container bottle design,
developing new products.
Introduced Japanese technology to shrink job change and
stabilisation time, enhancing capacity utilisation
Commenced hot end and cold end coating through lubrication
for scratch resistant bottle manufacture, which increased bottle
strength and longevity
Developed new moulds and casts to reinforce moulding and
casting operations
Changed mould metal mix from cast iron to Minox (bronze),
which increased machine speed, enhanced quality and reduced
defects
Virtually eliminated storage breakage from an erstwhile 0.1
percent through efficient pallet stacking.
Implemented ERP to integrate operations, planning and
decision-making.
The science of light weighting Existing bottle glass is analysed
Analysis result leads to conclusion of how much weightreduction is possible
Bottle design is drawn such that during forming, no glassdistribution related issues should arise; should have asmoothened profile making blowing easier and increasingforming efficiency
Once the design is approved engineering commences andsample mould casting is sent for
Internal trial is conducted (bottle performance check in thelines)
Customer approval is sought
After approval receipt, commercial production commences
Road ahead
Proposed implementation of the vacuum pump across allproduction lines by 2009-10
Proposed capacity expansion by 50 tonnes and 100 tonnesthrough the re-building of Bahadurgarh furnaces in 2009-10
Proposed Rs. 170 cr capacity expansion from 600 TPD to 800-850 TPD in 2009-10, estimated to operationally break-even by2010-11
Proposed commercialisation of narrow-neck-press-and-blow(NNPB) operations across all plants leading to enhanced lightweighting by 25–30 percent
Projected commissioning of Rs. 600-cr greenfield float glassmanufacturing facility in Vadodara (Gujarat) by September2009
The benefits of light weighting Consumer benefit Company benefit
Enhanced availability Faster production rate (productivity increased by 8–10 percent)
Reduced transportation cost Optimum raw material use
Accelerated bottling process Overall cost reduction
Increased bottles per ton Increase in profitability
Reduced price per bottle
Improved bottle quality
Enhanced bottle transparency
Increased strength following uniform and optimum wall thickness
36 | Hindusthan National Glass & Industries Limited
Business driver – 3QualityAt HNG, quality is not an intangible virtue, but represents the
convergence of all product attributes to enhance durability and
progressively evolve from breakdown-maintenance to preventive
maintenance philosophy.
The Company’s ISO 9000:2000 certification vindicates its quality
brilliance, catering to customer specifications with inspection
across 140 defect parameters, which are well within customer
tolerance levels.
Highlights, 2008-09Tightened supervisory control on job change to enhance
product quality
Received ISO 22000 certification for food safety management
systems for the Rishra and Puducherry plants
Implemented three Six Sigma projects on quality
improvements
Conducted extensive research on customer requirements
to obtain data on quality, packaging, light weighting,
bottling speed and pressure, capping facility, etc; around 50
customer plants were visited to provide superior quality and
customisation.
Formed a six-member team for pre-dispatch inspection (PDI)
ensuing packaging inspection and proper loading.
Road aheadCommence more Six Sigma projects for further quality
enhancements
Automate quality inspection for quality excellence
Start ‘clean room production’ for pharmaceutical bottles,
complying with US-FDA norms
Business driver – 4Marketing and distributionAt HNG, dependability is derived from an ability to demonstrate
container glass packaging options that are superior than
competing companies and packaging alternatives on
the one hand as well as making timely product deliveries
on the other, leading to customer delight. This ability is derived
from an ongoing quest for R&D-driven excellence and plant
positions in customer-proximate locations - a holistic delivered
solution.
Highlights, 2008-09Enhanced net value of revenue from customers
Enhanced quality designs, service and value-for-money, driving
overall sales volume by 10 percent
Accelerated bottle light-weighting, reducing material and
logistic costs
Customised products and widened the product mix,
strengthening the customer experience
Successfully addressed the design challenge for the
sophisticated ‘Gorbatschow’ liquor bottle
Added several brand-enhancing clients like Carlsberg and John
Distilleries, among others, to its formidable customer list.
Enhanced its global footprint through a deeper presence in
Europe, Asia and America
Road aheadProposed market share expansion through product
development, bottle light-weighting and enhanced NNPB
product proportion in the corporate portfolio
Increased export share through an entry into new geographies
as well as a consolidation in the existing ones
Proposed increase in installed capacity by around 14 percent
to service growing market and consumer needs
Business driver – 5Safety, health and environment At HNG, manufacturing process involves several operations
which can adversely impact employee safety, employee health
and the surrounding environment, warranting investments in
safety equipment, processes, practices and people. The
Company deputed a professionally qualified safety, health and
environment officer in each of its manufacturing facilities.
Highlights, 2008-09Conducted monthly training programmes on safety aspects
Commenced the water re-cycle plant in which effluent water is
chemically treated for gardening, cullet washing and other jobs.
Implemented several effluent control devices to reduce water
pollution
Enhanced the number of fire extinguishers in the factories
Conducted first-aid training programmes by St. John
Ambulance at the Rishra plant
Hindusthan National Glass & Industries Limited | 37
Introduced repellents for enhanced hygiene
Conducted yoga classes for employees and their families
Road aheadBecome a zero discharge company
Enhance focus on air pollution control by the implementation
of modern devices
Focus on better housekeeping
Business driver – 6Information technology platform At HNG, robust IT infrastructure facilitates time-critical and
proactive decision-making. HNG undertook the following
initiatives to remove its IT infrastructure bottlenecks:
Highlights, 2008-09Implemented SAP in Rishra, Bahadurgarh, Puducherry and
Nashik plants, involving a Rs. 15-crore investment; the platform
encompassed financial management, material management,
production planning, plant maintenance and quality
management to enhance organisational integration and
performance
Set up the SAP central site at the Bahadurgarh plant and a
disaster recovery site at the Rishra plant
Improved the speed of network devices – from 10/100 mbps
to 1,000 mbps – at the Bahadurgarh plant for accelerated
communication
Road aheadIntroduce human resource management under the SAP
platform
Bring the Neemrana and Rishikesh plant under the SAP
platform
Improve network devices for all plants
Introduce window deployment services (WDS) in all plants for
faster IT operations
Business driver – 7Talent managementAt HNG, the most enduring capital is the sum of our people
qualifications, experience and enthusiasm, reflected in a rich
tradition of innovation, re-engineering, productivity and people
retention.
Highlights, 2008-09Possessed a 2,997-member team on direct pay roll and around
3,582 contracted employees (as on March 31, 2009)
Added 400 members in 2008-09 to service its growing
capacity and customer requirements
Maintained a prudent mix of vigour and experience
Sustained employee retention and attendance at rates higher
than industry standards
Strengthened its training based on departmental assessments,
imparted by in-house experts and also external faculty.
Strengthened its performance appraisal framework (employee
rating from 1 to 100 across parameters) linking performance
with incentives.
Road aheadProposed recruitment of about 60 engineers and management
trainees from premier Indian institutions like the National
Institute of Technology (NIT), Jadavpur University, Bengal
Engineering College, Roorkee University, Delhi Engineering
College, the Institute of Chartered Accountants of India and
Indian Institute of Management followed by a month’s
induction training
Proposed annual appraisal by departmental heads based on
KRAs communicated at the year-start
Proposed introduction of a performance-linked incentive
scheme for senior employees
38 | Hindusthan National Glass & Industries Limited
Managing uncertainties at HNGRisk is the uncertainty about events and their possible outcome that can impact performance and prospects. At HNG, our objective
is to reinforce a culture of responsible risk management at all levels and functions so that risks can be estimated, controlled and
countered.
Nature of risk Risk explanation Risk mitigation
Economy risk Slowdown in key downstream sectors The Company caters to multiple sectors (processed food,
could affect demand for the Company’s beverages, beer, liquor, pharmaceuticals and organised retail)
products leading to a diversified income portfolio.
The Company caters to the top 10 companies in respective
sectors, outperforming the industry average
The container glass industry grew 12 percent from Rs. 4,000
cr in 2007-08 to around Rs. 4,500 cr in 2008-09 and this
growth is expected to sustain
Competition risk Growing competition (organised and The Company retained its position as India’s largest container
unorganised players) could affect growth glass player with a market share in excess of 65 percent market
Accelerated bottle light weighting to benefit consumers
Widened the product portfolio to address a broader
client base
Profitability risk Profitability could be affected on The Company improved its average realisations from
account of declining realisations, Rs. 14,678 per tonne in 2007-08 to Rs. 17,127 per tonne
product stagnation or cost increase in 2008-09
Reinforced its culture of product value-addition
Retained its industry cost leadership
Input risk A disruption in quality raw material The Company intends to extend raw material supply contracts
availability at the right price may from three months to a year
affect the Company’s competitive edge Propose to have reasonable inventory for all critical raw
material depending on lead time.
Propose reduction in freight cost by having exclusive
agreements with transporters for movement of raw material.
Strengthening raw material sourcing by widening the vendor
base
Plans to acquire silica mines in the vicinity of its six
manufacturing units
Operation risk Operational inefficiencies could increase The Company reinforced its pioneering industry status
the Company’s cost through the bottle light-weighting technology
Implemented the in-plant narrow-neck-press-and-blow
technology to catalyse light weighting by up to 25-30 percent
Implemented vacuum pumps in production lines, enhanced
productivity, improved quality and reduced energy
consumption
Introduced Japanese technology in reducing job change and
stabilisation time leading to enhanced capacity utilisation
Hindusthan National Glass & Industries Limited | 39
Nature of risk Risk explanation Risk mitigation
Quality risk Inconsistent product quality can lead to The Company possesses ISO 9000:2000 quality certificationclient attrition and is actively pursuing ISO 14000/18000/22000 certifications
Invested in sophisticated laboratories equipped with cutting-edge equipment (atomic absorption spectrophotometer, flamephotometer, ramp pressure tester, vertical load tester, profileprojector, impact tester and automatic thermal shock tester)
Stringent monitoring reduced rejections
Marketing risk The Company may find it difficult to The Company enjoys a decades-rich relationship with itscapitalise on emerging opportunities clients
due to weak marketing Enjoys a 26-nation presence to be increased further in thefinancial year 2009-10
Deepened its global footprint in Europe, Asia and America.
Liquidity risk A liquidity crunch could hamper Reduced debtors’ cycle operations Strengthened creditors’ period optimising working capital use
Sustained the working capital cycle
People risk A lack of skilled professionals could The Company is continuously recruiting new professionals to
affect growth drive its growth
Strengthened training at all levels
Enhanced employee retention to more than 95 percent
Funding risk An inability to mobilise adequate The Company enjoyed a 0.36 debt-equity ratio, considered
low-cost funds may stagger growth adequate to fund prospective expansions
Maintained a Rs. 917.71 cr reserve as on March 31, 2009;free reserves constituted 87.33 percent of the reserves andsurplus balance as on March 31, 2009
Enjoyed a prudent mix of secured and unsecured loans
40 | Hindusthan National Glass & Industries Limited
THE DIRECTORS PRESENT THECOMPANY’S REPORT ON
CORPORATEGOVERNANCE
1. Company’s philosophy on Code of GovernanceWe at HNG believe good Corporate Governance is a pre-requisite
for meeting the needs and aspirations of its shareholders and
other stakeholders in the Company and firmly believe that the
same could be achieved by maintaining a system and process
from which emerges the cornerstones of Company’s governance
philosophy, namely trusteeship, transparency, empowerment
and accountability, control and ethical corporate citizenship. The
practice of each of these creates the right corporate culture that
fulfils the true purpose of Corporate Governance.
During the financial year 2008-09, the Company has kept its
commitment towards the required norms and disclosures on
Corporate Governance under the Listing Agreement executed
with the stock exchanges, in which the shares of the Company
are listed.
2. Board of Directors The Company has formed an active, well-informed Board with
the majority comprising Independent Directors to uphold the
Company’s commitment to high standards of ethical values and
business integrity.
Present composition and size of the Board-
The composition of the Board of Directors as on March 31, 2009
is given below. Out of the total 10 Directors on the Board:
3 are Executive Directors
1 is a Non-Executive Director
6 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 8,
2008 at Rotary Sadan, 94/2, Chowringhee Road, Kolkata 700
020 and the same was attended by all the Directors except
Mr. S.K. Bangur and Dr. I.K. Saha.
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 Director Category of No of Board Directorship in other #No. of committees (Other than that directorship meeting(s) companies of the Company) in which he is
attended incorporated in India^Chairman Member Total
Mr. C. K. Somany (Chairman) 5 9 – 1 1
Non-Executive
Mr. Sanjay Somany (Managing Director) 5 9 – – –
Executive
Mr. Mukul Somany (Jt. Managing 5 10 – – –
Director) Executive
Mr. Kishore Bhimani Independent 4 1 – 1 1
Hindusthan National Glass & Industries Limited | 41
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 Committees of the Board are regularly placed before the
Board.
3. Audit CommitteeTerms 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, replacement or removal of the
Statutory Auditors, Tax Auditors and Internal Auditors of the
Company 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 Directors’ Responsibility
Statement forming a part of the Board’s Report in terms of
Section 217(2AA) of the Companies Act, 1956.
b. Changes, if any, in accounting policies and practices and
reasons for the same.
Name of the Director Category of No of Board Directorship in other #No. of committees (Other than that directorship meeting(s) companies of the Company) in which he is
attended incorporated in India^Chairman Member Total
Mr. S. Bhattacharya Independent 5 1 – – –
Mr. R. K. Daga Independent 5 2 2 – 2
Mr. Dipankar Chatterji Independent 4 7 – 5 5
Mr. S.K. Bangur Independent 3 10 – – –
Dr. I.K. Saha Independent 5 1 – – –
Mr. R. R. Soni Executive Director 2 1 – – –
^excludes directorship of companies formed u/s 25 of the Companies Act, 1956, private limited companies and foreign
companies.
# Membership/Chairmanship of Audit committees and Shareholders’/Investors’ Grievance committees have been considered.
Board meetings held during the year-
During the financial year ended on March 31, 2009, five 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 During the quarter Duration between last Board Meeting
01 May 16, 2008 April’08 – June’08 114 days
02 June 25, 2008 April’08 – June’08 39 days
03 July 25, 2008 July’08 – September’08 29 days
04 October 27, 2008 October’08 – December’08 93 days
05 January 27, 2009 January’09 – March’09 91 days
42 | Hindusthan National Glass & Industries Limited
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 Auditors’ 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 theyear-During the financial year ended March 31, 2009, eight meetings
of the Audit Committee were held and the attendance of each
member of the Committee is given below:
Dates of meetings May 31, 2008, June 25, 2008, July 25, 2008, August 13, 2008,
October 26, 2008, December 16, 2008, January 27, 2009,
February 24, 2009.
Members of the Audit Committee have the requisite financial
and management expertise. The Chairman of the Audit
Committee attended the 62nd Annual General Meeting of the
Company.
4. Remuneration Committee Terms of reference- To formulate and determine the Company’s policy regarding remuneration packages for Executive Directors
including any compensation payments.
Composition, meetings and attendance during the year-
Total Strength of Audit Committee : Three
Designation Members Category No. of No. of
meetings held meetings attended
Chairman Mr. R. K. Daga Non-Executive, Independent Director 8 8
Member Mr. Sujit Bhattacharya Non-Executive, Independent Director 8 7
Member Mr. Dipankar Chatterji Non-Executive, Independent Director 8 8
Total strength of Remuneration Committee : 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
Hindusthan National Glass & Industries Limited | 43
The Remuneration Committee has approved the increase in
remuneration of the Managing Director and Joint Managing
Director in terms of the agreement entered by the Company with
them as agreed by the shareholders of the Company. Further,
the Remuneration Committee has also approved the
remuneration payable to the Executive Director.
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 every year to the Non-
Executive Directors of the Company of Rs. 100,000 or 1 percent
of the net profit for that year (calculated in accordance with the
Provisions of section 309 (5) of the Companies Act, 1956),
whichever is less, subject to the approval of Central Government
as may be required, for the period of 5 years commencing from
April 1, 2007 and ending on March 31, 2012. The commission
for the financial year 2008-09 will be distributed among the said
Directors accordingly.
Details of the remuneration paid to the Directorsduring the financial year 2008-09
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. 2500 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.
The details of sitting fees paid and commission payable for the
financial year 2008-09 are as follows:
(In Rupees)
Directors Business relationship Sitting fees Commission Total
with HNGIL
Mr. C.K. Somany* Promoter 25,000 1,00,000 1,25,000
Mr. Kishore Bhimani None 22,500 1,00,000 1,22,500
Mr. S. Bhattacharya None 60,000 1,00,000 1,60,000
Mr. R.K. Daga None 67,500 1,00,000 1,67,500
Mr. Dipankar Chatterji None 62,500 1,00,000 1,62,500
Mr. S.K. Bangur None 15,000 1,00,000 1,15,000
Late Supriya Gupta None 15,000 1,00,000 1,15,000
Dr. I.K. Saha None 25,000 1,00,000 1,25,000
* 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.
44 | Hindusthan National Glass & Industries Limited
To Executive DirectorsThe details of remuneration paid to Executive Directors as per agreement during the financial year 2008-09 is as follows:
Total strength of the Committee : Four
Designation Members Category No. of No. of
meetings held meetings attended
Chairman Mr. Kishore Bhimani Non-Executive 4 4
Independent Director
Member Mr. R.K. Daga Non-Executive 4 4
Independent Director
Member Mr. Sanjay Somany Executive Director 4 4
Member Mr. Mukul Somany Executive Director 4 4
The dates on which the meetings of the Share Transfer and Shareholders' Grievance Committee were held during the year:
Date of meetings
June 25 , 2008 July 25, 2008 October 27, 2008 January 27, 2009
The Compliance Officer of the Company is Mr. Priya Ranjan who is also the Company Secretary of the Company.
5. Share Transfer and Shareholders’ Grievance Committee Composition, meetings and attendance during the year
(In Rupees)
Break-up remuneration Executive Directors
Mr. Sanjay Somany * Mr. Mukul Somany* Mr. R. R. Soni
Business relationship with HNGIL Managing Director, Jt. Managing Director, Executive Director
Promoter’s family Promoters’ family
Salary 63,48,000 63,48,000 8,25,806
Provident Fund 7,61,760 7,55,268 96,305
Perquisites 43,618 3,22,266 4,75,514
Commission 63,48,000 63,48,000 4,12,903
Total 1,35,01,378 1,37,73,534 18,10,528
* 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 agreements with the Executive Directors is for a period of five years for Mr. Sanjay Somany and Mr. Mukul Somany w.e.f.
October 1, 2005 up to September 30, 2010 and for a period of three years for Mr. R. R. Soni w.e.f. October 27, 2008 up to October
26, 2011; 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. Mr. Sanjay Somany and Mr. Mukul Somany are entitled to a commission of 1% of the net profits subject to a ceiling of their annual
salary. Mr. R. R. Soni is entitled to a commission of 0.5% of the net profits subject to a ceiling of 50% of his annual salary.
c. No stock options is available with the Executive Directors or the employees of the Company.
Hindusthan National Glass & Industries Limited | 45
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 of the Resolutions
by Postal Ballots) Rules, 2001, as and when the occasion arises.
7. Disclosures There are no materially significant related party transactions
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.
Shareholders’ complaints and pending share transferThere were three investor grievance complaints received during the year under review. All the three complaints were resolved and
there are no complaints pending at year ended March 31, 2009.
6. General Body Meetings The details of day, date, venue and time of the last three Annual General Meetings held are as follows:
General Meeting Venue Day and date Time
62nd Annual General Meeting Rotary Sadan, 94/2, Chowringhee Monday, September 8, 2008 10.00 A.M.
Road, Kolkata- 700 020
61st Annual General Meeting Registered Office: Friday, September 14, 2007 11.30 A.M.
2, Red Cross Place, Kolkata- 700 001
60th Annual General Meeting Registered Office: Monday, September 25, 2006 11.30 A.M.
2, Red Cross Place, Kolkata- 700 001
Details regarding Special Resolutions passed during the previous three years are given below:
Shareholders’ meeting Special Business requiring Special Resolution
62nd Annual General Meeting 1. Resolution requiring approval u/s 31 of the Companies Act, 1956 for altering the Article
85 of the Articles of Association of the Company in respect to the number of Directors
of the Company.
2. Resolution requiring approval u/s 314 of the Companies Act, 1956 for holding an office of
profit by the Chairman of the Company in Glass Equipment (India) Limited, a 100%
Subsidiary of the Company.
3. Resolution requiring approval u/s 293(1)(d) of the Companies Act, 1956 and all other
enabling provisions, to grant consent to the Board of Directors of the Company to borrow
sums of money, which may exceed the aggregate for the time being of the paid up capital
of the Company and its free reserves.
4. Resolution requiring approval u/s 293(1)(a) of the Companies Act, 1956 and other
applicable provisions to grant consent to the Board of Directors to mortgage, create
charge(s) and/or hypothecate in addition to the existing mortgage(s), charge(s) and
hypothecation(s).
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 Mr. Bharat
Somany, to hold office or place of profit in the Company.
60th Annual General Meeting None
46 | Hindusthan National Glass & Industries Limited
Related Party Transactions in the ordinary course of business
are reported to the Audit Committee. Such transactions 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 related to
the capital market.
Though there is no formal whistle blower policy, the Company
takes cognizance 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).
During the financial year 2008-09, the Company didn’t make
any public or rights issue.
The Financial Statements for the financial year 2008-09 have
been prepared in accordance with the applicable Accounting
Standards prescribed by The Institute of Chartered Accountants
of India and as required under the Companies (Accounting
Standards) Rules, 2006.
The Managing Director and the Joint Managing Director of
the Company have certified to the Board in accordance with
Clause 49(v) of the Listing Agreement pertaining to CEO/CFO
certification for the financial year ended March 31, 2009.
The Management Discussion and Analysis statement forms
part of this Annual Report.
According to Articles of Associations of the Company, one-
third of the Directors retire by rotation and, if eligible, seek re-
appointed at the Annual General Meeting of the shareholders. As
per Article 90 of the Articles of Association of the Company, Shri.
Kishore Bhimani, Shri. Sujit Bhattacharya and Shri. S. K. Bangur
will retire in the ensuing Annual General Meeting. The Board has
recommended the re-appointment of all the retiring Directors.
The detailed profiles of all these Directors are provided in the
Notice calling the Annual General Meeting of the Company.
8. 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 (normally in The Financial
Express) having wide circulation and another in vernacular
language in Bengali (normally in Dainik Lipi/Arthik Lipi).
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.
9. General shareholder information
Incorporation The Company was incorporated in Calcutta in the Province of Bengal on 23rd
February 1946 (now West Bengal).
Corporate Identification Number (CIN): L26109WB1946PLC013294
AGM: Date, time and venue August 14, 2009; 11.00 AM at Rotary Sadan, 94/2, Chowringhee Road,
Kolkata-700 020
Financial calendar April to March
1st quarter results by 4th week of July
2nd quarter results by 4th Week of October
3rd quarter results by 4th Week of January
4th quarter results by 3rd Week of June of next year
Date of book closure August 7, 2009 to August 14, 2009 (both days inclusive)
Dividend Payment Date August 14, 2009
Listing on stock exchanges
Hindusthan National Glass & Industries Limited | 47
Your Company’s shares are listed on the following stock exchanges:
1] The Calcutta Stock Exchange 2] Bombay Stock 3] National Stock Exchange
Association Ltd Exchange Limited, Mumbai of India Limited
7, Lyons Range, Kolkata-700 001 25, Phiroze Jeejeebhoy Towers, Exchange Plaza, Bandra Kurla
Email: mop@cse-india.com Dalal Street, Mumbai 400 001 Complex, Bandra (E),
Website: www.cse-india.com Email : is@bseindia.com Mumbai- 400 051
Website: www.bseindia.com Email: ignse@nse.co.in
Website: www.nseindia.com
Listing fees Paid for the financial year 2009-10 for all the above Stock Exchanges.
Scrip code/Scrip Symbol – i. 18003 on The Calcutta Stock Exchange Association Ltd., Kolkata
ii. 515145 on Bombay Stock Exchange Limited, Mumbai
iii. HINDNATGLS on National Stock Exchange of India Limited, Mumbai
High / Low share price data
1] According to the data provided by The Calcutta Stock Exchange Association Ltd., Kolkata, there has been no transaction of
the Company’s equity shares during the year under review at the said Stock Exchange.
2] The details of transactions in the Company’s equity shares at the Bombay Stock Exchange Limited, Mumbai during the
financial year 2008-09 and the respective higher / lower price data are as given below:
Month High (Rs.) Low (Rs.) Volume (Shares)
April, 2008 784.70 745.85 33,693
May, 2008 794.20 656.70 27,982
June, 2008 738.65 560.20 28,316
July, 2008 685.55 571.50 32,631
August, 2008 658.75 578.90 22,727
September, 2008 596.60 431.25 17,580
October, 2008 448.70 249.90 17,611
November, 2008 413.55 302.20 14,489
December, 2008 651.65 387.05 32,028
January, 2009 591.85 515.10 13,607
February, 2009 549.70 464.25 9,990
March, 2009 478.00 415.00 8,616
Source: www.bseindia.com
3] The Equity Shares of the Company were listed and admitted for dealing on the National Stock Exchange Limited w.e.f April
15, 2009.
Performance in comparison to broad-based indices such as BSE Sensex
Monthly High & Low at Bombay Stock Exchange (HNG vs. Sensex)
48 | Hindusthan National Glass & Industries Limited
Registrar & Share Transfer Agent In compliance with the SEBI directive, the Company has appointed M/s.
Maheshwari Datamatics Pvt. Ltd., as its Registrar & Share Transfer Agent for all
matters relating to shares both in physical as well as 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: cosec@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.
Distribution of Share Holding and Share Holding Pattern as on March 31, 2009
No. of equity shares held Folios % Shares %
1 to 5000 6411 98.39 2,13,547 1.22
5001 to 10000 47 0.72 36,079 0.21
10001 to 20000 16 0.2455 23,357 0.13
20001 to 30000 3 0.0460 7,400 0.04
30001 to 40000 3 0.0460 10,807 0.06
40001 to 50000 2 0.0307 8,482 0.05
50001 to 100000 2 0.0307 13,382 0.08
100000 and above 32 0.4911 1,71,54,659 98.21
Grand total 6,516 100.00 1,74,67,713 100.00
No. of shareholders in:
Physical mode 51 0.78 69,97,470 40.06
Electronic mode
NSDL 3,864 59.30 1,02,91,614 58.92
CDSL 2,601 39.92 1,78,629 1.02
Total 6,516 100.00 1,74,67,713 100.00
Shareholding pattern as on March 31, 2009
Category No. of shares %
Promoters and associates 1,29,54,068 74.16
Institutions 3,24,262 1.86
Domestic companies 4,23,425 2.42
Resident individuals 37,64,572 21.55
Foreign residents and NRIs 1,385 .01
Trust 1
Total 1,74,67,713 100
Dividend – The Board has recommended dividend @ 50% or Rs. 5 per equity share
Hindusthan National Glass & Industries Limited | 49
Dematerialisation of shares and liquidity
As on March 31, 2009, 1,04,70,243 shares comprising 59.94% of the paid-up capital of the Company are in dematerialised
mode, as compared to 40,45,962 shares as on March 31, 2008. C. K. Somany Group i.e. the promoter of the Company, holds
around 74.16% of the paid-up capital of the Company, of which 59,61,426 shares being 34.13% of paid-up capital are held in
dematerialised mode as on March 31, 2009, as compared to 30,47,401 shares being 27.49% of paid-up capital as on March
31, 2008 and the balance in the physical form at the end of the year March 31, 2009.
Demat ISIN Number for NSDL and CDSL INE 952A01014
Outstanding GDRSs/ADRs/ Warrants or any convertible None
instruments, conversion date and the likely impact on equity.
Plant locations The Company has six plants, located at:
I. 2, Panchu Gopal Bhaduri Sarani, II. Bahadurgarh–124507, Dist: Jhajjar, Haryana.
Rishra-712 248, Dist. Hooghly, West Bengal Phone: (01276) 221400, Fax (01276) 221666
Phone: (033) 2600 0200, Fax (033) 2600 0333
III. 14, RIICO Industrial Area IV. P.O. Virbhadra, Rishikesh - 249201,
Neemrana, Distt. Alwar, Pin - 301705 (Rajasthan) Dist. Dehradun, Uttarakhand
Tel - 01494 - 246712, 513935 Phone: (0135) 2470700, Fax (0135) 2470777
Fax - 01494 - 246713
V. Thondamanatham Village, VI. Nashik Glass Work, F1, MIDC Malegaon,
Vezhudavoor S.O. Pondicherry –605 502 Dist. Sinnar, Nashik - 422113
Phone: (0413) 2677319, Fax (0413) 2677366/2677666 Phone: (025511) 228900, Fax (025511) 228999
Address for correspondence Company Secretary
Hindusthan National Glass & Industries Ltd.
2, Red Cross Place, Kolkata 700 001.
Telephone No. (033) 2254 3100,
Fax No. 033 2254 3130
Email: cosec@hngil.com
E-mail ID for investors’ grievance cosec@hngil.com
B. Non-mandatory requirements under Clause 49 of the Listing Agreement
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.
Independent Directors are appointed on the Board based on their requisite
qualifications and experiences which enables them to contribute effectively to the
Company.
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 comprises Mr. Sanjay Somany, Mr. Mukul Somany,
Mr. R.K. Daga and Mr. Dipankar Chatterji as its members. During the financial year
2008-09, 37 meetings of the Treasury Management Committee were held.
Remuneration Committee The details of the Committee have already been stated at point no 4 of this report.
50 | Hindusthan National Glass & Industries Limited
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 in two newspapers, one in
English and another in vernacular language.
Code of conduct for prevention Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations,
of insider trading. 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 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. SomanyJune 20, 2009 Chairman
DeclarationAll 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 financial year 2008-09 in terms of Clause 49(I)(D)(ii) of the Listing Agreement
with the Stock Exchanges.
Mukul Somany Sanjay SomanyDate: June 20, 2009 Joint Managing Director Managing Director
CertificateThe Members of Hindusthan National Glass & Industries Limited.
We have examined the compliance of the conditions ofCorporate Governance by Hindusthan National Glass &Industries Ltd. for the financial year ended March 31, 2009 asstipulated in Clause 49 of the Listing Agreement of the saidCompany with stock exchanges in India.
The compliance of conditions of Corporate Governance is theresponsibility of the management. Our examination was carriedout in accordance with the guidance note on certification ofCorporate Governance (as stipulated in Clause 49 of the ListingAgreement) issued by The Institute of Chartered Accountants ofIndia, and limited to the procedures and implementationthereof, adopted by the Company for ensuring the complianceof the conditions of Corporate Governance. It is neither an auditnor an expression of the opinion on the financial statements ofthe Company.
In our opinion and to the best of information and explanationsgiven to us and the representations made by the Directors andthe management, we certify that the Company has complied inall material aspects with the conditions of Corporate Governanceas stipulated in the above-mentioned Listing Agreement.
We further state that such compliance is neither an assurance asto the future viability of the Company, nor the efficiency oreffectiveness with which the management has conducted theaffairs of the Company.
For Lodha and Co.(Chartered Accountants)
Kolkata (H.K. Verma)June 20, 2009 Partner
Hindusthan National Glass & Industries Limited | 51
Auditors’ Report
To the Members
We have audited the attached Balance Sheet of HINDUSTHAN
NATIONAL GLASS & INDUSTRIES LIMITED as at March 31, 2009
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 not taken any unsecured loan from
companies covered in the register maintained under
section 301 of the Companies Act, 1956. The total
number of parties is zero and the maximum amount
involved during the year was Rs Nil and at the year-end
there was no outstanding balance of loan. Therefore the
provisions of clause 4(iii) (e) to (g) are not applicable to
the Company.
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
purchase 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
52 | Hindusthan National Glass & Industries Limited
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 lacs or
more in respect of each party have 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 March 31, 2009.
c) According to the information and explanations given to
us, the statutory dues which have not been deposited as
on March 31, 2009 on account of disputes are as under:
Name of the Nature of Dues Amount Period to which Forum where dispute
Statute (Rs in lacs) the amount relates is pending
(Financial year)
The Central Excise Excise Duty 588.50 1995-96, 1996-97, 1997-98, Supreme Court
Act, 1944 2000-01
4.00 2001-02, 2005-06 High Court
602.16 1995-96, 1998-99, 1999-2000, CESTAT
2002-03, 2003-04, 2004-05,
2005-06, 2006-07
127.09 2000-01, 2001-02, 2004-05, Commissioner (Appeals)
2006-07, 2007-08
13.07 1993-96 Assistant Commissioner
The Sales tax Sales Tax 58.59 1996-97, 1997-98, 1998-99, T.T. Tribunal, Dehradun
Act, 1932 1999-00
6.89 2003-04 J.C. (Appeal), Dehradun
Maharshtra Value 114.00 2005-06, 2006-07 Maharshtra Sales Tax Tribunal, Mumbai
Added Tax
Act, 2002
Bombay Sales Tax Sales Tax 51.31 1997-98 Commissioner sales Tax, Pune
Act, 1959
Haryana General Sales Tax 77.52 2002-03 Assessing Authority (Jhajjar)
Sales Tax Act 2.60 2005-06 Dy.Excise & Taxation Commissioner, Haryana
Mines and Minerals 79.85 1993-94 District Collector, Villupuram
Regulation &
Development Act
Hindusthan National Glass & Industries Limited | 53
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.
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) According to the information and explanation given to us,
the Company has created security in respect of debentures
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 28 E of Schedule S regarding
purchase of goods for which central Government approval as
required in terms of provisions of Companies Act, 1956 has not
been obtained by the Company.
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 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 March 31, 2009
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 March 31, 2009 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
Kolkata Partner
June 20, 2009 Membership No: 55104
54 | Hindusthan National Glass & Industries Limited
The Schedules referred to above form an integral part of Balance SheetAs per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director
H. K. Verma Priya Ranjan Nirmal KhannaPartner Company Secretary Sr. Vice President andKolkata Chief Financial OfficerJune 20, 2009
Balance Sheet As at March 31, 2009
(Rs in lacs)
Schedules As at 31.03.2009 As at 31.03.2008
SOURCES OF FUNDS
Shareholders' Funds
Share Capital A 1746.77 1746.77
Reserves and Surplus B 91771.26 84612.65
93518.03 86359.42
Loan Funds
Secured Loans C 41523.81 28742.96
Unsecured Loans D 9210.65 13127.61
50734.46 41870.57
Deferred Tax Liabilities (Net) 4176.71 1807.52
Total 148429.20 130037.51
APPLICATION OF FUNDS
Fixed Assets E
Gross Block 137899.43 125746.20
Less: Depreciation 47251.09 41031.42
Net Block 90648.34 84714.78
Capital Work-in-Progress 8203.39 4510.70
Investments F 10458.46 11458.50
Current Assets, Loans and Advances
Inventories G 21578.47 16414.97
Sundry Debtors H 22718.99 16449.63
Cash and Bank Balances I 1139.97 1678.98
Loans and Advances and Other Current Assets J 19353.09 13654.98
64790.52 48198.56
Less:
Current Liabilities and Provisions
Current Liabilities K 19882.16 14857.67
Provisions L 5789.35 3987.36
25671.51 18845.03
Net Current Assets 39119.01 29353.53
Total 148429.20 130037.51
Significant Accounting Policies and Notes on Accounts S
Hindusthan National Glass & Industries Limited | 55
The Schedules referred to above form an integral part of Profit and Loss AccountAs per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director
H. K. Verma Priya Ranjan Nirmal KhannaPartner Company Secretary Sr. Vice President andKolkata Chief Financial OfficerJune 20, 2009
Profit and Loss Account For the year ended March 31, 2009
(Rs in lacs)
Schedules 31.03.2009 31.03.2008
INCOME
Sales (Gross) M 143859.63 114833.90
Less : Excise Duty 12756.04 12704.21
131103.59 102129.69
Other Income N 2170.07 1113.96
Increase / (Decrease) in Stock O 1145.74 (424.86)
134419.40 102818.79
EXPENDITURE
Materials P 39309.11 29251.61
Manufacturing and Other Expenses Q 71519.14 52100.07
110828.25 81351.68
Profit before Depreciation, Interest and Tax 23591.15 21467.11
Depreciation 7698.07 7293.97
Transferred From Revaluation Reserve (223.55) (281.21)
7474.52 7012.76
Interest and Finance Expenses R 4344.88 2346.87
11819.40 9359.63
Profit before Tax 11771.75 12107.48
Less : Provision for Income Tax
- Minimum Alternate Tax 1310.00 1367.57
- Less: MAT Credit Entitlement (355.00) 955.00 (1367.57) –
- Fringe Benefit Tax 50.00 36.90
- Deferred Tax – (2663.49)
- Income Tax for Earlier years (7.87) (1299.82)
Profit after Tax 10774.62 16033.89
Add : Balance brought forward from last year 1072.00 705.57
Amount available for Appropriation 11846.62 16739.46
APPROPRIATIONS
General Reserve 7000.00 14850.00
Debenture Redemption Reserve 1250.00 –
Proposed Dividend on Equity Shares 873.39 698.71
Tax (including cess) on Proposed Dividend 148.43 118.75
Balance carried to the Balance Sheet 2574.80 1072.00
11846.62 16739.46
Basic and Diluted Earning Rs per Share 61.68 91.79
(Refer Note No. 10 of Schedule ‘S’)
Significant Accounting Policies and Notes on Accounts S
56 | Hindusthan National Glass & Industries Limited
Cash Flow Statement For the year ended March 31, 2009
As per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director
H. K. Verma Priya Ranjan Nirmal KhannaPartner Company Secretary Sr. Vice President andKolkata Chief Financial OfficerJune 20, 2009
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 Year’s figures have been regrouped wherever necessary to conform to the Current Year.
(Rs in lacs)
2008-09 2007-08
A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before Tax and extraordinary items 11771.75 12107.48Adjustments to reconcile profit before tax to cash provided by operating activities.Depreciation 7474.52 7012.76Bad Debts & Provision for Doubtful debts 205.54 239.25Provision for loss in value of current investment 0.04 0.17Interest expenses (Net) 4344.88 2346.87Dividend income (166.71) (0.27)Liability no longer required written back (514.97) (95.92)Interest received (497.22) (120.29)(Profit) / Loss on sale of Fixed Assets (Net) 133.70 61.45(Profit) / Loss on sale of current Investments (Net) (119.10) (8.15)Operating Profit before working capital changes 22632.43 21543.35Changes in current assets and liabilitiesLoans and advances (181.44) (4974.99)Trade and other receivables (6474.90) (4056.07)Inventories (5163.50) (441.64)Trade and other payables 4125.48 4316.59Net Cash Generated by Operating Activities 14938.07 16387.24Adjustments for :Direct Taxes paid (1349.04) (115.16)Fringe Benefit Tax paid (41.33) (36.75)Net Cash from Operating Activities 13547.70 16235.33
B. CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Fixed Assets and changes in capital work in progress (16838.18) (13016.03)Proceeds on Disposal of Fixed Assets 679.21 161.13Purchase of Long Term Investments – (4367.93)Sale of Long Term Investments – 42.93Purchase of Current Investments – (5794.44)Sale of Current Investments 1119.10 5802.59Share Application Money (3500.00) –Dividend received 166.71 0.27Interest received 234.21 34.57Net Cash from Investing Activities (18138.95) (17136.91)
C. CASH FLOW FROM FINANCING ACTIVITIESProceeds / (Repayment) from long term borrowings (Net) 17041.95 812.38Proceeds / (Repayment) from short term borrowings (Net) (8178.06) 3116.52Interest paid (3994.49) (2331.38)Dividend Paid during the year including Corporate Dividend Tax (817.16) –Net Cash from Financing Activities 4052.24 1597.52Net changes in Cash and Cash equivalents (539.01) 695.94Opening Cash and Cash equivalents 1678.98 983.04Cash and Cash equivalents at the end of the year 1139.97 1678.98(represents cash in hand and bank balances)
Hindusthan National Glass & Industries Limited | 57
Schedules forming part of the Accounts
31.03.2009 31.03.2008
Authorised51,15,00,000 Equity Shares of Rs 10/- each (Previous Year 51,15,00,000 Shares of Rs 10/-each) 51150.00 51150.00
51150.00 51150.00Issued, Subscribed and Paid-Up1,74,67,713 (Previous Year 1,10,43,368) Equity shares of Rs 10/- each fully paid up of which 1746.77 1104.34
58,10,360 Shares of Rs 10/- each were allotted as fully paid up Bonus Shares by capitalisation of General Reserve and 64,24,345 Equity Shares of Rs 10/- each issuedas fully paid up pursuant to a scheme of amalgamation and arrangement for consideration other than cash.Share Suspense Account (pending allotment pursuant to the scheme of arrangement) – 642.43
1746.77 1746.77
Schedule – A SHARE CAPITAL
Schedule – B RESERVES AND SURPLUS
(Rs in lacs)
Notes 31.03.2009 31.03.2008
I) 12.75 % Redeemable Non Convertible DebenturesPrivately placed with Life Insurance Corporation of India Limited 1 and 2 10000.00 –
II) Rupee term LoansFrom Financial Institution- Export Import Bank of India 2 5304.17 6327.78From Banks- State Bank of India 2 and 3 5996.00 2432.00- The Honkong & Shanghai Banking Corporation Limited 4 9437.50 4562.50
III) Foreign Currency LoansFrom Banks- The Honkong & Shanghai Banking Corporation Limited - PCFC – 599.16- ICICI Bank Limited - External Commercial Borrowing 2 1929.38 2005.50
IV) Working Capital Loans From Banks 5 8233.70 12494.80V) Loans under Vehicle Finance Scheme
From Banks 6 449.07 293.05From Others 6 136.43 7.13
VI) Interest accrued and due 37.56 21.0441523.81 28742.96
Notes:1) 12.75% Secured Non Convertible Debentures amounting to Rs 100 crores, privately placed (alloted on 22.12.2008) are due for
Schedule – C SECURED LOANS
31.03.2009 31.03.2008
General ReserveAs per last Balance Sheet 59385.25 16500.01Add/Less adjustment as referred to in note no 31(a) of Schedule "S" 7000.00 66385.25 42885.24 59385.25Revaluation ReserveAs per last Balance Sheet 10601.57 3388.73Add/Less adjustment as referred to in note no 31(b) of Schedule "S" 225.02 10376.55 7212.84 10601.57Debenture Redemption ReserveAdd/Less adjustment as referred to in note no 31(c) of Schedule "S" 1250.00 –Share PremiumAs per last Balance Sheet 13553.84 1104.30Add/Less adjustment as referred to in note no 31(d) of Schedule "S" 2369.18 11184.66 12449.54 13553.84Profit and Loss AccountSurplus as per Profit and Loss Account 2574.80 1072.00
91771.26 84612.65
58 | Hindusthan National Glass & Industries Limited
Schedules forming part of the Accountsredemption at par in three equal installments at the end of 5th, 6th and 7th year from the date of allotment with put/call option at parat the end of 3rd year from the date of allotment.
2) The loans/debentures are secured by first charge ranking pari-passu with other first charges created on all immovable properties by wayof 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.
3) These loans are also collaterally secured by second charge on Current Assets of the said plants.
4) The loans are secured by first charge ranking pari-passu with other first 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 Rishikesh, Pondicherry andNashik Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.
5) This is secured by hypothecation of inventories (both present and future) and book debts and second charge on all immovables, moveableproperties including land and building in favour of consortium bankers led by State Bank of India.
6) These are secured by hypothecation of the vehicles financed in favour of respective lenders.
Note: ** Represents Mibor linked Non-Convertible Debentures privately placed with LIC Mutual Fund (previous year with JM Mutual Fund)
31.03.2009 31.03.2008
a) Short Term LoansFrom Banks 5000.00 8555.45Non Convertible Debentures * 2500.00 3000.00From Others – 27.04
b) Trade Deposits 100.10 100.10c) Sales Tax Deferment Loan 1610.55 1445.02
9210.65 13127.61
Schedule – D UNSECURED LOANS
(Rs in lacs)
GROSS BLOCK DEPRECIATION NET BLOCK
Particulars Book Value at Additions Deductions/ Book Value at Upto For the Deductions/ Upto As on As on
01.04.2008 Adjustments 31.03.2009 01.04.2008 Year Adjustments 31.03.2009 31.03.2009 31.03.2008
Land 12222.72 28.03 – 12250.75 – – – – 12250.75 12222.72
Leasehold Land 2009.07 39.29 – 2048.36 5.60 13.03 – 18.63 2029.73 2003.47
Buildings 13372.09 335.36 (49.77) 13757.22 2459.09 426.07 – 2885.16 10872.06 10913.00
Leasehold Building 9.18 – – 9.18 0.18 0.16 – 0.34 8.84 9.00
Plant and Machinery 96038.73 13122.23 2102.97 107057.99 37753.26 7000.44 1359.38 43394.32 63663.67 58285.47
Furniture and Fixtures 349.01 40.32 82.79 306.54 149.38 17.63 3.62 163.39 143.15 199.63
Office and Other
Equipments 375.47 50.66 11.09 415.04 194.07 41.22 11.10 224.19 190.85 181.40
Vehicles 1287.34 572.98 145.70 1714.62 436.03 166.73 104.30 498.46 1216.16 851.31
Computer Software 82.59 257.14 – 339.73 33.81 32.79 – 66.60 273.13 48.78
Total 125746.20 14446.01 2292.78 137899.43 41031.42 7698.07 1478.40 47251.09 90648.34 84714.78
Previous Year 106960.85 20659.67 1874.32 125746.20 35328.45 7293.96 1590.99 41031.42 84714.78
Schedule – E FIXED ASSETS
Hindusthan National Glass & Industries Limited | 59
Schedules forming part of the Accounts
Face Value (Rs.) Nos. 31.03.2009 31.03.2008
A) Long TermTradeFully Paid-up Equity SharesUnquotedCapexil Agencies Ltd. 1000 5 0.05 0.05Ceramic Decorators Ltd. 10 7 – -AssociateHNG Float Glass Ltd. 10 42010000 4201.00 4201.00Other Than Trade Unquoted Units of CAN FMP 13M-SRI (Close ended) – 1000.00Fully Paid-up Equity SharesThe Calcutta Stock Exchange Association Ltd. 1 8364 167.28 167.28Beneficial Interest in Shares held in HNG Trust 7.55 7.55Beneficial Interest in Shares held in Ace Trust 6009.35 6009.35In Subsidiary CompaniesGlass Equipment (I) Ltd. 100 26400 55.82 55.82Quality Minerals Ltd. 100 9384 9.38 9.38Government Securities Unquoted Deposited with Government Authorities * a) 12 Years National Savings Certificate 0.01 0.01b) 7 Years National Savings Certificate 0.01 0.01c) 6 Years National Savings Certificate 6.49 6.49
B) Current Other Than Trade Quoted Kajaria Ceramics Ltd. 2 5470 1.52 1.56Total 10458.46 11458.50
* Rs 0.42 lacs since matured but not encashedAggregate book value of Unquoted Investments 10456.94 11456.94Aggregate book value of Quoted Investments 1.52 1.56Aggregate market value of Quoted Investments 1.52 1.56
Schedule – F INVESTMENTS
(Rs in lacs)
(As valued and certified by the Management)Raw Materials 4388.25 2615.54Stores and Spare parts (Including in transit Rs 238.94 lacs, Previous year Rs 560.02 lacs.) 9257.55 7229.13Packing Materials 640.44 423.81Stock-in-Process 302.15 409.76Finished Goods 6990.08 5736.73
21578.47 16414.97
Schedule – G INVENTORIES
(Unsecured, considered good unless otherwise stated)Debts due for a period exceeding six months
Considered good 2733.33 939.30Considered doubtful 863.04 991.53
3596.37 1930.83Less: Provision for doubtful debts 863.04 991.53
2733.33 939.30Other Debts 19985.66 15510.33
22718.99 16449.63
Schedule – H SUNDRY DEBTORS
60 | Hindusthan National Glass & Industries Limited
Schedules forming part of the Accounts
31.03.2009 31.03.2008
Cash Balance on hand 29.51 29.19Cheques in hand 253.89 1078.26Balances With Scheduled Banks
in Current Accounts 834.96 513.85in Margin Money Accounts* – 40.03in Fixed Deposit Accounts* 21.61 17.65
*(Receipts pledged with the banks and Government authorities for Rs 21.61 lacs, Previous year Rs 57.18 lacs)1139.97 1678.98
Schedule – I CASH AND BANK BALANCES
(Rs in lacs)
(Unsecured and Considered good)Loans To Bodies Corporate 3049.50 4724.00Advances recoverable in cash or in kind or for value to be received 2366.80 2059.23(Net of doubtful advances Rs 238.02 Lacs Previous year Rs 240.65 Lacs)Share Application Money 3500.00 –VAT Credit (Inputs) Account 593.85 613.24Advance Income Tax 4390.01 2866.40Tax Deducted at Source 364.10 175.80Advance Fringe Benefit Tax 79.41 37.66MAT Credit Entitlement 1722.57 1367.57Deposits and balances with Government Authorities and Other Departments 2894.55 1581.33Other Deposits 15.08 132.37
18975.87 13557.60Other Current AssetsInterest accrued on Investments 2.35 1.79Interest Receivable 352.70 85.35Fixed Assets held for disposal (at lower of net book value or estimated net realisable value) 22.17 10.24
19353.09 13654.98
Schedule – J LOANS AND ADVANCES AND OTHER CURRENT ASSETS
Sundry CreditorsDues to Micro, Small and Medium Enterprises 68.34 55.68Others 15546.68 13174.26
Subsidiary Companies 842.63 715.29Interest accrued but not due on Loans 454.64 104.25Commission to Directors 139.09 118.40Other Liabilities 2830.46 689.77Unclaimed dividend * 0.32 0.02* This is not due for payment to Investor Education & Protection Fund.
19882.16 14857.67
Schedule – K CURRENT LIABILITIES
For Taxation 3421.27 2111.27For Gratuity and Unavailed Leave 1257.76 1020.55For Fringe Benefit Tax 88.50 38.08For Proposed Dividend 873.39 698.71For Tax on Proposed Dividend 148.43 118.75
5789.35 3987.36
Schedule – L PROVISIONS
Hindusthan National Glass & Industries Limited | 61
Schedules forming part of the Accounts
31.03.2009 31.03.2008
Finished Goods 143727.31 113962.18General Merchandise Sale 76.95 163.03Others 55.37 708.69
143859.63 114833.90Less: Excise Duty 12756.04 12704.21
131103.59 102129.69
Schedule – M SALES
(Rs in lacs)
Raw Materials Consumed 39252.14 29059.45Purchase of Trading Material 56.97 192.16
39309.11 29251.61
Dividends On Long Term Investments - other than trade 166.71 0.26Dividends On Current Investments - other than trade – 0.01Interest on- Loan 428.47 41.95- Deposits 48.60 18.88- Investments 0.62 0.07- Others 2.21 0.21- Tax Refunds 17.32 –Rent 39.93 34.38Hire charges 17.20 40.54Insurance Claims 9.62 1.98Miscellaneous Receipts 789.64 475.15Liabilities/ provisions no longer required written back 514.97 95.92Profit on Assets Sold/Discarded 15.68 15.10Profit on sale of Current Investments - other than trade 119.10 8.15Income from Derivatives – 71.29Foreign Exchange Fluctuation (Net) – 310.07
2170.07 1113.96
Closing StockFinished Goods 6990.08 5736.73Work-in-Process 302.15 409.76
7292.23 6146.49Less :Opening StockFinished Goods 5736.73 4596.97Add: Vested pursuant to Scheme of Amalgamation 1648.06 6245.03Work-in-Process 409.76 272.60Add: Vested pursuant to Scheme of Amalgamation 53.72 326.32
6146.49 6571.35Increase / (Decrease) 1145.74 (424.86)
Schedule – N OTHER INCOME
Schedule – O INCREASE / (DECREASE) IN STOCK
Schedule – P MATERIALS
62 | Hindusthan National Glass & Industries Limited
Schedules forming part of the Accounts(Rs in lacs)
Schedule – Q MANUFACTURING AND OTHER EXPENSES
31.03.2009 31.03.2008
Stores and Spare Parts Consumed 7802.50 5767.83Power and Fuel 36840.99 27187.58Packing Material Consumed and Packing Charges 9123.08 7605.62Salaries, Wages and Bonus 5478.70 4270.50Contribution to Provident and other Funds 740.82 722.79Workmen and Staff Welfare Expenses 370.79 420.24Rent 93.43 95.43Rates and Taxes 43.21 57.83Repair and Maintenance :
Buildings 186.95 132.87Plant and Machinery 927.70 1104.51Others 238.18 209.78
Freight outwards, transport and other selling expenses 1232.83 1003.38(Net of Realisation Rs 1214.21 lacs, Previous Year Rs 983.56 lacs)Commission on Sales 140.78 116.10Insurance 151.95 147.45Charity and Donation 40.93 31.00Bad Debts/Advances written off 265.23 185.81Less: Provision for Doubtful Debts / advances written back 265.16 0.07 195.92 (10.11)Provision for Doubtful Debtors/Advances 205.47 249.36Excise Duty on Stock (179.91) (28.13)Directors' Remuneration 298.85 244.99Provision For Loss on Derivative Transaction 1833.05 313.94Loss on sale/discard of fixed assets 149.38 76.55Provision for Diminution in value of Current Investments 0.04 0.17Foreign Exchange Fluctuation (net) 2326.33 –Miscellaneous Expenses 3473.02 2380.39
71519.14 52100.07
31.03.2009 31.03.2008
On Debentures 429.13 569.50On Term Loans 2570.41 1510.40Bank and Others 949.60 135.19Finance Expenses 395.74 131.78
4344.88 2346.87
Schedule – R INTEREST AND FINANCE EXPENSES
Schedules forming part of the Accounts
1. Significant Accounting Policiesa. Accounting Convention
The accounts, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been prepared on thebasis of the historical cost and on the accounting principles of a going concern. The accounts have been prepared in accordance withthe provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (Accounting Standards) Rules, 2006.
b. Use of EstimatesThe preparation of financial statements require management to make estimates and assumption that affect the reported amountof assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reportedamounts of income and expenses during the year. Difference between the actual results and the estimates are recognised in the yearin which the results are known /materialised.
c. Fixed AssetsFixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have been revaluedor at fair value as the case may be.
d. Depreciation and AmortisationTangible Assetsi. Depreciation except otherwise stated has been provided at the rates specified under Schedule XIV to the Companies Act, 1956
on assets installed/acquired up to March 31, 1990 on written down value method and in respect of additions thereafter onstraight line method.
ii. Certain Plant and Machinery have been considered as continuous process plant as defined under Schedule XIV to the CompaniesAct, 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 estimatedby 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 Assetsvi. Computer Softwares are amortised on straight line method @33.33% over a period of three years.
e. ImpairmentFixed 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 assetsbelonging to Cash Generating Unit (CGU) exceeds recoverable amount. The recoverable amount is the greater of assets net sellingprice or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to theirpresent value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such losseither no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets,which in case of CGU, are allocated to its assets on a prorata basis.
f. InvestmentsLong Term Investments are stated at cost, less provision for diminution in value other than temporary, if any. Current Investmentsare valued at cost or fair value whichever is lower.
g. InventoriesInventories 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 includes the taxes and duties other than those recoverable from taxing authorities and otherexpenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost includes manufacturingexpenses 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 primecost, factory and general overheads and the same are classified as stores and spare parts under inventories.
h. Foreign Exchange Transactions and DerivativesTransactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currencymonetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon and also on the
Hindusthan National Glass & Industries Limited | 63
Schedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
64 | Hindusthan National Glass & Industries Limited
exchange differences on settlement of the foreign currency transaction during the year are recognised as income or expenses in theProfit and Loss Account.
Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency risk onunexecuted firm commitments or of highly probable forecast transactions are recognised in the period in which they arise and thedifference between the forwards rate and exchange rate at the date of transaction is recognised as income/expense over the life ofthe contract.
Keeping in view the announcement of “The Institute of Chartered Accountants of India” dated March 29, 2008 regarding accountingfor derivatives, mark to market losses on all other derivatives contracts (other than forward contracts dealt as above) outstandingas at the year end, are recognised in the accounts.
i. Revenue Recognitioni) All Expenses and Incomes are accounted for on mercantile basis except otherwise stated.
ii) Income from Export Incentives, Insurance and other claims etc. is recognised on the basis of certainties as to its utilisation andrelated 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) CreditCenvat / VAT credit whenever availed on Fixed Assets is set off with the cost of the assets. Other Cenvat / VAT credit wherever availedis adjusted with the cost of purchases of Raw Material or Stores as the case may be.
k. Employee BenefitsEmployee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Plan for itsemployees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fund which arefully funded and administered by the Trustees / Government. The Company contributes to the Employees’ Pension Scheme, 1995for certain categories of employees. Contributions are recognised in the Profit and Loss account on accrual basis.
Long-term employee benefits under defined benefit scheme such as gratuity, leave encashment etc. are determined at the close ofeach 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 DevelopmentRevenue Expenditure on Research and Development is charged to the Profit and Loss Account in the year in which it is incurred.
m. Subsidies and GrantsCash Subsidy related to Fixed Assets to the extent received is adjusted to the cost of respective fixed assets. Subsidy related to thetotal investment in the project is treated as Capital Reserve. Other Government grants including incentives etc. are credited to Profitand Loss Account or deducted from the related expenses.
n. Borrowing CostBorrowing costs that are attributable to the acquisition/construction of Fixed Assets are capitalised as part of the cost of respectiveassets. Other borrowing costs are recognised as an expense in the year in which they are incurred.
o. Income TaxProvision for Tax is made for current tax, deferred tax and fringe benefit taxes. Current tax is provided on the taxable income usingthe applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capableof reversal in subsequent periods are recognised using tax rates and tax laws, which have 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 beavailable 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 futuretaxable profits.
p. LeaseWhere the Company is the lessee, finance leases, which effectively transfer to the Company substantially all the risks and benefitsincidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of the minimum leasepayments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Hindusthan National Glass & Industries Limited | 65
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 asoperating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis overthe lease term.
q. Provision, Contingent Liabilities and Contingent AssetsProvisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a resultof past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosedin the financial statements. Contingent Liabilities, if material are disclosed by way of notes.
Schedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
NOTES ON ACCOUNTS
Schedules forming part of the Accounts
2008-09 2007-08
2) Contingent liabilities not provided fora) Outstanding Bank Guarantees / Letter of Credit 6410.93 1384.86b) Income Tax matter in respect of erstwhile AGCL under dispute Nil 3.41c) Sales Tax matter under appeals 216.88 214.25d) Excise Duty and Octroi demand issued against which the Company has preferred appeals
and which in the opinion of the management are not tenable. 1639.10 1703.25e) Cases pending with labour courts (to the extent ascertainable) 544.44 549.59f) 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 theSupreme Court against the order of the High Court. 0.30 0.30
g) Amount of duty against Export Obligation in respect of exemption availed againstAdvance License Scheme. 19.19 4.32
h) Other Claims against the Company not acknowledged as debt. 105.91 26.10i) Counter Guarantee furnished to Government and other authorities on behalf of Glass
Equipment (India) Ltd. (Subsidiary Company) – 381.00Notes :On the basis of current status of individual cases and as per the legal advice obtained, wherever applicable the management is of the view that no provision is required in respect of these cases. Further Cash outflow in respect of item no. b) to h) as mentioned aboveis dependent upon outcome of final judgment/decision.
3) In respect of Neemrana Plant a notice has been received from Civil Court filed by the Nil Nilcreditors of Haryana Sheet Glass Limited demanding their outstanding payments and stating that plant can not be transferred unless their dues are paid. However, the matter is under dispute/litigation.
4) Capital commitments (Net of advance of Rs 1319.85 lacs previous year Rs 356.46 lacs) 10431.39 1212.885) Capital work in progress includes pre-operative expenses pending allocation.
a) Salary and Wages Nil 23.99b) Power and Fuel 11.24 23.02c) Miscellaneous expenses 150.80 31.21d) Interest on Term Loan 180.16 239.25Add: Brought Forward from previous year 413.97 163.97Less: Capitalised 756.17 67.47Total Carried Forward Nil 413.97Capital work in progress includes Rs 714.75 Lacs on account of advances and Rs 5804.27 lacs on account of equipments/materials procured.
(Rs in lacs)
66 | Hindusthan National Glass & Industries Limited
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
6) Fixed Assets at Nashik Plant are estimated to have lower residual lives than that envisaged as per the rates provided in Schedule XIV ofthe Companies Act, 1956. Depreciation has been provided based on the estimated shorter residual lives as follows:
Particulars of Fixed Assets Rates as Rates ofprescribed by Depreciation on
Schedule XIV to assets appliedthe Companies
Act, 1956
Buildings (other than factory buildings) 1.63 2.04Factory Buildings 3.34 5.21Plant and Machinery
Used for single shift operations 4.75 11.44Continuous Process Plant 5.28 11.44Used for Triple Shift operations 10.34 11.44
Furniture & Fixtures 6.33 17.37Computers 16.21 17.95
2008-09 2007-08
7) i) Land and Buildings of Rishra and Bahadurgarh units were revalued by an approved 10891.99 10891.99valuer on April 1, 1992 and on March 31, 2006 on current replacement cost basis. Accordingly, net amount transferred to Revaluation Reserve Account.
ii) Plant and Machinery of Rishra and Bahadurgarh units were revalued by an approved 4831.31 4831.31valuer, on April 1, 1995 on current replacement cost basis. Accordingly, net amount transferred to Revaluation Reserve Account.
iii) Depreciation transferred from Revaluation Reserve Account to Profit and Loss Account. 223.55 281.21
(Rs in lacs)
2008-09 2007-08
a) Payment to Statutory Auditors:*i) Audit Fees 5.00 9.00ii) Tax Audit Fees 1.50 1.50iii) Management Services and Certification work 5.04 2.00iv) Reimbursement of Expenses 0.40 2.48
b) Payment to Branch Auditors*i) Audit Fees 4.00 Nilii) Management Services and Certification work 2.31 Niliii) Reimbursement of Expenses 2.99 Nil* excluding Service Tax
c) Directors Travelling Expenses 30.15 33.47
8) Miscellaneous Expenses include
2008-09 2007-08
9) Sundry Creditor include acceptances 4388.48 392.14
Hindusthan National Glass & Industries Limited | 67
Schedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Schedules forming part of the Accounts
2008-09 2007-08
Profit after Tax (Rs in lacs) 10774.62 16033.89Number of shares outstanding 17467713 17467713Earning per share (Basic) (Rs.) 61.68 91.79
10) Earning per share
2008-09 2007-08
Profit before tax as per Profit and Loss Account 11771.75 12107.48Add: Directors' Remuneration 159.77 126.59
Executive Directors’ Commission 131.08 110.40Non Executive Directors' Commission 8.00 8.00
Total 12070.60 12352.47Profit under Section 198 of the Companies Act, 1956. 12070.60 12352.47Commission Payablea) To the Managing Director @ 1.00% of Net Profit restricted to Annual Salary 63.48 55.20b) To the Joint Managing Director @ 1.00% of Net Profit restricted to Annual Salary 63.48 55.20c) To the Executive Director @ 0.50% of Net Profit restricted to Annual Salary 4.13 Nild) To the Non Executive Directors @1.00% of Net Profit restricted to Rs 1.00 lac per Director 8.00 8.00
(Previous Year Rs 1.00 lac per Director)
11) Computation of Net Profit in accordance with Section 198 of the Companies Act, 1956 and Commission payable to Directors
2008-09 2007-08
i) Salaries 139.23 110.40ii) Contribution to Provident and Other Funds 16.23 13.25iii) Other Perquisites 4.31 2.94iv) Commission 139.09 118.40
12) Directors' Remuneration include:
13) Financial and Derivative Instruments:a) The Company had entered into certain derivative transactions, the cash flows arising therefrom being recognised in the books of
account as and when the settlements took place in accordance with the terms of the respective contracts over the tenure thereof.However, in pursuance of announcement dated March 29, 2008 of “The Institute of Chartered Accountants of India” on “Accountingfor derivatives” and as a matter of prudence:
i) mark to market loss on account of derivative transaction as on March 31, 2009 estimated to be Rs 510.46 lacs out of which Rs 313.94 lacs has been provided in previous year and balance has been accounted during current year.
ii) in respect of another derivative contract in respect of which the claim raised was at Rs 404.18 lacs as on March 31, 2008 hasceased to exist on November 19, 2008 and Knock Out intimation has since been received during the year. The Claim raised onthe Company interalia including on account of daily range accrual as on March 31, 2009 estimated to be Rs 1636.53 lacsincluding interest has been provided for during the year.
The matters are subjudice and the Company has been legally advised that these contracts are void ab- initio.
2008-09 2007-08
b) Outstanding derivative instruments 510.46 3993.25c) Foreign currency exposure outstanding as on March 31, 2009 whish has not been
hedged by the derivative instruments:Loans – 9297.11Creditors 3203.02 1779.73Debtors 208.72 1069.01
d) The amount of Exchange Gain/(Loss) of Foreign Currency Transaction adjusted to 362.40 310.07respictive heads of accounts of the Profit and Loss Account
(Rs in lacs)
68 | Hindusthan National Glass & Industries Limited
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
15) Prior Period item aggregating Rs 448.03 lacs (previous year Rs Nil) has been booked under the head Miscellaneous expenditure in theProfit and Loss Account. Pursuant to the Scheme of Amalgamation and Re-organization of Capital (the Scheme) under Section 391 to394 of the Companies Act, 1956, with effect from April 1, 2006, (the appointed date), Ace Glass Containers Limited (AGCL) had mergedwith the Company in the previous year. In terms of the Scheme, all fixed assets were recorded at the fair values as of the appointed date.While recording such assets in the books in the previous financial year, the value of certain assets were overstated / understated. Theseassets have now been restated in current year at their appropriate value by decreasing an amount of Rs 527.77 lacs in the value of fixedassets and prior period income adjustment by Rs 79.74 lacs in respect of discarded assets.
16) The following expenses, incurred on manufactured Moulds have been capitalised and netted from the respective heads of accounts inthe Profit and Loss Account.
2008-09 2007-08
Stores and Spares parts consumed 429.76 399.16Power and Fuel 29.27 26.44Salaries, Wages and Bonus 95.93 81.15Contribution to Provident and other funds 5.55 5.78Workman and Staff Welfare Expenses 3.69 3.42Repair and Maintenance – Machinery 2.40 1.17Repair and Maintenance – Others 115.64 95.68Miscellaneous Expenses 11.47 10.70Total 693.71 623.50
(Rs in lacs)
17) a) The breakup of Deferred Tax Assets and Deferred Tax Liabilities is as given below:
b) In terms of Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 as sanctioned by the Hon’ble High Courtof Calcutta vide its Order dated April 7, 2008 and by Hon’ble High Court at Delhi vide its Order dated March 19, 2008, deferred taxliability of Rs 2369.18 lacs for the year has been adjusted to Share Premium Account.
c) The Company has provided for Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and accordingly, based onevidences MAT Credit of Rs 355.00 lacs (previous year Rs 1367.57 lacs) has been recognised in these accounts.
d) Provision for Income Tax has been made after considering the set off of unabsorbed depreciation and brought forward business lossof erstwhile Ace Glass Containers Limited merged with the Company with effect from April 1, 2006.
Opening as on (Charge)/ Credit Closing as at 01.04.2008 during the year 31.03.2009
Deferred Tax AssetsBrought Forward Losses and unabsorbed depreciation 1956.04 (1956.04) –Expenses Allowable on Payment Basis 396.12 274.60 670.72Provision for Loss on Derivative transactions 106.71 623.06 729.77Provision for doubtful debts 347.69 (54.45) 293.24Total Deferred Tax Assets 2806.56 (1112.83) 1693.73Deferred Tax LiabilitiesDepreciation 4614.08 1256.35 5870.44Total Deferred Tax Liabilities 4614.08 1256.35 5870.44Net Deferred Tax Liabilities (1807.52) (2369.18) (4176.71)
2008-09 2007-08
14) a) Electricity duty waiver benefit under State Incentive Schemes and subsidy received 108.76 81.78 under State Incentive has been credited to Power and Fuel Account.
b) Interest subsidy towards Interest on Term Loan receivable under State Investment 75.21 –Promotion Policy has been adjusted with Interest on Term Loan paid.
c) Amount included in VAT Credit Inputs Account shown under Loans and Advances can be 515.23 411.40 utilised only after repayment of corresponding amount of Sales Tax Deferred Loan. Thebalance amount of Rs 78.62 lacs (Previous year Rs 201.84 lacs) is available for utilisation.
Hindusthan National Glass & Industries Limited | 69
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Outstanding as Maximumon 31.03.2009 balance
Outstandingduring the year
1) No interest or interest below the rates specified in Section 372A of Companies Act, 1956* 19.76 40.092) Repayment beyond seven years or no repayment schedule NIL NIL3) Repayment on Demand 19.76 40.094) Loan to Associates NIL NIL5) Investment by Associates NIL NIL
18) Disclosure pursuant to Clause 32 of Listing Agreement
* 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 beenconsidered.
19) The Company has incurred Rs 38.26 Lacs (Previous year Rs 7.91 lacs) on account of Research and Development expenses, which has beencharged to Profit and Loss Account.
20) As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard aregiven below:
Defined Contribution SchemeContribution to Defined Contribution Plan, recognised for the year are as under:
Employer’s Contribution to Provident Fund 205.68Employer’s Contribution to Pension Fund 235.76Employer’s Contribution to Superannuation Fund 16.29
(Rs in lacs)
The guidance note on implementing Accounting Standard (AS-15) (Revised 2005) on Employees Benefits issued by Accounting StandardBoard (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be made by the employersneeds to be treated as “Defined Benefit Plan”. According to the management, in consultation to the actuary, it is not practical or feasibleto actuarially value the Provident liability in the absence of any guidance from Actuarial Society of India and also due to the fact thatthe rate of interest as notified by the Government can vary annually. Accordingly, the Company is currently not in a position to provideother related disclosures as required by the aforesaid AS – 15 read with ASB guidance. However, with regard to the position of the fundand confirmation to the Trustees of such fund, there is no shortfall as at year-end.
Defined Benefit PlanThe employees’ gratuity fund scheme managed by Birla Sun Life Insurance is a defined benefit plan. The present value of obligation isdetermined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving riseto additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation forleave 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 thereofare as follows:
Gratuity Gratuity Leave Encashment Funded Unfunded Unfunded
Liability at beginning of the year 619.29 726.88 198.01Current Service Cost 53.44 66.83 26.02Interest Cost 44.23 57.78 16.74Actuarial (Gain) / Loss 68.53 (98.01) 29.93Benefits paid 59.21 (35.86) (0.23)Liability at the end of the year 726.27 717.61 246.17
70 | Hindusthan National Glass & Industries Limited
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
IV. Balance Sheet Reconciliation
Gratuity Gratuity Leave Encashment Funded Unfunded Unfunded
Opening Net Liability 21.92 726.88 198.01Expenses as above 152.93 26.59 72.68Employers Contribution 40.82 35.86 24.51Amount Recognised in Balance Sheet 726.27 717.61 246.17
(Rs in lacs)
V. Compensated AbsencesThe actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the Company asat March 31, 2009 is Rs 246.17 lacs.
The estimates of rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion andother 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 assetsheld, 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 2009-10 is yet to be determined.
Gratuity Gratuity Leave Encashment Funded Unfunded Unfunded
Mortality Table LICI 1994-1996 LICI 1994-1996 LICI 1994-1996Discount rate (per annum) 7.50 % 8.00 % 8.50 % / 7.50 %Expected rate of return on plan assets (per annum) 8.00 % 8.00 % 8.00 %Rate of escalation in salary (per annum) 5.00% 5.00 % 5.00 %
III. Expense recognised in the Income statement (Under the head “Contribution to provident and other funds” – Refer Schedule Q)
Gratuity Gratuity Leave Encashment Funded Unfunded Unfunded
Current Service Cost 53.44 66.83 26.02Interest Cost 44.23 57.78 16.74Expected Return on plan assets 47.79 Nil NilNet Actuarial (Gain) / Loss to be recognised 103.05 (98.01) 29.93Expenses recognised in Profit and Loss account 152.93 26.59 72.68
VI. Principal Actuarial assumptions at the Balance Sheet Date
II. Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:
Gratuity (Funded)
Fair value of plan assets at the beginning of the year 597.37Expected return on plan assets 47.79Actuarial Gain / (Loss) (34.53)Employer contribution 40.82Benefits paid 59.21Fair value of plan assets at the end of the year 592.24
Hindusthan National Glass & Industries Limited | 71
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Particulars 2008-09 2007-08
Domestic Market 130992.67 109628.28Overseas Market 12734.64 4333.90Total 143727.31 113962.18
(Rs in lacs)
The following table shows the distribution of the Company’s Debtors by Geographical market.
Sundry Debtors by Geographical Market
Particulars 2008-09 2007-08
Domestic Market 21797.47 15876.30Overseas Market 921.52 573.33Total 22718.99 16449.63
22) The accounts of some of the customers are pending reconciliation / confirmation and Sales Tax deferment loan of Rs 1610.55 lacs issubject to confirmation and the same have been taken as per the balances appearing in the books.
A provision of Rs 863.04 lacs (Previous year Rs 991.53 lacs) is carried in the books against doubtful debts and the management is ofthe opinion that the same is adequate and no further provision is required there against.
23) In the opinion of the Management/Board of Directors, the “Current Assets, Loans and Advances” have a value on realisation in theordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.
24) Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status ofthe suppliers as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” (the Act). There are no delays inpayment made to such suppliers. There is no overdue amount outstanding as at the balance sheet date. Based on above the relevantdisclosures u/s 22 of the Act are as follows:
25) 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) Inventories of Stores and Spare Parts include items, which are lying with the Company. A provision of Rs 679.51 lacs (including Rs 61.48lacs for the year) towards obsolescence is carried in the books and the management is of the opinion that the same is adequate and nofurther provision is required there against.
28) Related Party Disclosures as identified by the management in accordance with the Accounting Standard – 18.A) Subsidiary Companies
i) Glass Equipment (India) Limitedii) Quality Minerals Limited
B) Associatei) HNG Float Glass Limited
C) Directors and Relativesi) Mr C. K. Somany – Chairman and Non Executive Director (Relative of Key Management Personnel)ii) Mr Sanjay Somany - Managing Director and Key Management Personneliii) Mr Mukul Somany - Jt. Managing Director and Key Management Personneliv) Mr Bharat Somany – Management Trainee (Relative of Key Management Personnel)v) Mr R. R. Soni – Executive Director and Key Management Personnel (with effect from October 27, 2008)
1. Principal amount outstanding at the end of the year 68.342. Interest amount due at the end of the year Nil3. Interest paid to suppliers Nil
21) The Company’s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management thisis the only reportable segment, as per the Accounting Standard 17 on Segment Reporting, issued under Companies (AccountingStandards) Rules, 2006.
Geographical SegmentThe following table shows the distribution of the Company’s Sales by Geographical market.
Sales Revenue by Geographical Market
72 | Hindusthan National Glass & Industries Limited
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
2008-09 2007-08
Sale of GoodsGlass Equipment (I) Ltd. 35.21 8.90Purchase of GoodsGlass Equipment (I) Ltd. 1189.36 1104.24Quality Minerals Ltd. 269.10 237.06Sale of Fixed AssetsGlass Equipment (I) Ltd. 6.12 NilPurchase of Fixed AssetsGlass Equipment (I) Ltd. 1499.43 954.92Receiving of ServicesGlass Equipment (I) Ltd. 343.79 48.06Provision of FacilitiesGlass Equipment (I) Ltd. 16.00 16.00Dividend ReceivedGlass Equipment (I) Ltd. 26.40 0.26Counter Guarantees GivenGlass Equipment (I) Ltd. 381.00 381.00Counter Guarantees TakenGlass Equipment (I) Ltd. 50.00 50.00PayablesGlass Equipment (I) Ltd. 661.04 658.58Quality Minerals Ltd. 7.58 55.42
(Rs in lacs)
The aggregate amount of transactions with the related parties as mentioned in (A) above is as given hereunder:
The aggregate amount of transactions with the related party as mentioned in (B) above is as given hereunder:
2008-09 2007-08
Sale of Goods 46.06 NilPurchase of Goods 2.51 NilReceiving of Services 0.47 NilPayables 28.65 Nil
The aggregate amount of transactions with the related parties as mentioned in (C) above is as given hereunder:
Remuneration 2008-09 2007-08
1. Mr Sanjay Somany 135.01 117.022. Mr Mukul Somany 137.73 117.023. Mr Bharat Somany 2.34 1.804. Mr R. R. Soni 18.11 Nil
D) Enterprises over which any person described in [C (i) to (iv)] above is able to exercise significant influence and with whomthe Company has transactions during the year.i) AMCL Machinery Limitedii) Ceramic Decorators Limitediii) Microwave Merchants Private Limitediv) Mould Equipmentv) Noble Enclave and Towers Private Limitedvi) Somany Foam Limitedvii) Topaz Commerce Limited
Hindusthan National Glass & Industries Limited | 73
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
* Companies in which directors are interested as member / director(s). Further, these loans were given by the erstwhile Ace GlassContainers Limited (AGCL) and none of the directors was director in AGCL and accordingly, as advised legally, the provisions of Section295 of the Companies Act, 1956 are not applicable with regard to these loans.
E) Transactions for purchase of goods with Mould Equipments are covered under Section 297 of the Companies Act, 1956. Steps arebeing taken to obtain Central Government approval for such transactions.
The aggregate amount of transactions with the related parties as mentioned in (D) above is as given hereunder:
2008-09 2007-08
Sale of GoodsSomany Foam Ltd. 3.21 NilPurchase of GoodsMould Equipment 11.70 23.98Somany Foam Ltd. 2.86 1.61Sale of Fixed AssetsSomany Foam Ltd. 0.42 1.05Purchase of Fixed AssetsSomany Foam Ltd. Nil 1.33Receiving of ServicesCeramic Decorators Ltd. 112.21 89.08Mould Equipment 152.93 212.06Rent ReceivedMould Equipment 27.97 13.20Interest ReceivedMicrowave Merchants Pvt. Ltd. 36.48 7.67Noble Enclave & Towers Ltd. 154.81 14.14Topaz Commerce Ltd. 209.17 15.48Recovery of ExpensesAMCL Machinery Ltd. 4.04 NilInterest PaidCeramic Decorators Ltd. 10.67 9.84AMCL Machinery Ltd. 28.19 NilLoan TakenCeramic Decorators Ltd. 1.70 64.00AMCL Machinery Ltd. 1500.00 NilLoan GivenMicrowave Merchants Pvt. Ltd. Nil 900.00Noble Enclave & Towers Ltd. Nil 1800.00Topaz Commerce Ltd. Nil 1800.00Loan RepaidCeramic Decorators Ltd. 18.90 NilAMCL Machinery Ltd. 1500.00 NilReceivablesSomany Foam Ltd. 0.56 0.04Loans (including interest accrued net of recovery)Microwave Merchants Pvt. Ltd.* 266.22 905.93Noble Enclave & Towers Ltd.* 1140.73 1810.93Topaz Commerce Ltd.* 1728.27 1811.98PayablesCeramic Decorators Ltd. 2.97 77.36Mould Equipment 6.50 6.30
(Rs in lacs)
74 | Hindusthan National Glass & Industries Limited
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
29) Units of Bonds & Mutual Funds purchased and redeemed / sold during the year (Face value of Rs 10 each, except otherwise stated)
30) a) The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Blocks of Buildings andVehicles. The lease term is 75 years for Building. The lease term is 3 years for Vehicles, after which the legal title will pass on theCompany. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum lease paymentspayable in future at the balance sheet date and their present value are as under There is no escalation clause in the lease agreementfor vehicles.:
b) Assets taken under operating leases:Office premises and office equipments are obtained on operating lease. There is no contingent rent in the lease agreements. Thelease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the leaseagreements. 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.
(Rs in lacs)
2008-09 2007-08
Sl. No. Name of Fund No. of Units Cost No. of Units Cost
a) Sardar Sarovar Narmada Nigam Ltd. – DDB 2014 Nil Nil 69 34.55b) Prudential ICICI Liquid Fund Nil Nil 9931 1.74c) Birla Cash Plus Fund Nil Nil 1437485 300.00d) ING Vyasya Liquid Fund Nil Nil 4186735 500.00e) Birla Sun Life Cash Morgan Fund Nil Nil 10687377 1900.00f) HDFC Liquid Fund Nil Nil 6700893 1025.74g) UTI Liquid Cash Plan Nil Nil 49848 625.00h) HDFC Floating Rate Income Fund Nil Nil 7602172 1099.26i) Kotak Floater Short Term Plan Nil Nil 2397372 300.00
Total Nil Nil 33071882 5786.29
Particulars Lease payments Present value
Not later than one year 30.89 21.19Later than one year and not later than five year 86.32 69.89
31) Adjustment made in Reserve and Surplus Account
2008-09 2007-08
a) Adjustment made in General Reserve AccountAdd: Adjustment consequent upon amalgamation of erstwhile Ace Glass Containers Ltd. Nil 31391.22Add: Transfer from Capital Reserve Nil 0.04Add: Transfer from Profit & Loss Account 7000.00 14850.00Less: Adjustment on account of transitional provision under AS-15 Nil 118.63Less: Loss on Ace Glass Containers Limited for the year ended March 31, 2007 Nil 3146.66Less: Carrying Cost of shares held in erstwhile Ace Glass Containers Limited pursuant to
the Scheme of Amalgamation Nil 7.55Less : Merger expenses and others Nil 83.18Total 7000.00 42885.24
b) Revaluation Reserve AccountAdd: Revaluation of Land and Buildings Nil 7554.80Less: Transfer to Profit and Loss Account 223.55 281.21Less : Adjustment on account of sale/ discard of assets 1.47 60.75Total (225.02) 7212.84
c) Debenture Redemption ReserveAdd: Transfer from Profit and Loss Account 1250.00 NilTotal 1250.00 Nil
d) Share Premium AccountAdd: Adjustment consequent upon amalgamation of erstwhile Ace Glass Containers Ltd. Nil 12449.54Less: Deferred Tax Liability 2369.18 NilTotal (2369.18) 12449.54
Hindusthan National Glass & Industries Limited | 75
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
2008-09 2007-08
Installed Actual Installed ActualCapacity Production Capacity Production
I. Glass Plantsa) Glass Bottles and Vials 927669 767971 849525 691359b) Pressed Tumblers 5000 – 5000 –
SALES* STOCKS
2008-09 2007-08 2008-09 2007-08Unit Qty. Value Qty. Value Qty. Value Qty. Value
Bottles MT 765459 143725.62 695820 113961.15 46797 6990.08 44285 5735.68Tumblers MT 19 1.69 10 1.03 – – 19 1.05Others # (Job Works) 132.32 871.72 – –Total 143859.63 114833.90 6990.08 5736.73
32) Details of Products Manufactured, Turnover, Stock, Raw Material Consumed etc.a) Capacities and Actual Production:
Notes: 1. Installed Capacity and Actual Production has been given in MT.
2. Licensed Capacity is not given as licensing has been abolished vide Press Note No.9 dated August 2, 1991 and Notification No.S.O.477 (E) dated July 25, 1991 issued by Government of India, Ministry of Industry and Department of Industrial Development. Theinstalled capacity is as certified by the management.
b) Finished Goods Stocks and Sales:
* Sales includes breakages of bottles
# Others include General Merchandise Sale amounting to Rs 76.95 lacs (Previous Year Rs 163.03 lacs) and sale of services Rs 55.37 lacs. (Previous year Rs 708.69 lacs)
c) Details of Purchases and Sales of General Merchandise:
2008-09
Opening Stock Purchase Sales Closing Stock
Description Unit Qty. Value Qty. Value Qty. Value Qty. Value
LUG Cap ‘000 pcs – – 179 – 179 1.16 – –Glass Bottle MT – – 969 56.97 969 75.79 – –Float Glass Sq. mt. 12020.50 44.16 – – 12020.50 55.37 – –Total 44.16 56.97 132.32 –
(Rs in lacs)
2007-08
Opening Stock Purchase Sales Closing Stock
Description Unit Qty. Value Qty. Value Qty. Value Qty. Value
Roop Cap ‘000 pcs – – 90 1.67 90 2.44 – –Glass Bottle MT – – 1213 93.03 1213 103.36 – –Float Glass Sq. mt. – – 26580.74 97.46 14560.24 57.23 12050.50 44.16Total – 192.16 163.03 44.16
76 | Hindusthan National Glass & Industries Limited
2008-09 2007-08
Item Unit Quantity Value Quantity Value
Silica Sand MT 348388 4998.83 316354 4131.34Soda Ash MT 155257 18315.31 109442 12903.40Cullet MT 281086 11182.35 232458 8049.13Others MT 4637.33 3914.85Total 39133.82 28998.72
Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
d) i) Raw Materials Consumed *
e) C.I.F. Value of Imports
* Excluding Rs 118.32 lacs (Previous Year Rs 60.73 lacs) being raw material processing charges.
ii) Value of Raw Materials, Spare Parts and Components Consumed (As certified):
* Excluding Rs 1676.49 lacs (Previous Year Rs 1265.59 lacs) being Stores consumption.
2008-09 2007-08
Raw Materials Spare Parts* Raw Materials Spare Parts*Value % Value % Value % Value %
Imported 8181.10 20.91 1573.41 25.68 6502.61 22.42 1219.43 27.08Indigenous 30952.72 79.09 4552.60 74.32 22496.11 77.58 3282.81 72.92Total 39133.82 100.00 6126.01 100.00 28998.72 100.00 4502.24 100.00
(Rs in lacs)
2008-09 2007-08
Raw Materials 6489.33 5698.52Components, Spare Parts and Stores etc. 4894.01 1497.50Capital Goods (including CWIP) 5131.73 1939.26
f) Expenditure in Foreign Currency
2008-09 2007-08
Travelling Expenses 27.41 29.07Selling Commission 62.22 46.85Finance Charges 153.54 164.83Repairs 47.36 6.47Professional / Technical Fees 94.27 24.96Others 0.04 0.06
g) Earnings in Foreign Currency
33) Figures for previous year have been regrouped and/or rearranged wherever considered necessary.
34) Schedule "A" to "L" and "S" form part of Balance Sheet and Schedule "M" to "S" form part of Profit and Loss Account.
2008-09 2007-08
F.O.B. Value of Exports 5772.77 4032.46
As per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director
H. K. Verma Priya Ranjan Nirmal KhannaPartner Company Secretary Sr. Vice President andKolkata Chief Financial OfficerJune 20, 2009
Mukul Somany Sanjay SomanyJt. Managing Director Managing Director
Kolkata Priya Ranjan Nirmal KhannaJune 20, 2009 Company Secretary Sr. Vice President and
Chief Financial Officer
Balance Sheet AbstractStatement 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 9
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 7 4 1 0 0 7 1
Total Liabilities
1 7 4 1 0 0 7 1
9 1 7 7 1 2 6
Unsecured Loans
9 2 1 0 6 5
Paid–up Capital
1 7 4 6 7 7
Secured Loans
4 1 5 2 3 8 1
Deferred Tax Liabilities
4 1 7 6 7 1
Net Fixed Assets
9 8 8 5 1 7 3Net Current Assets
3 9 1 1 9 0 1
Accumulated Loss
N I L
Net Income
1 3 4 4 1 9 4 0
Earnings per Share in Rs
6 1 . 6 8
7 0 1 0 9 0 - 0 1
Total Expenditure
1 2 2 6 4 7 6 5
Dividend %
5 0 . 0 0
Profit / Loss Before Tax
1 1 7 7 1 7 5
Profit / Loss After Tax
1 0 7 7 4 6 2
G L A S S B O T T L E S
Investments
1 0 4 5 8 4 6Miscellaneous 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.
Hindusthan National Glass & Industries Limited | 77
78 | Hindusthan National Glass & Industries Limited
Statement Regarding Subsidiary Companies Pursuant to Section 212 of Companies Act, 1956
Mukul Somany Sanjay SomanyJt. Managing Director Managing Director
Priya Ranjan Nirmal KhannaKolkata Company Secretary Sr. Vice President andJune 20, 2009 Chief Financial Officer
1. Name of the Subsidiary Company Glass Equipment (India) Ltd. Quality Minerals Ltd.
2. The Financial Year of the Subsidiary Company. Year ended on March 31, 2009 Year ended on March 31, 2009
3. Holding Company’s interest Entire Subscribed Capital comprising 9,384 Equity Shares of Rs 100/- each
of 26,400 Equity Shares of Rs 100/- each. out of the Subscribed and Paid Up
Capital of 9,410 Equity Shares of
Rs 100/-each.
4 Extent of holding 100.00% 99.73%
5 Net Profit of the Subsidiary Rs 2,48,65,016/- Rs 21,04,094/-
6 For the financial year of the Subsidiary
A] Profits/(Losses) so far as it concerns the Rs 2,48,65,016/- Rs 20,98,203/-
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 26,40,000/- Nil
members of the Holding Company and dealt
with in the Holding Company’s accounts.
7 For previous financial years since it become
a Subsidiary.
A] Profits/(Losses) so far as it concerns the Rs 13,45,14,566/- Rs 1,23,69,899/-
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 76,14,263/- Nil
members of the Holding Company and dealt
with in the Holding Company’s accounts.
Glass Equipment (India) Limited | 79
GLASS EQUIPMENT (INDIA) LIMITED
Director’s ReportTo the MembersYour Directors have the pleasure to place before you the Thirty Ninth Annual Report together with Audited Accounts of the Company forthe year ended March 31, 2009.
Financial Highlights
Year ended 31.03.2009 Year ended 31.03.2008
Gross Sales (Including Excise Duty) 28,92,70,494 20,41,14,416Profit Before Interest, Depreciation and Tax 5,32,46,621 3,41,35,624Interest and Finance Charges 31,49,791 25,02,550Profit Before Depreciation and Tax 5,00,96,830 3,16,33,074Depreciation 75,11,057 84,10,910Profit Before Tax 4,25,85,773 2,32,22,164Provision for Current Tax 1,51,70,000 93,20,000Provision for Fringe Benefit Tax 1,64,500 1,29,000Provision for Deferred Tax (7,02,411) (19,71,808)Profit After Tax 2,79,53,684 1,57,44,972Balance brought forward from previous year 44,88,829 68,32,525Amount available for appropriation 3,24,42,513 2,25,77,497AppropriationGeneral Reserve 2,00,00,000 1,50,00,000Proposed dividend 26,40,000 26,40,000Tax on dividend 4,48,668 2,30,88,668 4,48,668 1,80,88,668Balance carried forward to next year 93,53,845 44,88,829
Working Review
The Net Sales of the Company was higher at Rs 2599.25 Lacs as
against Rs 1790.93 Lacs in the previous year. Your Directors are
optimistic about current year’s performance.
Dividend
Your Board of Directors recommend payment of Dividend @
Rs 100/- per share on 26,400 Equity Shares of Rs 100/- each for the
Financial Year 2008-2009.
Directors
Shri Bharat Somany, Shri D.D. Taparia and Shri B.K. Kedia have been
appointed as additional Director of the Company with effect from
December 13, 2008, April 16, 2009 and April 16, 2009 respectively.
Shri J.P. Kasera and Smt. Jaya Kanoria retire by rotation and being
eligible, offer themselves for re-appointment.
Compliance Certificate
In 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.
Auditors
The Auditors Messers Krishan Somani & Associates, Chartered
Accountants, retire at the ensuing Annual General Meeting and are
eligible for re-appointment.
Auditors’ Report
The 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 March 31, 2009 is given in the Annexure to the Report.
Industrial Relations
Industrial relations within the Company remained cordial.
Particulars required under section 217(1) (e) of the 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.
(Amount in Rupees)
80 | Glass Equipment (India) Limited
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.
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 and outgo is contained in
Schedule S(16) (D, E, F & G)
Directors’ Responsibility Statement Pursuant to Section
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 of the Company for that year;
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
Bahadurgarh C. K. Somany
May 23, 2009 (Chairman)
Annexure to the Directors’ ReportInformation 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 March 31, 2009 :-
a) Employees, who are employed throughout the financial year :-
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, Shri Bharat Somany and Smt. Jaya Kanoria.
3) The appointment is on contractual basis.
Name Age in Years Qualifications Designation/ Commencement Experience Gross Name of Previous
Nature of of Employment (Years) Remuneration Employer, Post held
Duties (Rupees)
Sri. C.K. Somany 76 Years I.S.C, FBIM Executive October 1, 2000 56 Years 30,61,038 Hindusthan National Glass &
(London) Chairman Industries Limited,
Kolkata, Managing Director
Director’s Report
Glass Equipment (India) Limited | 81
Registration No. of the Company : 21-65595
Nominal Capital . Rs 40,00,000/-
To,The Members,Glass Equipment (India) Limited,2, Red Cross Place,Kolkata - 700001
I have examined the registers, records, books and papers of GLASSEQUIPMENT (INDIA) LIMITED (the Company) as required to bemaintained under the Companies Act, 1956 (the Act) and the rulesmade thereunder and also the provisions contained in theMemorandum and Articles of Association of the Company for thefinancial year ended on March 31, 2009 (financial year). In myopinion and to the best of my information and according to theexaminations carried out by me and explanations furnished to me bythe Company, its officers and agents, I certify that in respect of theaforesaid financial year.
1. The Company has kept and maintained all registers as stated inAnnexure ‘A’ to this certificate, as per the provisions of the Actand the rules made thereunder and all the entries therein havebeen duly recorded.
2. The Company has duly filed the forms and returns as stated inAnnexure ‘B’ to this certificate, with the Registrar of Companies,Regional Director, Central Government, Company Law Board orother authorities within the time prescribed under the Act andthe rules made thereunder except as otherwise stated.
3. The Company being a Public Limited Company, comments arenot required.
4. The Board of Directors duly met FIVE times respectively on May19, 2008, June 11, 2008, July 27, 2008, December 13, 2008and February 20, 2009 in respect of which meetings propernotices were given and the proceedings were properly recordedand signed in the Minutes Book maintained for the purpose.
5. The Company has not closed its Register of Members during thefinancial year.
6. The Annual General Meeting for the financial year ended onMarch 31, 2008 was held on September 8, 2008, after givingdue notice to the members of the Company and the resolutionspassed there at were duly recorded in Minutes Book maintainedfor the purpose.
7. No Extra-ordinary General Meeting was held during the financialyear.
8. The Company has not advanced any loans to its directors orpersons or firms or Companies referred to under Section 295 ofthe Act.
9. The Company has duly complied with the provisions of Section297 of the Act in respect of contracts specified in that section.
10. The Company has made necessary entries in the registermaintained under Section 301 of the Act.
11. As there were no instances falling within the purview of Section314 of the Act, the Company has not obtained any approvalsfrom the Board of Directors, Members or Central Government.
12. The Company has not issued any duplicate share Certificateduring the financial year.
13. i. There was no allotment/transfer/transmission of securitiesduring the financial year.
ii. The Company has not deposited the amount of dividenddeclared in a separate Bank Account as the Company hasissued a Cheque to the holding Company for dividend onSeptember 9, 2008 which is within five days from the dateof declaration of such dividend.
iii. The Company has paid dividend to the holding Companywithin a period of 30 (Thirty) days from the date ofdeclaration and therefore it has not transferred any amountto 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 March 31, 2009.
v. The Company has duly complied with the requirements ofSection 217 of the Act.
14. The Board of Directors is duly constituted and the appointmentof directors, additional directors, alternate directors anddirectors to fill casual vacancy have been duly made.
15. The appointment of Whole-time Director has been made inCompliance with the provisions of Section 269 read withSchedule XIII to the Act except that the return in the prescribedform (Form No 25C) has not been filed within 90 days of suchappointment.
16. The Company has not appointed any sole selling agents duringthe financial year.
17. The Company was not required to obtain any approvals of theCentral Government, Company Law Board, Regional Director,Registrar and/ or such authorities prescribed under the variousprovisions of the Act during the Financial year.
18. The Directors have disclosed their interest in the otherfirms/companies to the Board of Directors pursuant to theprovisions of the Act and the rules made there under.
19. The Company has not issued any shares, debentures or othersecurities during the year.
20. The Company has not bought back any shares during thefinancial year.
21. The Company has not issued any Preference Shares orDebentures.
22. There were no transactions necessitating the Company to keepin abeyance any rights to dividend, rights shares and bonusshares pending registration of transfer of shares.
Compliance Certificate
82 | Glass Equipment (India) Limited
23. The Company has not invited/accepted any deposits during thefinancial year except some temporary amount borrowed duringthe year which has been repaid within the year.
24. The amount borrowed by the Company from directors,members, public, financial institutions, Banks or other duringthe financial year ended March 31, 2009 are within the limitsprescribed under Section 293(1)(d) of the Act have been passedin duly convened Annual General Meeting held on September23, 1996.
25. The Company has made loans and investments and givenguarantees to other bodies corporate in compliance with theprovisions of the Act and has made necessary entries in theregister kept for the purpose.
26. The Company has not altered the provisions of theMemorandum with respect of situation of the Company’sregistered office from one state to another during the year underscrutiny.
27. The Company has not altered the provisions of theMemorandum with respect to the objects of the Companyduring the financial year under scrutiny.
28. The Company has not altered the provisions of the
Memorandum with respect to name of the Company during theyear under scrutiny.
29. The Company has not altered the provisions of theMemorandum with respect to share capital during the yearunder scrutiny.
30. The Company has not altered its Articles of Association duringthe financial year.
31. I have been informed by the management that there was noprosecution initiated against or show cause notice received bythe Company and no fines or penalties or any other punishmentwas imposed on the Company during the financial year, for theoffences under the Act.
32. The Company has not received any money as security from itsemployees during the financial year.
33. The Company has generally deposited both employees’ andemployer’s contribution to Provident Fund generally in time withprescribed authorities pursuant to Section 418 of the Act.
SignatureBabu Lal Patni
Kolkata Company SecretaryMay 23, 2009 C.P.No : 1321
ANNEXURE `A' LIST OF REGISTERS MAINTAINED BY THE COMPANY S.N Particulars Under Section01. Register of Charges 14302. Register of Members 15003. Index of Members 15104. Directors’ Minute Book 19305. Shareholders’ Minute Book 19306. Register of Contracts (Part I) 30107. Register of Contracts (Part II) 30108. Register of Directors 30309. Register of Directors Shareholdings 30710. Register of Investments 372A11. Register of Allotment12. Register of Transfer
ANNEXURE `B' Forms and Returns as filed by the Company with Registrar of Companies, Regional Director, Central Government or otherauthorities during the financial year ended March 31, 2009.
S.N. Form No./Return Filed Under For Date of Whether filed If delay in filing Section filing within prescribed whether requisite
Time additional fee paidYES/NO YES/NO
01. Form No 23AC 220 Balance Sheet 14.10.08 NO YESas at 31.03.2008
02. Form No 66 Proviso to Section 383A (1) Compliance Certificate 30.09.08 YES N.A.03. Form No 20B 159 Annual Return made 06.11.08 YES N.A.
upto 08.09.0804. Form No 32 303 Resignation of 12.07.08 NO YES
Dated 19.05.08 Directors05. Form No 32 303 Appointment 12.01.09 YES N.A
Dated 13.12.08 of Director
Auditors’ Report
To the Members ofGLASS EQUIPMENT (INDIA) LIMITED
1. We have audited the attached Balance Sheet of GLASS
EQUIPMENT (INDIA) LIMITED, as at March 31, 2009, 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 March 31, 2009, 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
read together with the significant accounting policies and
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 March 31, 2009; and
ii) In the case of the Profit & Loss Account, of the PROFIT
of the Company for the year ended on that date; and
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,
Delhi (Krishan Somani)
May 23, 2009 Proprietor
Membership No : 089879
Glass Equipment (India) Limited | 83
84 | 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 March 31, 2009.)
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 not granted any loans, secured or
unsecured to Companies covered in the register maintained
under Section 301 of the Companies Act, 1956. Therefore
the provisions of clause – 4 (iii) (a) to (d) are not applicable
to the Company.
b) 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 70.28 lacs and the
amount was repayable on demand.
c) 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.
d) 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 Lacs 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.
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.
Glass Equipment (India) Limited | 85
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,
Delhi (Krishan Somani)
May 23, 2009 Proprietor
Membership No : 089879
86 | Glass Equipment (India) Limited
The Schedules referred to above form an integral part of Balance SheetAs per our report of even dateFor Krishan Somani & AssociatesChartered Accountants
Krishan Somani Bharat Somany C.K. SomanyProprietor Director Chairman
417, Laxmi Tower, Commercial Complex,Azadpur, Delhi - 110033May 23, 2009
Balance Sheet As at March 31, 2009
(Amount in Rupees)
Schedules 31.03.2009 31.03.2008
SOURCES OF FUNDS
Shareholders' Funds
Share Capital A 26,40,000 26,40,000
Reserves and Surplus B 20,89,54,502 19,21,24,582
21,15,94,502 19,47,64,582
Loan Funds
Secured Loans C 2,80,41,971 2,14,74,337
Unsecured Loans D 65,00,000 65,00,000
3,45,41,971 2,79,74,337
Deferred Tax Liabilities (Net) 30,17,378 37,19,789
Total 24,91,53,851 22,64,58,708
APPLICATION OF FUNDS
Fixed Assets E
Gross Block 20,74,32,106 20,30,95,292
Less: Depreciation 13,23,32,156 11,65,79,286
Net Block 7,50,99,950 8,65,16,006
Capital Work-in-Progress – 10,40,000
Investments F 27,269 –
Current Assets, Loans and Advances
Current Assets
Inventories G 12,80,37,192 9,93,48,598
Sundry Debtors H 7,82,77,744 6,65,22,013
Cash and Bank Balances I 14,24,972 10,50,047
Loans and Advances and Other Current Assets J 5,35,35,329 3,64,00,720
26,12,75,237 20,33,21,378
Less
Current Liabilities and Provisions
Current Liabilities K 3,44,00,253 2,26,32,736
Provisions L 5,28,48,352 4,17,85,940
8,72,48,605 6,44,18,676
Net Current Assets 17,40,26,632 13,89,02,702
Total 24,91,53,851 22,64,58,708
Notes S
Glass Equipment (India) Limited | 87
The Schedules referred to above form an integral part of Profit and Loss AccountAs per our report of even dateFor Krishan Somani & AssociatesChartered Accountants
Krishan Somani Bharat Somany C.K. SomanyProprietor Director Chairman
417, Laxmi Tower, Commercial Complex,Azadpur, Delhi - 110033May 23, 2009
Profit and Loss Account For the year ended March 31, 2009
(Amount in Rupees)
Schedules 31.03.2009 31.03.2008
INCOME
Sales (Gross) M 28,92,70,494 20,41,14,416
Less : Excise Duty 2,93,45,183 2,50,21,303
25,99,25,311 17,90,93,113
Other Income N 19,38,907 32,13,065
Increase / (Decrease) in Stock O 2,57,26,271 (35,71,277)
28,75,90,489 17,87,34,901
EXPENDITURE
Materials P 16,42,84,275 8,51,79,463
Manufacturing and Other Expenses Q 7,00,59,593 5,94,19,814
23,43,43,868 14,45,99,277
Profit before Depreciation, Interest and Tax 5,32,46,621 3,41,35,624
Depreciation 15,824,027 84,10,910
Transferred from Revaluation Reserve (83,12,970) –
75,11,057 84,10,910
Interest and Finance Expenses R 31,49,791 25,02,550
Profit before Tax 4,25,85,773 2,32,22,164
Less : Provision for Income Tax
- Current Tax 1,51,70,000 93,20,000
- Fringe Benefit Tax 1,64,500 1,29,000
- Deferred Tax (7,02,411) (19,71,808)
Profit after Tax 2,79,53,684 1,57,44,972
Add : Balance brought forward from last year 44,88,829 68,32,525
Amount available for Appropriation 3,24,42,513 2,25,77,497
APPROPRIATIONS
General Reserve 2,00,00,000 1,50,00,000
Proposed Dividend on Equity Shares 26,40,000 26,40,000
Tax (including cess) on Proposed Dividend 4,48,668 4,48,668
Balance carried to the Balance Sheet 93,53,845 44,88,829
Basic and Diluted Earning Rs per Share 1058.85 596.40
Notes S
88 | Glass Equipment (India) Limited
Cash Flow Statement For the year ended March 31, 2009
As per our report of even dateFor Krishan Somani & AssociatesChartered Accountants
Krishan Somani Bharat Somany C.K. SomanyProprietor Director Chairman
417, Laxmi Tower, Commercial Complex,Azadpur, Delhi - 110033May 23, 2009
(Amount in Rupees)
2008-09 2007-08
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax 4,25,85,773 2,32,22,164
Adjustments for:
Depreciation 75,11,057 84,10,910
Interest (Net) 31,24,805 14,33,911
Fixed Assets written back / loss on sale of Fixed Assets 33,843 10,46,717
Profit on Sale of Fixed Assets / Investment – (36,442)
Operating Profit before working capital changes 5,32,55,478 3,40,77,260
Adjustments for:
Loans and Advances (1,71,34,609) 5,67,56,780
Trade receivables (1,17,55,731) (5,84,11,103)
Inventories (2,86,88,594) (1,27,63,187)
Trade and other payables 2,28,29,929 79,47,827
Cash generated from operations 1,85,06,473 2,76,07,577
Direct Taxes paid (1,53,34,500) (94,49,000)
Net Cash from Operating activities 31,71,973 1,81,58,577
B. CASH FLOW FROM INVESTING ACTIVITIES
Addition in Investment (27,269) –
Purchase of Fixed Assets (31,33,940) (50,36,625)
Sale of Fixed Assets 10,000 8,70,000
Interest received 24,986 10,68,639
Net Cash used in Investing Activities (31,26,223) (30,97,986)
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds / (Repayment) from Long term borrowings (Net) 65,67,634 (85,84,217)
Dividend Paid (26,40,000) (26,40,000)
Corporate Dividend Tax (4,48,668) (4,48,668)
Interest paid (31,49,791) (25,02,550)
Net Cash from Financing Activities 3,29,175 (1,41,75,435)
Net Changes In Cash And Cash Equivalents 3,74,925 8,85,156
Cash And Cash Equivalents – Opening Balance 10,50,047 1,64,891
Cash And Cash Equivalents – Closing Balance 14,24,972 10,50,047
(represents Cash in hand and Bank balances)
Glass Equipment (India) Limited | 89
31.03.2009 31.03.2008
Authorised40000 Equity Shares of Rs 100/- each (Previous Year 40000 Shares of Rs 100/-each) 40,00,000 40,00,000
40,00,000 40,00,000Issued, Subscribed and Paid-up26400 Equity Shares of Rs 100/- each fully paidup and held by the holding Company, Hindusthan 26,40,000 26,40,000
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
Schedule – A SHARE CAPITAL
(Amount in Rupees)
General ReserveAs per last Balance Sheet 13,50,00,000Add : Transferred from Profit & Loss Account 2,00,00,000 15,50,00,000 13,50,00,000Revaluation ReserveAs per last Balance Sheet 4,99,95,753Add: Adjustment during the Year 2,77,874Less : Depreciation on Revalued Assets 83,12,970 4,19,60,657 4,99,95,753Share PremiumAs per last Balance Sheet 26,40,000 26,40,000Profit and Loss AccountSurplus as per Profit and Loss Account 93,53,845 44,88,829
20,89,54,502 19,21,24,582
Schedules forming part of the Accounts
Schedule – B RESERVES AND SURPLUS
Working Capital Loans From Banks- Cash Credits : Secured by hypothecation of stock of finished goods, semi-finished goods, raw 2,80,41,971 2,14,74,337materials, stores and spares including packing material, book debts, other current assets, entire plant & machinery and other fixed assets and guaranteed by the holding Company.
2,80,41,971 2,14,74,337
Schedule – C SECURED LOANS
From a Corporate Associate 65,00,000 65,00,00065,00,000 65,00,000
Schedule – D UNSECURED LOANS
GROSS BLOCK DEPRECIATION NET BLOCK
Particulars Book value at Additions Revaluation Deductions/ Book value at Up to For the Dep. on Deductions/ Upto As at As at
01.04.2008 Adjustment Adjustment 31.03.2009 31.03.2008 Year Revalued Adjustment 31.03.2009 31.03.2009 31.03.2008
Assets
A. TANGIBLE
Plant & Machinery 19,52,77,461 21,09,219 2,77,874 1,15,000 19,75,49,554 11,39,14,198 62,84,628 8,312,970 71,157 12,84,40,639 6,91,08,915 8,13,63,263
Office & Other
Equipment 4,93,781 11,247 – – 5,05,028 2,37,323 17,250 – – 2,54,573 2,50,455 2,56,458
Furniture & Fittings 11,25,534 1,98,168 – – 13,23,702 4,19,137 60,564 – – 4,79,701 8,44,001 7,06,397
Vehicles 19,79,651 – – – 19,79,651 6,59,061 1,95,993 – – 8,55,054 11,24,597 13,20,590
B. INTANGIBLE
Computer Software 40,78,865 8,15,306 – – 48,94,171 12,16,567 7,78,831 – – 19,95,398 28,98,773 28,62,298
Technical Know How 1,40,000 – 1,40,000 1,33,000 – – – 1,33,000 7,000 7,000
Licences Fee – 10,40,000 – – 10,40,000 – 1,73,791 – – 1,73,791 8,66,209 –
Total 20,30,95,292 41,73,940 2,77,874 1,15,000 20,74,32,106 11,65,79,286 75,11,057 83,12,970 71,157 13,23,32,156 7,50,99,950 8,65,16,006
Previous Year 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
Schedule – E FIXED ASSETS
90 | Glass Equipment (India) Limited
Face Value (Rs.) Nos. 31.03.2009 31.03.2008
(Unquoted - in fully paidup shares) - other than TradeHNG International Limited Rs 10/- 134 27,269 –Total 27,269 –
Schedule – F INVESTMENTS
(Amount in Rupees)
Schedules forming part of the Accounts
(As valued and certified by the Management)Raw Materials & Components 7,15,97,265 6,83,96,161Stores & Spares 27,35,515 29,74,296Stock-in-Process 3,22,94,978 1,36,61,072Finished Goods 2,14,09,434 1,43,17,069
12,80,37,192 9,93,48,598
Schedule – G INVENTORIES
For Taxation 4,67,41,000 3,15,71,000For Gratuity and Unavailed Leave 24,68,454 67,40,542For Fringe Benefit Tax 5,50,230 3,85,730For Proposed Dividend 26,40,000 26,40,000For Tax on Proposed Dividend 4,48,668 4,48,668
5,28,48,352 4,17,85,940
Schedule – L PROVISIONS
(Unsecured, considered good unless otherwise stated)Debts due for a period exceeding six months
Considered good – 64,611– 64,611
Other Debts 7,82,77,744 6,64,57,4027,82,77,744 6,65,22,013
Schedule – H SUNDRY DEBTORS
Sundry CreditorsOthers 2,52,92,873 1,41,00,095Other Liabilities 91,07,380 85,32,641
3,44,00,253 2,26,32,736
Schedule – K CURRENT LIABILITIES
Cash Balance on hand 54,980 59,095Balance in Post Office Saving Bank Account (Pass Book with Central Excise) 1,000 1,000Balances With Scheduled Banks
in Current Accounts 6,83,992 9,29,952in Fixed Deposit Accounts 6,85,000 60,000
14,24,972 10,50,047
Schedule – I CASH AND BANK BALANCES
(Unsecured, considered good)Advances recoverable in cash or in kind or for value to be received 13,06,620 23,30,935Advance Income Tax 4,97,89,676 3,20,49,678Tax Deducted at Source 60,535 3,36,627Advance Fringe Benefit Tax 5,59,046 4,08,271Deposits and balances with Government Authorities and Other Departments 7,66,790 7,66,790Other Deposits 10,47,568 5,08,419
5,35,30,235 3,64,00,720Other Current AssetsInterest Receivable 5,094 –
5,35,35,329 3,64,00,720
Schedule – J LOANS AND ADVANCES AND OTHER CURRENT ASSETS
Glass Equipment (India) Limited | 91
31.03.2009 31.03.2008
Finished Goods (IS Machine & Spares) 27,38,26,280 18,23,04,045Others (Commercial Sales) 1,31,35,358 1,75,32,526Service Revenue (Tax deducted at source Rs 58,486, Previous Year Rs 1,08,632) 23,08,856 42,77,845
28,92,70,494 20,41,14,416Less: Excise Duty 2,93,45,183 2,50,21,303
25,99,25,311 17,90,93,113
Schedule – M SALES
(Amount in Rupees)
Schedules forming part of the Accounts
Interest on Deposits, etc. (Tax deducted at Source Rs 2,049, previous year Rs 2,27,995) 24,986 10,68,639Miscellaneous Receipts 18,67,677 16,58,968Liabilities no longer required written back 18,923 1,46,478Provisions in value of diminution on investments / leave written off 27,321 3,02,538Profit on sale / discard of fixed assets – 36,442
19,38,907 32,13,065
Schedule – N OTHER INCOME
Stores and Spare Parts Consumed 2,00,05,066 1,40,63,376Power and Fuel 12,91,206 12,64,333Salaries, Wages and Bonus 3,10,44,752 2,42,24,539Contribution to Provident and other Funds 22,21,577 18,24,991Workmen and Staff Welfare Expenses 26,59,531 18,77,255Hire Charges 16,00,000 16,00,000Rates and Taxes 83,328 1,01,973Repair and Maintenance :
Plant and Machinery 7,63,537 5,15,306Others 1,11,040 1,19,821
Insurance 1,27,930 2,77,410Excise Duty on Stock 2,86,220 (80,361)Directors' Remuneration 30,76,638 32,43,835Loss on sale / discard of fixed assets 33,843 10,46,717Miscellaneous Expenses 67,54,925 93,40,619
7,00,59,593 5,94,19,814
Schedule – Q MANUFACTURING AND OTHER EXPENSES
Closing StockFinished Goods 2,14,09,434 1,43,17,069Work-in-Process 3,22,94,978 1,36,61,072
5,37,04,412 2,79,78,141Less :Opening Stock :Finished Goods 1,43,17,069 1,64,02,021Work-in-Process 1,36,61,072 1,51,47,397
2,79,78,141 3,15,49,418Increase / (Decrease) 2,57,26,271 (35,71,277)
Schedule – O INCREASE / (DECREASE) IN STOCK
Raw Materials Consumed 14,08,99,169 6,72,36,653Purchase of Trading Material 2,33,85,106 1,79,42,810
16,42,84,275 8,51,79,463
Schedule – P MATERIALS
Bank 24,61,852 17,87,552Others 6,87,939 7,14,998
31,49,791 25,02,550
Schedule – R INTEREST AND FINANCE EXPENSES
92 | Glass Equipment (India) Limited
NOTES1. Statement on Accounting Polices
I) Accounting ConventionThe Company prepares its accounts under the historical cost convention, except for certain fixed assets which are revalued onaccrual basis, except otherwise stated in accordance with normally accepted accounting principles and applicable AccountingStandards in India.
II) Fixed Assets Fixed Assets are shown at cost of acquisition (net of CENVAT credit w.e.f. April 1, 1996) or cost of construction or at revaluedamount 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 capitalwork in process.
III) 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 eitherbelonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater ofassets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets arediscounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverableamount and such loss either no longer exists or has decreased. Impairment loss / reversal thereof is adjusted to the carrying valueof the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.
IV) DepreciationTangible Assetsi) 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 StraightLine Method (SLM) and is transferred from Revaluation Reserve to Profit and Loss Account.
Intangible Assetsi) Intangible Assets :- 95% value of the Computer Software, Technical Knowhow and License Fee is amortised. Computer Software
is amortised on SLM @ 16.21% per year. License Fee is amortised on SLM over a period of three years.
V) InvestmentsLong Term Investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary in thevalue. Current Investments are valued at cost or fair value which ever is lower.
VI) InventoriesFinished Goods and Work-in-process are valued at lower of cost or net realisable value. Cost for own Manufactured goods compriseof materials, labour and other appropriate overheads and is calculated on the basis which is appropriate to the business carried onby the Company.
Raw materials, components, stores and spares are valued at lower of cost or net realisable value. Cost of inventory is arrived at onWeighted Average Method and include the taxes and duties other than those recoverable from taxing authorities and other expensesincurred for procuring the same.
Scrap and unserviceable and obsolete stocks are valued at estimated realisable value.
Excise duty is considered as an element of cost.
VII) Foreign Currency TransactionsTransactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currencymonetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon and also on theexchange differences on settlement of the foreign currency transaction during the year are recognised as income or expenses andare adjusted to the Profit and Loss Account.
VIII) Revenue Recognitiona) All expenses and incomes are accounted on mercantile basis except otherwise stated.
Schedules forming part of the AccountsSchedule – S NOTES
Glass Equipment (India) Limited | 93
b) Revenue from sale of goods and services is recognised upon passage of title and rendering of services to the customers whichgenerally coincides with delivery.
c) Insurance and other claims to the extent considered recoverable are accounted for in the year of claim. However, claims andrefunds whose recovery can not be ascertained with reasonable certainty are accounted for on acceptance / actual receipt basis.
d) Sales are inclusive of Excise Duty less Return / Shortage / Rebates, if any and net of VAT.
IX) Employee Benefits (see note – 8)Liabilities in respect of employee benefits are provided for as follows :-
A) Deferred Benefit PlansLeave salary of employees on the basis of actuarial valuation by adopting Projected 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 schemeis maintained and administered by an Insurer to which the trustees make periodic contributions.
B) Deferred Contribution PlansProvident 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.
X) Borrowing CostsBorrowing cost that are attributable to the acquisition / construction of fixed assets are capitalised as part of the cost of respectiveassets. 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 ofany extra ordinary items). The number of shares used in computing basic EPS is weighted average number of shares outstandingduring the year.
XII) TaxationTax 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 provisionis made for deferred tax for all timing differences arising between taxable income and accounting income at currently enacted taxrates.
Deferred tax assets are recognised only if there is virtual certainty that they will be realised and are reviewed for the appropriatenessof their respective carrying values at each balance sheet date.
XIII) Provision, Contingent Liabilities and Contingent AssetsProvisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a resultof past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosedin the financial statements. Contingent Liabilities, if material are disclosed by way of notes.
Schedules forming part of the AccountsSchedule – S NOTES (Contd.)
2008-09 2007-08
2. Contingent liabilities not provided fora) Income Tax demand against which Company has preferred an appeal 5,87,260 5,87,260b) Surety given to sales tax department on behalf of :
- Holding Company, Hindusthan National Glass & Industries Limited 50,00,000 50,00,000c) Bonds executed in favour of Central Excise Department 1,000 1,000d) Pending Capital Orders 1,36,358 9,49,296
- Advance Given – 6,05,354e) Corporate Guarantee given on behalf of Somany Foam Limited 32,35,00,000 32,35,00,000
(Amount in Rupees)
2008-09 2007-08
3. Sundry Debtors include :- Due from holding Company, Hindusthan National Glass & Industries Limited 7,79,07,922 6,58,57,690
(Maximum balance: Rs 8,16,19,797)
94 | Glass Equipment (India) Limited
Schedules forming part of the AccountsSchedule – S NOTES (Contd.)
2008-09 2007-08
a) Provision for Bonus 32,52,426 26,12,844b) Gratuity paid 10,93,842 14,57,565
4. Salaries, Wages, Bonus include : (Amount in Rupees)
2008-09 2007-08
a) Directors’ Travelling Expenses 1,62,200 1,54,089b) Professional Fees 35,49,484 63,36,988c) Charity & Donation 5,00,000 –d) Payment to statutory Auditors :
- Audit Fees 31,000 31,000- Tax Audit Fees 10,000 10,000- Certification Work 2,000 –- Reimbursement of Expenses 15,655 2,280
5. Miscellaneous Expenses include :
2008-09 2007-08
i) Salary 17,25,000 17,25,000ii) HRA 10,35,000 10,35,000iii) Contribution to Provident Fund & other Funds 2,07,000 2,07,000iv) Provision for Gratuity 71,875 1,28,125v) Medical Expenses Reimbursement – 1,35,629vi) LTA 22,163 11,881vii) Directors’ Fee 15,600 1,200
30,76,638 32,43,835
6. a) Directors’ Remuneration include :
2008-09 2007-08
Net Profit as per Profit & Loss Account 4,25,85,773 2,32,22,164Add: Depreciation 75,11,057 84,10,910
Directors’ Remuneration 30,76,638 32,43,8355,31,73,468 3,48,76,909
Less: Depreciation under Section 350 of the Companies Act, 1956 75,11,057 84,10,9104,56,62,411 2,64,65,999
b) Computation of Net Profit under Section 198 read with Section 349 of the Companies Act, 1956 and commission payableto Directors :
7. As per Accounting Standard 15 “Employee Benefits”, the disclosures of employee benefits as defined in the Accounting Standard aregiven below :
i) The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards)Rules, 2006, are given below :
Defined Contribution SchemeContribution to Defined Contribution Plan, recognised for the year are as under :
The guidance on implementing Accounting Standard (AS-15) (Revised 2005) on Employees Benefits issued by Accounting StandardBoard (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be made by the employerneeds to be treated as “Defined Benefit Plan”. According to the Management, in consultation to the actuary it is not practical or feasibleto actuarially value the provident liability in the absence of any guidance from Actuarial Society of India and also due to the fact thatthe rate of interest as notified by the Government can vary annually. Accordingly, the Company is currently not in a position to provideother related disclosure as required by the aforesaid AS-15 read with ASB guidance. However, with regard to the position of the fundand confirmation to the trustees of such fund, there is no shortfall as at year end.
Employer’s Contribution to Provident Fund 11.98Employer’s Contribution to Pension Fund 9.65
(Rs in lacs)
Glass Equipment (India) Limited | 95
Schedules forming part of the AccountsSchedule – S NOTES (Contd.)
Defined Benefit PlanThe Employee’s gratuity fund scheme managed by Birla Sun Life Insurance is a defined benefit plan. The present value of obligation isdetermined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving riseto additional unit of employee benefit entitlement and measures unit separately to build up the final obligation. The obligation for leaveencashment 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 thereofare as follows :
II) Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows :
III) Expense recognised in the Income statement (Under the head “Salaries, Wages, Gratuity & Bonus” – Refer Schedule – Q.
Gratuity Leave EncashmentFunded Unfunded
Liability at beginning of the year 90.78 5.46Current Service Cost 6.61 1.43Interest Cost 6.53 0.32Actuarial (Gain) / Loss (6.72) 1.10Benefits Paid 7.33 2.30Liability at the end of the year 89.87 6.02
(Rs in lacs)
Gratuity Leave EncashmentFunded Unfunded
Current Service Cost 6.61 1.43Interest Cost 6.53 0.32Expected Return on Plan Assets 7.01 –Net Actuarial (Gain) / Loss to be recognised 12.28 1.10Expenses recognised in Profit and Loss Account 18.42 2.86
IV) Balance Sheet reconciliation
V) Compensated Absences The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the Company asat March 31, 2009 is Rs 6.02 lacs.
Gratuity Leave EncashmentFunded Unfunded
Opening Net Liability 3.21 5.46Expenses as above 18.42 2.86Employers contribution 5.05 2.30Amount Recognised in Balance Sheet 16.59 6.02
Gratuity(Funded)
Fair value of plan assets at the beginning of the year 87.56Expected return on plan assets 7.01Actuarial Gain / (Loss) (19.00)Employer contribution 5.05Benefits paid 7.33Fair value of plan assets at the end of the year 73.29
96 | Glass Equipment (India) Limited
Schedules forming part of the AccountsSchedule – S NOTES (Contd.)
VI) Principal Actuarial assumptions at the Balance Sheet
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and otherrelevant 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 assetsheld, 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. Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status ofthe suppliers as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” (the Act). There are no delays inpayment made to such suppliers. There is no overdue amount outstanding as at the balance sheet date.
10. Stores and Spares consumption includes partly for repairs and replacement less directly capitalised.
11. Profit and / or Loss on sales of raw materials and stores remains adjusted in consumption.
12. Earning Per Share
Gratuity Leave EncashmentFunded Unfunded
Mortality Table LICI 1994-1996 LICI 1994-1996Discount Rate (per annum) 7.50% 7.50%Expected rate of return on plan assets (per annum) 8.00% –Rate of escalation in salary (per annum) 5.00% 5.00%
As on 31.03.2009 As on 31.03.2008
8. a) Plant and Machinery were revalued by an approved valuer, on March 31, 2008 by using 4,19,60,656 4,99,95,753residual replacement value method. Accordingly, net amount transferred to Revaluation Reserve Account.
b) Depreciation transferred from Revaluation Reserve Account to Profit & Loss Account. 83,12,970 –
(Amount in Rupees)
As on 31.03.2009 As on 31.03.2008
Net Profit attributable to Shareholders 2,79,53,684 1,57,44,972Weighted average number of equity shares 26,400 26,400Basic earning per share of Rs 100/- each 1059 596
The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and diluted earning per shareof the Company are same.
13. Deferred Tax :Break up of Deferred Tax Assets and Deferred Tax Liabilities is as given below :
14. The Company’s exclusive business is manufacturing and selling of I.S. Glass Forming Machines and its Spares & Accessories and as suchin the opinion of the management this is the only reportable segment, as per Accounting Standard – 17 on Segment Reporting, issuedby the “The Institute of Chartered Accountants of India”.
Opening as on (Charge)/ Credit Closing as at 01.04.2008 during the year 31.03.2009
Deferred Tax AssetsExpenses charged in the financial statement but allowable as deduction 31,53,457 (3,94,845) 27,58,612in future years under Income Tax Act.Expenditure allowable on payment basis. 4,30,200 (1,658) 4,28,542Total Deferred Tax Assets 35,83,657 (3,96,503) 31,87,154Deferred Tax Liabilities Depreciation and related items 73,03,446 (10,98,914) 62,04,532Total Deferred Tax Liabilities 73,03,446 (10,98,914) 62,04,532Net Deferred Tax Liabilities 37,19,789 (7,02,411) 30,17,378
(Amount in Rupees)
Glass Equipment (India) Limited | 97
Schedules forming part of the AccountsSchedule – S NOTES (Contd.)
15. Information pursuant to paragraphs 3 & 4 of Part II of Schedule VI of the Companies Act, 1956.A) Capacity & Actual Production :
a) Company has been further permitted to manufacture Filter Presses and Ball Mills (Ceramic Machinery) worth Rs 30 Lacs per annumwithin 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 industriallicence, information of installed capacity and actual production are not given.
* As Certified by the management
* Includes cost of spares and accessories Rs 8,30,00,268 (Previous year Rs 3,62,42,145) taken for departmental use.
** Includes finished stock of spares and accessories Rs 2,14,09,434 (Previous year Rs 1,43,17,069).
*** Sales are inclusive of Excise Duty
Class of Goods Units (a) *Licenced Installed ActualCapacity Capacity Production
Glass Manufacturing Machine Nos 10 7 –(10) (7) (–)
Feeder, Accessories & Spares (b) Nos 15 7 –(15) (7) (–)
Glass Ceramic Decorating Machines, Accessories & Spare Parts Nos 12 12 –(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 5(10) (10) (3)
Bottle Inspection & Packing Machine Nos 10 10 –(10) (10) (–)
Conveyor, Single Liners, Ware Transfer, Accessories & Spares Nos 10 10 12(10) (10) (7)
Annealing / Decorating Lehr Nos 5 5 –(5) (5) (–)
Motor Driven Press & Fire Finishing Machine Nos 5 5 –(5) (5) (–)
B) Purchases, Stocks and Sales :
Opening Stock Purchase Closing Stock Sales ***
Class of Goods Unit Qty. Value Qty. Value Qty. Value Qty. Value
Feeder, Accessories & Spares Nos – – – – – – – –
(–) (–) (–) (–) (–) (–) (–)
I.S. Machine / Conversion Nos – – – – – – 5 5,01,80,409
(–) (–) (–) (–) (–) (–) (3) (4,47,64,564)
Conveyor, Single Liners, Ware Nos – – – – – – 12 2,58,02,046
Transfer, Accessories & Spares (–) (–) (–) (–) (–) (–) (7) (83,72,285)
Spares & Accessories Nos – * 6,43,45,924 – * 11,02,52,582 – ** 7,57,74,389 – 21,09,79,183
(–) (5,19,76,432) (–) (6,84,66,579) (–) (6,43,45,924) (–) (14,66,99,722)
Service Revenue – – – – – – – 23,08,856
(–) (–) (–) (–) (–) (–) (–) (42,77,845)
Others – – – – – – – 3,08,573
(–) (–) (–) (–) (–) (–) (–) (5,54,038)
(Amount in Rupees)
98 | Glass Equipment (India) Limited
Schedules forming part of the AccountsSchedule – S NOTES (Contd.)
C) Raw Material & Components consumed :
Note: Consumption is including of Sales Rs 2,29,16,983 (Previous year Rs 1,78,04,752).
Items Unit Quantity Rupees
Castings Pcs 47,301 1,36,26,116(23,455) (73,38,720)
Steels M.Ton 359 2,64,33,812(111) (1,05,81,190)
Accessories & Components – – 10,59,16,481(5,40,11,062)
D) Value of Raw Materials, Components & Spare Parts consumed (Including Sales) (As certified by the Management)
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 the Institute ofChartered Accountants of India (“ICAI”) and effective from April 1, 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
• Entities over which Directors and their relatives have influence- HNG International Limited- Somany Foam Limited
• Directors and Relatives- Mr C.K. Somany – Chairman
2008-09 2007-08
Raw Materials & Spare Parts Raw Materials & Spare PartsComponents ComponentsRupees % Rupees % Rupees % Rupees %
Imported 1,05,35,248 7 – – 1,28,54,341 18 – –Indigenous 13,54,41,161 93 1,08,92,126 100 5,90,76,630 82 72,56,211 100Total 14,59,76,409 100 1,08,92,126 100 7,19,30,971 100 72,56,211 100
2008-09 2007-08
E) CIF Value of Imports- Spares / Components 6,21,823 2,05,08,532
F) Expenditure in Foreign Currency- Travelling 48,975 8,270- Bank Charges 1,744 –
G) FOB Value of Export 16,88,537 14,27,639
(Amount in Rupees)
Glass Equipment (India) Limited | 99
Schedules forming part of the AccountsSchedule – S NOTES (Contd.)
Disclosure of Transactions between The Group & Related parties and status of outstanding balances as on March 31, 2009.i) Current Year
Holding Fellow Associates Entities over Directors and
Company Subsidiary which Directors their relatives
and their
relatives have
influence
Income
Sales 2941.94 – – – –
Services Given 25.91 – – – –
Expenses
Purchases 41.33 – – – –
Hire Charges Paid 16.00 – – – –
Remuneration Given – – – – 30.61
Sitting Fees Paid – – – – 0.16
Interest Paid – 6.83 – – –
Dividend Paid 26.40 – – – –
Services Taken – – – – –
Borrowings – 65.00 – – –
Investments – – – 0.27 –
Guarantee/Corporate Guarantee :-
- Given 50.00 – – 3235.00 –
Outstandings :-
- Receivables 779.08 – – – –
- Dividend Payable 26.40 – – – –
(Rs in lacs)
100 | Glass Equipment (India) Limited
Schedules forming part of the AccountsSchedule – S NOTES (Contd.)
ii) Previous Year
Holding Fellow Associates Entities over Directors and
Company Subsidiary which Directors their relatives
and their
relatives have
influence
Income
Sales 1616.42 – 442.74 – –
Services Given 4.85 – 43.21 – –
Interest Received – – – 9.98 –
Expenses
Purchases 8.90 – – – –
Hire Charges Paid 16.00 – – – –
Remuneration Given – – – – 32.43
Sitting Fees Paid – – – – 0.01
Interest Paid – 6.83 – – –
Dividend Paid 0.26 – – – –
Services Taken – – 0.03 – –
Borrowings – 65.00 – – –
Investments – – – 4.73 –
Guarantee/Corporate Guarantee :-
- Given 50.00 – – 3235.00 –
- Taken 381.00 – – – –
Outstandings :-
- Receivables 658.58 – – – –
- Dividend Payable 26.40 – – – –
(Rs in lacs)
16. Previous year figures have been re-grouped or re-arranged where ever considered necessary.
17. Schedule A to S form an integral part of Balance Sheet and Profit & Loss Account.
Signature to Schedule A to SAs per our report of even dateFor Krishan Somani & AssociatesChartered Accountants
Krishan Somani Bharat Somany C.K. SomanyProprietor Director Chairman
417, Laxmi Tower, Commercial Complex,Azadpur, Delhi - 110033May 23, 2009
Glass Equipment (India) Limited | 101
As per our report of even dateFor Krishan Somani & AssociatesChartered Accountants
Krishan Somani Bharat Somany C.K. SomanyProprietor Director Chairman417, Laxmi Tower, Commercial Complex,Azadpur, Delhi - 110033May 23, 2009
Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956
Balance Sheet Abstract and the Company’s General Business Profile
Balance Sheet Abstract
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 Thousands)
2 0 0 9
2 1
Item Code No. (ITC code) Product Descriptions
V. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)
Public Issue
8 4 7 5 1 0 0 0 G L A S S F O R M I N G M A C H I N E
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
N . A . O V E R H A U L I N G & S E R V I C E S
N I L
Right Issue
N I L
Bonus Issue
N I L
Private Placement
N I L
III. Position of Mobilisation and Deployment of Funds (Amount in Rs Thousands)Total Liabilities
3 3 6 4 0 2
Total Assets
3 3 6 4 0 2
IV. Performance of Company (Amount in Rs Thousands)Net Income
2 8 7 5 6 3
Total Expenditure
2 4 4 9 7 7
+ – Profit/Loss before Tax
(Please tick Appropriate box + for Profit, – for Loss)
√ 4 2 5 8 6
+ – Profit/Loss after Tax
√ 2 7 9 5 4
Earning per Share in Rs
1 0 5 9
Dividend (%)
1 0 0
Sources of FundsPaid-Up Capital
2 6 4 0
Reserves and Surplus
2 0 8 9 5 5
Secured Loans
2 8 0 4 2
Unsecured Loans
6 5 0 0
Deferred Tax Liability
3 0 1 7
Application of FundsNet Fixed Assets
7 5 1 0 0
Investments
2 7
Net Current Assets
1 7 4 0 2 7
Misc. Expenditure
N I L
Accumulated Losses
N I L
102 | Quality Minerals Limited
Directors’ Report
To the Shareholders of QUALITY MINERALS LTD.
Your Directors have pleasure in presenting the Thirty Fifth AnnualReport together with Audited Accounts for the year ended March31, 2009.
Financial Highlights (Amount in Rupees)
Year ended Year ended31.03.2009 31.03.2008
Gross Sales 2,62,65,959 2,37,05,689Profit before Interest, Depreciation & Tax 30,90,882 17,27,358Depreciation 18,145 20,151Profit Before Tax 30,72,737 17,07,207Provision for Current Tax 9,55,400 580856Provision for Fringe Benefit Tax 2722 558Provision for Deferred Tax 2,861 2,488Provision for Income Tax for earlier years 10,110 70,757Profit After Tax 21,04,094 10,52,548Balance brought forward from previous year 1,23,12,820 1,12,60,272Balance carried forward to next year 1,44,16,914 1,23,12,820
Working ReviewThe Company is solely in the business of supply of Feldspar Powder. TheFeldspar Lumps purchased from mines are grinded through job workersand the powder so produced is supplied. The sales of the Company washigher at Rs 262.66 Lacs as against Rs 237.06 Lacs in the previous year.Your Directors are optimistic about current year’s performance.
DividendThe Directors do not recommend any dividend for the year and theentire profit is to be carried forward.
Fixed DepositThe Company has not accepted any deposits from the public withinthe meaning of Section 58A of the Companies Act, 1956 and assuch no amount of principal or interest was outstanding as of theBalance Sheet date.
DirectorsShri D.D. Taparia retires by rotation from the Board of Directors ofthe Company at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment.
Auditors’ ReportThe Notes on Accounts, as referred to in the Auditors’ Report areself-explanatory and therefore, do not call any further comments.
AuditorsThe Auditors M/s J.M.Vyas & Company, Chartered Accountants, Jaipur,retire at the ensuing Annual General Meeting and being eligible, offerthemselves for re-appointment.
Particulars of EmployeesThere are no employees covered under section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars ofEmployees) Rules, 1975.
Conservation of Energy & Technology Absorption & ForeignExchange Earnings & Outgo.A) Conservation of Energy
Our Operations are not energy intensive. The Company has nodirect consumption of Power and Fuel.
B) Technology AbsorptionNot Applicable
C) Foreign Exchange Earnings & OutgoThe Company has neither any Foreign Exchange earning noroutgo.
Directors’ Responsibility Statement Pursuant to Section 217(2AA) of the Companies Act, 1956.
Your Directors hereby confirm :- That in the preparation of annual accounts, the applicable
accounting standards have been followed along with properexplanation relating to material departures.
- That the Directors had selected such accounting policies andapplied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial yearended on March 31, 2009 and of the profit of the Company forthe year ended March 31, 2009.
- That the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and otherirregularities.
- That the Directors had prepared the Annual Accounts on a goingconcern basis.
AcknowledgementYour Directors place on record their grateful appreciation for thecontinued support , assistance and co-operation received fromCentral & State Governments, Banks, Suppliers, Customers andBusiness Associates.
Your Directors aslo wish to place on record their deep sense ofappreciation for the committed services by your Company’semployees.
Registered Office On behalf of the Board of DirectorsW-27, Greater Kailash II,New Delhi – 110048.
Delhi (Amita Somany) (D.D. Taparia)June 1, 2009 Managing Director Director
Quality Minerals Limited | 103
Auditors’ Report
The Members,QUALITY MINERALS LIMITED
1. We have audited the attached Balance Sheet of M/s QUALITY
MINERALS LIMITED as at March 31, 2009 and Profit & Loss
Account and the Cash Flow Statement 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, 2009 and taken on record by the
Board of Directors, we report that none of the Directors is
disqualified as on March 31, 2009 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 P) 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 the Balance Sheet, of the state of affairs
of the Company as at March 31, 2009; and
ii) in the case of the Profit & Loss Account of the Company
of the PROFIT for the year ended on that date; and
ii) in the case of the Cash Flow Statement, of the cash
flows for the year ended on that date.
For and on behalf of
J.M. Vyas & Co.
Chartered Accountants,
Jaipur J. M. Vyas
June 1, 2009 Partner
104 | Quality Minerals Limited
Statement of matters specified by the Companies (Auditors Report ) Order 2003 relating to thefinancial year ended March 31, 2009
i) a) The Company has maintained proper records showing fullparticulars, including quantitative details and situation offixed assets.
b) The fixed assets have been physically verified by themanagement during the year. In our opinion, thefrequency of verification is reasonable having regard to thesize of the Company and the nature of its assets. Thediscrepancies reported on such verification were notmaterial and have been properly dealt with in the books ofaccount.
c) None of the fixed assets have been sold during the year.
ii) a) The management has conducted physical verification ofinventory at reasonable intervals.
b) In our opinion, the procedures followed by themanagement for such physical verification are reasonableand adequate in relation to size of the Company andnature of its business.
c) The Company is maintaining proper records of inventory.The discrepancies noticed on verification between physicalinventories and the book records were not material inrelation to the operation of the Company and the samehave been properly dealt with in the books of account.
iii) a) The Company has not granted any loans, secured orunsecured to companies, firms or other parties covered inthe register maintained under Section 301 of theCompanies Act, 1956 except one party. The maximumbalance outstanding during the year was Rs 65,00,000/-(previous year Rs 65,00,000/-) and the amount wasrepayable on demand.
b) In our opinion, the rate of interest and other terms andconditions of the loan granted by the Company, are primafacie not prejudicial to the interest of the Company.
c) The receipt of interest and principal amount was regular.
d) There are no overdue amounts of more than rupees onelac.
e) The Company has not taken any loans, secured orunsecured from companies, firms or other parties coveredin the register maintained under Section 301 of theCompanies Act, 1956.
iv) There are adequate internal control system commensuratewith the size of the Company and the nature of its business forthe purchase of inventory and fixed assets and for the sale ofgoods and services. There is no continuing failure to correctmajor weakness in internal control system.
v) a) Based on the audit procedures applied by us andaccording to the information and explanations providedby the management, we are of the opinion that alltransactions that need to be entered into the register inpursuance of Section 301 of the Companies Act, 1956have been so entered.
b) Based on the information and explanations given to us, itis our opinion that these transactions have been made atreasonable prices having regard to the prevailing marketprices at the relevant time.
vi) In our opinion and according to the information andexplanations given to us, the Company has not accepted anydeposits from the public within the meaning of Section 58Aand 58AA of the Companies Act, 1956 and the rules framedthere under.
vii) The Company has an internal audit system, which in ouropinion commensurate with the size and nature of itsbusiness.
viii) As informed to us, the maintenance of cost records has notbeen prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956, in respect ofthe activities carried on by the Company.
QUALITY MINERALS LIMITED
Quality Minerals Limited | 105
ix) a) The Company is regular in depositing the statutory duesincluding Provident Fund, Investor Education andProtection Fund, Employees State Insurance, Income tax,Sales tax, Wealth tax, Customs duty, Excise duty and otherstatutory dues with the appropriate authorities.
b) According to the information and explanations given tous, there are no dues of Sales tax, Income tax, CustomsDuty, Wealth tax, Excise duty outstanding on account ofany dispute.
x) The Company has no accumulated losses at the end offinancial year and it has not incurred any cash losses in thecurrent and immediately preceding financial year.
xi) The Company has not defaulted in the repayment of dues toany financial institution, bank or debenture holders.
xii) The Company has not granted any loan and advances on thebasis of security by way of pledge of shares, debentures andother securities.
xiii) The provisions of any special statute applicable to chit are notapplicable in respect of nidhi / mutual benefit fund/societies.
xiv) In our opinion the Company has maintained proper recordsof the transactions and contracts of the investments dealt in bythe Company and timely entries have been made therein. Theinvestments made by the Company held in its own name.
xv) The Company has not given any guarantees for loans taken byothers from banks or financial institutions.
xvi) The Company has not obtained any term loans.
xvii) On the basis of an overall examination of the balance sheetand the information and explanations given to us, we reportthat the Company has not utilised any funds raised on shortterm basis for long term investments and vice-versa.
xviii) The Company has not made any preferential allotment ofshares to the parties or companies covered under Section 301of 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 issueduring the year.
xxi) Based upon the audit procedures performed and theinformation and explanations given to us by the management,we report that no fraud on or by the Company has beennoticed or reported during the year.
For and on behalf of
J.M. Vyas & Co.
Chartered Accountants,
Jaipur J. M. Vyas
June 1, 2009 Partner
106 | Quality Minerals Limited
Balance Sheet As at March 31, 2009
The Schedules referred to above form an integral part of Balance SheetAs per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants
J.M. Vyas D.D. Taparia Amita SomanyPartner Director Managing DirectorJaipurJune 1, 2009
(Amount in Rupees)
Schedules 31.03.2009 31.03.2008
SOURCES OF FUNDS
Shareholders' Funds
Share Capital A 941,000 9,41,000
Reserves and Surplus B 1,44,73,742 1,23,69,648
1,54,14,742 1,33,10,648
Deferred Tax Assets/Liabilities (Net) 34,918 32,057
Total 1,54,49,660 1,33,42,705
APPLICATION OF FUNDS
Fixed Assets C
Gross Block 5,37,529 5,37,529
Less: Depreciation 3,16,477 2,98,332
Net Block 2,21,052 2,39,197
Investments D 1,20,000 1,20,000
Current Assets, Loans and Advances
Current Assets
Inventories E 5,28,859 4,34,518
Sundry Debtors F 63,88,923 56,95,224
Cash and Bank Balances G 21,52,374 26,99,759
Loans and Advances and Other Current Assets H 86,08,510 90,67,145
1,76,78,666 1,78,96,646
Less
Current Liabilities and Provisions
Current Liabilities I 16,08,141 30,91,725
Provisions J 9,61,917 18,21,413
25,70,058 49,13,138
Net Current Assets 1,51,08,608 1,29,83,508
Total 1,54,49,660 1,33,42,705
Significant Accounting Policies and Notes on Accounts P
Quality Minerals Limited | 107
The Schedules referred to above form an integral part of Profit and Loss AccountAs per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants
J.M. Vyas D.D. Taparia Amita SomanyPartner Director Managing DirectorJaipurJune 1, 2009
Profit and Loss Account For the year ended March 31, 2009
(Amount in Rupees)
Schedules 31.03.2009 31.03.2008
INCOME
Sales (Gross) K 2,62,65,959 2,37,05,689
Less : Excise Duty – –
2,62,65,959 2,37,05,689
Other Income L 7,85,172 7,94,076
Increase / (Decrease) in Stock M 94,341 (27,416)
2,71,45,472 2,44,72,349
EXPENDITURE
Materials N 1,55,31,514 1,54,04,861
Manufacturing and Other Expenses O 85,23,076 73,40,130
2,40,54,590 2,27,44,991
Profit before Depreciation, Interest and Tax 30,90,882 17,27,358
Depreciation 18,145 20,151
Profit before Tax 30,72,737 17,07,207
Less : Provision for Income Tax
- Current Tax 9,55,400 5,80,856
- Fringe Benefit Tax 272 558
- Deferred Tax 2,861 2,488
- Income Tax of Earlier years 10,110 70,757
Profit after Tax 21,04,094 10,52,548
Add : Balance brought forward from last year 1,23,12,820 1,12,60,272
Balance carried to the Balance Sheet 1,44,16,914 1,23,12,820
Basic and Diluted Earning Rs per Share 223.60 111.85
Significant Accounting Policies and Notes on Accounts P
108 | Quality Minerals Limited
Cash Flow Statement For the year ended March 31, 2009
As per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants
J.M. Vyas D.D. Taparia Amita SomanyPartner Director Managing DirectorJaipurJune 1, 2009
(Amount in Rupees)
2008-09 2007-08
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax 3,072,737 1,707,207
Adjustment for :
Depreciation 18,145 20,151
Interest (Net) (785,172) (793,615)
Operating Profit before working capital changes 2,305,710 933,743
Adjustment for :
Loans and advances 458,635 (709,326)
Trade receivables (693,699) (243,250)
Inventories (94,341) 27,416
Trade and other payables (2,343,080) 1,943,849
Cash generated from operations (366,775) 1,952,432
Direct Taxes paid (965,782) (652,211)
Net Cash from Operating activities (1,332,557) 1,300,221
B. CASH FLOW FROM INVESTING ACTIVITIES
Interest received 785,172 793,615
Net Cash used in Investing Activities 785,172 793,615
C. CASH FLOW FROM FINANCING ACTIVITIES – –
Net Changes In Cash And Cash Equivalents (547,385) 2,093,836
Cash And Cash Equivalents-Opening Balance 2,699,759 605,923
Cash And Cash Equivalents-Closing Balance 2,152,374 2,699,759
(Represents Cash in hand and Bank balances)
Quality Minerals Limited | 109
31.03.2009 31.03.2008
Authorised10000 Equity Shares of Rs 100/- each (Previous Year 10000 Shares of Rs 100/-each) 10,00,000 10,00,000
10,00,000 10,00,000 Issued, Subscribed and Paid-up
9410 (Previous Year 9410) Equity shares of Rs 100/- each fully paid up 9,41,000 9,41,000 9,41,000 9,41,000
Schedule – A SHARE CAPITAL
(Amount in Rupees)
Schedules forming part of the Accounts
Investment Allowance Reserve As per last Balance Sheet 56,828 56,828 Profit and Loss AccountSurplus as per Profit and Loss Account 1,44,16,914 1,23,12,820
1,44,73,742 1,23,69,648
Schedule – B RESERVES AND SURPLUS
GROSS BLOCK DEPRECIATION NET BLOCK
Particulars Book value at Additions Deductions/ Book value at Upto For the Deductions/ Upto As at As at
01.04.2008 Adjustment 31.03.2009 31.03.2008 year Adjustment 31.03.2009 31.03.2009 31.03.2008
Building 3,55,338 – – 3,55,338 1,85,560 8,489 – 1,94,049 1,61,289 1,69,778
Electricity Fittings 9,182 – – 9,182 7,622 217 – 7,839 1,343 1,560
Plant & Machinery 1,73,009 – – 1,73,009 1,05,150 9,439 – 1,14,589 58,420 67,859
Total 5,37,529 – – 5,37,529 2,98,332 18,145 – 3,16,477 2,21,052 2,39,197
Previous Year 5,37,529 – – 5,37,529 2,78,181 20,151 – 2,98,332 2,39,197
Schedule – C FIXED ASSETS
Face Value (Rs.) Nos. 31.03.2009 31.03.2008
Fully Paid-up Equity SharesUnquoted Surendra Khanij (P) Ltd. 10 12000 1,20,000 1,20,000
1,20,000 1,20,000
Schedule – D INVESTMENTS
(As valued and certified by the Management)Feldspar Lumps 5,28,859 4,34,518
5,28,859 4,34,518
Schedule – E INVENTORIES
(Unsecured, considered good unless otherwise stated)Debts due for a period exceeding six months – –Other Debts 63,88,923 56,95,224
63,88,923 56,95,224
Schedule – F SUNDRY DEBTORS
110 | Quality Minerals Limited
(Unsecured and Considered good)Loans To Bodies Corporate 65,00,000 65,00,000 Advances recoverable in cash or in kind or for value to be received 12,13,909 15,60,632 Advance Income Tax 8,94,601 10,06,513
86,08,510 90,67,145
31.03.2009 31.03.2008
Cash Balance on hand 57,365 1,73,813 Cheques in hand 1,38,218 –Balances With Scheduled Banks
in Current Accounts 9,56,791 10,25,946 in Fixed Deposit Accounts 10,00,000 15,00,000
21,52,374 26,99,759
Schedule – G CASH AND BANK BALANCES
(Amount in Rupees)
Schedules forming part of the Accounts
Sundry CreditorsDues to Micro, Small & Medium Enterprises – –Others 10,21,164 25,48,295
Other Liabilities 5,86,977 5,43,430 16,08,141 30,91,725
Schedule – I CURRENT LIABILITIES
Miscellaneous Receipts – 461 Interest Received
From Bank (TDS Rs 18,431 Previous year Rs 21,501) 1,02,672 1,11,115From Others (TDS Rs 1,54,655 Previous year Rs 1,54,655) 6,82,500 6,82,500
7,85,172 7,94,076
Schedule – L OTHER INCOME
For Taxation 9,55,400 18,15,227 For Gratuity and Unavailed Leave 6,517 5,628 For Fringe Benefit Tax – 558
9,61,917 18,21,413
Schedule – J PROVISIONS
Feldspar Powder 2,62,65,959 2,37,05,689 2,62,65,959 2,37,05,689
Schedule – K SALES
Schedule – H LOANS AND ADVANCES AND OTHER CURRENT ASSETS
Quality Minerals Limited | 111
Schedules forming part of the Accounts
Schedule – P ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
31.03.2009 31.03.2008
Closing StockFeldspar Lumps 5,28,859 4,34,518
5,28,859 4,34,518 Less :Opening StockFeldspar Lumps 4,34,518 4,61,934 Increase / (Decrease) 94,341 (27,416)
Schedule – M INCREASE / (DECREASE) IN STOCK
(Amount in Rupees)
Raw Materials Consumed 1,55,31,514 1,54,04,861 1,55,31,514 1,54,04,861
Schedule – N MATERIALS
Salaries,Wages and Bonus 2,74,793 2,19,759 Miscellaneous Expenses 30,364 22,470 Grinding Charges 78,83,638 67,05,789 Freight Charges – 69,443 Directors Remuneration 3,00,000 3,00,000 Payment to Auditors :-
Audit Fees 9,927 6,742 Other Services 24,354 15,927
85,23,076 73,40,130
Schedule – O MANUFACTURING AND OTHER EXPENSES
A. Significant Accounting Policy1) Basis of Accounting
The Company prepares its accounts under the historical cost convention on accrual basis, except otherwise stated in accordance withnormally accepted accounting principles and applicable Accounting Standards in India.
2) SalesSales are recognised on dispatch of goods by the Company and are reflected in accounts at net realisable value.
3) Fixed Assets & DepreciationFixed Assets are shown at cost less depreciation. Depreciation has been charged at the rates specified in Schedule XIV to theCompanies Act, 1956.
4) Valuation of InventoryRaw material is valued at lower of cost or net realisable value.
5) Earning per ShareThe earnings considered in ascertaining the Company's earning per share comprises of the net profit after tax. The number of sharesused in computing basic earning per share is weighted average number of shares outstanding during the year.
112 | Quality Minerals Limited
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:
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 deemedpublic Company and Registrar of Companies, Rajasthan, Jaipur has already made necessary endorsement on the Certificate.
Schedules forming part of the AccountsSchedule – P ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Name of the Related Party Nature of Nature of 31.03.2009 31.03.2008Relationship Transaction
1. Hindusthan National Glass and Industries Ltd. Holding Company Income:Sales 26,265,959 23,705,689
2. Glass Equipment (India) Ltd. Under common Income:control Interest on loan 682,500 682,500
3. Smt. Amita Somany Managing ExpensesDirector Remuneration 300,000 300,000
B. Notes on Accounts1) Taxation
Tax expenses for the year, comprising current tax and deferred tax is included in determining the net profit for the year. A provisionis made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws.
4) In consonance with Accounting Standard - 22 on "Accounting for Taxes on Income" issued by “The Institute of Chartered Accountantsof India”, during the year the Company has made provisions for deferred tax assets / liabilities.
5) Deferred Tax:
31.03.2009 31.03.2008
2) Sundry Debtors include :- Due from holding Company 63,54,829 55,41,637
3) Amount paid or credited to the Auditors :Audit Fee 6,618 6,742Tax Audit Fee 3,309 –Management Services and Certification work 24,354 15,927Total 34,281 22,669
(Amount in Rupees)
Opening Balance Charge to Profit Closing Balance & Loss Account
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 assets in the financial statements and income tax return 34,497 (645) 35,142Total (A) 34,497 (645) 35,142Deferred Tax Assets:Provision of leave encashment 2,440 (2,216) 224Total (B) 2,440 (2,216) 224Net Deferred Tax Liability Total (A - B) 32,057 (2,861) 34,918
Quality Minerals Limited | 113
9) Earning Per Share
10) Schedule A to P form an integral part of Balance Sheet as at March 31, 2009 and Profit & Loss Account for the year ended on thatdate.
11) Previous year figures have been re-grouped or re-arranged wherever considered necessary.
12) Figures have been rounded off to the nearest rupee.
C. Information pursuant to paragraphs 3 & 4 of Part II of Schedule VI of the Companies Act, 1956.1) Capacity & Actual Production:
The Company does not have any outstanding dilutive potential equity shares.
Consequently the basic and diluted earning per share of the Company are the same.
2) Purchase, Stock and Sales:
3) Raw Material Consumed:
Schedules forming part of the AccountsSchedule – P ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
Class of Goods Units Licensed Capacity Installed Capacity Actual Production
Feldspar Powder M.T. N A N A 15,989.67(13,038.28)
Opening Stock Purchase Closing Stock Sales/ Consumption
Feldspar PowderUnit (MT) – – – 15,989.67
(13,038.28)Value (Rupees) – – – 26,265,959
(23,705,689)Feldspar LumpsUnit (MT) 509.290 18,845.135 505.285 18,849.140Value (Rupees) 434,518 15,531,514 528,859 15,437,173
31.03.2009 31.03.2008Units (MT) Value (Rupees) Units (MT) Value (Rupees)
Feldspar Lumps 18,849.14 15,437,173 18,610.90 15,244,185
31.03.2009 31.03.2008
Net Profit attributable to Share Holders 21,04,094 10,52,548Weighted average number of equity shares 9,410 9,410Basic earning per share of Rs 100/- each 223.60 111.85
(Amount in Rupees)
114 | Quality Minerals Limited
Schedules forming part of the AccountsSchedule – P ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
As per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants
J.M. Vyas D.D. Taparia Amita SomanyPartner Director Managing DirectorJaipurJune 1, 2009
D. 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)
2 0 0 9
1 7
Item Code No. (ITC code) Product Descriptions
V. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)
Public Issue
N . A . N . A .
N I L
Right Issue
N I L
Bonus Issue
N I L
Private Placement
N I L
III. Position of Mobilisation and Deployment of Funds (Amount in Rs ‘000)Total Liabilities
1 5 4 5 0
Total Assets
1 5 4 5 0
IV. Performance of the Company (Amount in Rs ‘000)Turnover
2 7 1 4 5
Total Expenditure
2 4 0 7 2
(Please tick Appropriate box + for Profit, – for Loss)
Earning per Share in Rs
2 2 3 . 6 0
Dividend %
N I L
Sources of FundsPaid-Up Capital
9 4 1
Reserves and Surplus
1 4 4 7 4
Secured Loans
N I L
Unsecured Loans
N I L
Deferred Tax Liability
3 5
Application of FundsNet Fixed Assets
2 2 1
Investments
1 2 0
Net Current Assets
1 5 1 0 9
Miscellaneous Expenditure
N I L
Accumulated Losses
N I L
+ – Profit/Loss before Tax
√ 3 0 7 3
+ – Profit/Loss after Tax
√ 2 1 0 4
Hindusthan National Glass & Industries Limited | 115
Auditors’ Report
To the Board of Directors of Hindusthan National Glass & Industries Limited on the Consolidated Financial Statements 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 associate as at March 31,
2009, 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 mis-statements.
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) Limited and Quality Minerals
Limited for the year ended March 31, 2009 whose financial
statements reflects total assets of Rs 3544.22 lacs as at March
31, 2009 and total revenues of Rs 3147.36 lacs and cash flows
amounting to Rs (1.72) lacs for the year ended as on March 31,
2009. 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. We did not audit the financial statements of associate Company
HNG Float Glass Limited. The Financial Statements of HNG Float
Glass Limited for the year ended March 31, 2009 as compiled
for the purpose of consolidation have been prepared by the
management and these are subject to audit by their auditors
and in our opinion, in so far as it relates to the amounts included
in respect of such associate, is based solely on the said accounts.
5. Attention is invited to Note 24E of Schedule S regarding
purchase of goods for which central Government approval as
required in terms of provisions of Companies Act, 1956 has not
been obtained by the Company.
6. Subject to Para 4 and 5 above, 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 associate 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 associate as
at March 31, 2009 ; 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 associate as at 31, 2009; 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 associate for
the year then ended on that date ; and
c) in the case of the Consolidated Cash Flow Statement,
of the consolidated cash flows of the Company and its
subsidiary companies and associate for the year then
ended on that date.
For Lodha & Co.
Chartered Accountants
H K Verma
Kolkata Partner
June 20, 2009 Membership No: 55104
116 | Hindusthan National Glass & Industries Limited
The Schedules referred to above form an integral part of Consolidated Balance SheetAs per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director
H. K. Verma Priya Ranjan Nirmal KhannaPartner Company Secretary Sr. Vice President andKolkata Chief Financial OfficerJune 20, 2009
Consolidated Balance Sheet As at March 31, 2009
(Rs in lacs)
Schedules As at 31.03.2009 As at 31.03.2008
SOURCES OF FUNDS
Shareholders' Funds
Share Capital A 1746.77 1746.77
Reserves and Surplus B 93153.70 86244.22
94900.47 87990.99
Loan Funds
Secured Loans C 41804.23 28957.70
Unsecured Loans D 9210.65 13127.61
51014.88 42085.31
Deferred Tax Liabilities (Net) 4207.24 1845.04
Total 150122.59 131921.34
APPLICATION OF FUNDS
Fixed Assets E
Gross Block 139393.60 127459.54
Less : Depreciation 48553.01 42181.15
Net Block 90840.59 85278.39
Capital Work-In-Progress 8203.39 4510.60
Investments F 10213.07 11394.50
Current Assets, Loans and Advances
Inventories G 22784.41 17343.27
Sundry Debtors H 22723.03 16456.51
Cash and Bank Balances I 1175.74 1701.48
Loans and Advances and Other Current Assets J 19909.53 14059.66
66592.71 49560.92
Less:
Current Liabilities and Provisions
Current Liabilities K 19399.72 14399.63
Provisions L 6327.45 4423.44
25727.17 18823.07
Net Current Assets 40865.54 30737.85
Total 150122.59 131921.34
Significant Accounting Policies & Notes on Accounts S
Hindusthan National Glass & Industries Limited | 117
The Schedules referred to above form an integral part of Consolidated Profit and Loss AccountAs per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director
H. K. Verma Priya Ranjan Nirmal KhannaPartner Company Secretary Sr. Vice President andKolkata Chief Financial OfficerJune 20, 2009
Consolidated Profit and Loss Account For the year ended March 31, 2009
(Rs in lacs)
Schedules 31.03.2009 31.03.2008
INCOMESales M 146105.65 115867.01 Less : Excise Duty 13049.49 12954.42
133056.16 102912.59 Other Income N 2174.21 1122.98 Increase / (Decrease) in Stock O 1403.94 (460.84)
136634.31 103574.73 EXPENDITUREMaterials P 40844.61 30018.52 Manufacturing and Other Expenses Q 71904.55 51908.76
112749.16 81927.28 Profit before Depreciation, Interest and Tax 23885.15 21647.45 Depreciation 7850.97 7371.65 Transferred From Revaluation Reserve (306.68) (281.21)
7544.29 7090.44 Interest and Finance Expenses R 4369.55 2365.07
11913.84 9455.51 Profit before Tax 11971.31 12191.94 Less : Provision for Income Tax
- Current Tax 161.35 99.01 - Minimum Alternate Tax 1310.00 1367.20 - Less: MAT Credit Entitlement 355.00 955.00 1367.20 –- Fringe Benefit Tax 51.64 38.20 - Deferred Tax (6.99) (2683.19)- Income Tax for Earlier years (7.87) (1300.18)
Profit after Tax 10818.18 16038.10 Less: Share in Associate 181.66 –Net Profit before Minority Interest 10636.52 16038.10
- Concern Share 10637.21 16038.74 - Minority (0.69) (0.64)
Add: Balance brought forward from last year 810.62 620.23 Amount Available for Appropriation 11447.83 16658.97 APPROPRIATIONSGeneral Reserve 7200.00 15000.00 Debenture Redemption Reserve 1250.00 –Proposed Dividend on Equity Shares 899.79 725.11 Tax(including Cess) on Proposed Dividend 152.92 123.24 Balance carried to the Balance Sheet 1945.12 810.62
11447.83 16658.97 Basic and Diluted Earning per Share of Rs 10/- each 60.90 91.82 Significant Accounting Policies and Notes on Accounts S
118 | Hindusthan National Glass & Industries Limited
Consolidated Cash Flow Statement For the year ended March 31, 2009
As per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director
H. K. Verma Priya Ranjan Nirmal KhannaPartner Company Secretary Sr. Vice President andKolkata Chief Financial OfficerJune 20, 2009
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 Year’s figures have been regrouped wherever necessary to conform to the Current Year.
(Rs in lacs)
2008-09 2007-08
A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before Tax and extraordinary items 11971.31 12191.94Adjustments to reconcile profit before tax to cash provided by operating activities.Depreciation 7544.29 7090.44Bad Debts and Provision for Doubtful Debts 205.54 239.25 Interest Expenses (Net) 4369.55 2365.07 Dividend Income (166.71) (0.26)Liability/Provision no longer required written back (515.16) (97.38)Provision for Diminution in value of Investments (0.23) 0.17 Prior Period Income – (3.03)Interest received (498.39) (132.09)(Profit) / Loss on sale of Fixed Assets (Net) 134.04 71.56 (Profit) / Loss on sale of Current Investments (Net) (119.10) (8.15)Operating Profit before working capital changes 22925.14 21717.52 Changes in current assets and liabilitiesLoans and Advances (148.06) (4600.86)Trade and other Receivables (6472.06) (4030.18)Inventories (5442.20) (537.45)Trade and other Payables 4058.65 3853.33 Net Cash Generated by Operating Activities 14921.47 16402.36 Adjustments for :Direct Taxes Paid (1550.88) (149.63)Fringe Benefit Tax Paid (42.84) (38.27)Net Cash from Operating Activities 13327.75 16214.46
B. CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Fixed Assets and Changes in Capital Work in Progress (16617.50) (12927.73)Proceeds on Disposal of Fixed Assets 680.78 169.82 Purchase of Long Term Investment (0.27) (4367.93)Sale of Long Term Investment – 42.93 Purchase of Current Investments – (5794.44)Sale of Current Investments 1119.10 5802.59 Share Application Money (3500.00) –Dividend received 166.71 0.26 Interest received 235.33 59.53 Net Cash used in Investing Activities (17915.85) (17014.97)
C. CASH FLOW FROM FINANCING ACTIVITIESProceeds/(Repayment) from long term borrowing (Net) 17041.95 810.38 Proceeds/(Repayment) from short term borrowings (Net) (8112.38) 3035.44 Dividend paid including Corporate Dividend Tax (848.05) –Interest paid (4019.16) (2349.58)Net Cash from Financing Activities 4062.36 1496.24 Net changes in Cash and Cash equivalents (525.74) 695.73 Opening Cash and Cash equivalents 1701.48 1005.75 Cash and Cash equivalents at the end of the year 1175.74 1701.48 (represents Cash in Hand and Bank balances)
Hindusthan National Glass & Industries Limited | 119
Schedules forming part of the Consolidated Accounts
31.03.2009 31.03.2008
Authorised51,15,00,000 Equity Shares of Rs 10/- each (Previous Year 51,15,00,000 shares of Rs 10/ each) 51150.00 51150.00
51150.00 51150.00 Issued, Subscribed and Paid-Up1,74,67,713 Equity shares (Previous Year 1,10,43,368 shares) of Rs 10/- each fully paid up of 1746.77 1104.34
which 58,10,360 Equity Shares of Rs 10/- each were allotted as fully paid up Bonus shares by Capitalisation of General Reserve and 64,24,345 Equity Shares of Rs 10/- each issued as fully paid up pursuant to a Scheme of Amalgamation and arrangement for consideration other than cash.
Share Suspense Account (pending allotment pursuant to the Scheme of Arrangement) – 642.43 1746.77 1746.77
Schedule – A SHARE CAPITAL
Schedule – B RESERVES AND SURPLUS
(Rs in lacs)
31.03.2009 31.03.2008
Capital Reserve on Consolidation 2.90 2.90Investment Allowance Reserve 0.57 0.57General ReserveAs per last Balance Sheet 60774.76 17740.09Add/(Less) adjustment as referred to in note no. 26 (a) of Schedule "S" 7199.53 67974.29 43034.67 60774.76 Revaluation ReserveAs per last Balance Sheet 11101.53 3388.73Add/(Less) adjustment as referred to in note no. 26 (b) of Schedule "S" (305.37) 10796.16 7712.80 11101.53Debenture Redemption ReserveAdd/(Less) adjustment as referred to in note no. 26 (c) of Schedule "S" 1250.00 –Share PremiumAs per last Balance Sheet 13553.84 1104.30Add/(Less) adjustment as referred to in note no. 26 (d) of Schedule "S" 2369.18 11184.66 12449.54 13553.84Profit & Loss AccountSurplus as per Profit & Loss Account 1945.12 810.62
93153.70 86244.22
120 | Hindusthan National Glass & Industries Limited
Schedules forming part of the Consolidated Accounts
Note: ** Represents Mibor linked Non-Convertible Debentures privately placed with LIC Mutual Fund (previous year with JM Mutual
Fund).
Short Term LoansFrom Banks 5000.00 8555.45 Non Convertible Debentures * 2500.00 3000.00 From Others – 27.04
OthersTrade Deposits 100.10 100.10 Deferment Loan 1610.55 1445.02
9210.65 13127.61
Notes 31.03.2009 31.03.2008
I) 12.75% Redeemable Non Convertible Debentures 1 and 2 10000.00 –II) Rupee Term Loans
From Financial InstitutionExport Import Bank of India 2 5304.17 6327.78
From BanksState Bank of India 2 and 3 5996.00 2432.00 The Honkong & Shanghai Banking Corporation Limited 4 9437.50 4562.50
III) Foreign Currency LoansFrom Banks
The Honkong & Shanghai Banking Corporation Limited - PCFC – 599.16ICICI Bank Limited - External Commercial Borrowing 2 1929.38 2005.50
IV) Working Capital Borrowing from Banks 5 8514.12 12709.54 V) Loans under Finance Schemes
From Banks 6 449.07 293.05 From Others 6 136.43 7.13
VI) Interest accrued and due thereon 37.56 21.04 41804.23 28957.70
Notes:1) 12.75% Secured Non Convertible Debentures amounting to Rs 100 crores, privately placed (alloted on December 22, 2008) are due for
redemption at par in three equal installments at the end of 5th, 6th and 7th year from the date of allotment with put/call option at parat the end of 3rd year from the date of allotment.
2) The loans are secured by first charge ranking pari-passu with other first charges created on all immovable properties by way of equitablemortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh and Neemrana Plants, save andexcept specific assets exclusively hypothecated in favour of respective lenders.
3) These loans are also collaterally secured by second charge on Current Assets of the said plants.
4) The loans are secured by first charge ranking pari-passu with other first 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 Rishikesh, Pondicherry andNashik Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.
5) This is secured by hypothecation of inventories (both present and future) and book debts and second charge on all immovables, moveableproperties including land and building in favour of consortium bankers led by State Bank of India.
6) These are secured by hypothecation of the vehicles financed in favour of respective lenders.
Schedule – C SECURED LOANS
(Rs in lacs)
Schedule – D UNSECURED LOANS
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GROSS BLOCK DEPRECIATION NET BLOCK Particulars Book Value Additions Deductions/ Book Value Upto For the Deductions/ Upto As on As on
at 01.04.2008 Adjustments at 31.03.2009 01.04.2008 year Adjustments 31.03.2009 31.03.2009 31.03.2008
Land 12222.72 28.03 – 12250.75 5.60 – – 5.60 12245.15 12222.72Leasehold Land 2009.07 39.29 – 2048.36 – 13.03 – 13.03 2035.33 2003.47Buildings 13375.63 335.36 (49.77) 13760.76 2460.94 426.15 – 2887.09 10873.67 10914.69Leasehold Buildings 9.18 – – 9.18 0.18 0.16 – 0.34 8.84 9.00Plant and Machinery 97740.34 12883.56 2104.12 108519.78 38883.27 7141.00 1360.09 44664.18 63855.60 58857.07Furniture and Fixtures 360.27 42.30 82.79 319.78 153.57 18.24 3.62 168.19 151.59 206.70Office and Other Equipments 373.94 50.77 11.09 413.62 194.89 41.39 11.10 225.18 188.44 179.05Vehicles 1306.59 572.98 145.70 1733.87 442.71 168.69 104.30 507.10 1226.77 863.88Computer Software 61.80 275.70 – 337.50 39.99 42.31 – 82.30 255.20 21.81Total 127459.54 14227.99 2293.93 139393.60 42181.15 7850.97 1479.11 48553.01 90840.59 85278.39Previous Year 108304.51 21071.35 1916.32 127459.54 36423.69 7371.65 1614.19 42181.15 85278.39
Schedule – E FIXED ASSETS
Face Value (Rs.) Nos. 31.03.2009 31.03.2008
A) Long TermTradeFully Paid up Equity SharesUnquoted Capexil Agencies Ltd. 1000 5 0.05 0.05 Ceramic Decorators Ltd. 10 7 0.00 0.00HNG International Ltd 10 134 0.27 – AssociateHNG Float Glass Ltd. 10 42010000 4201.00 4201.00 Less: Share of Loss for the year 181.66 –
4019.34 4201.00Other than TradeUnquoted Units of CAN FMP 13M-SRI (close ended) 10 – 1000.00 Fully Paid up Equity SharesThe Calcutta Stock Exchange Association Ltd. 1 8364 167.28 167.28 Beneficial interest in Shares held in HNG Trust 7.55 7.55 Beneficial interest in Shares held in ACE Trust 6009.35 6009.35 Surendra Khanij Pvt Ltd. 10 12000 1.20 1.20 Hasow Automation Ltd. – 4.73 Less: Provision for diminution in Investments – 4.73 GOVERNMENT SECURITIES Unquoted Deposited with Government 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 6.49
B) CurrentOther than TradeQuoted Kajaria Ceramics Ltd. 2 5470 1.52 1.56 # Rs 0.42 lacs since matured but not encashed 10213.07 11394.50Aggregate amount of Quoted Investments 1.52 1.56 Aggregate amount of Unquoted Investments 10211.55 11392.94
10213.07 11394.50
Schedule – F INVESTMENTS
(Rs in lacs)
Note: Market Value of Quoted shares Rs. 1.52 lacs (Previous Year Rs. 1.56 lacs)
122 | Hindusthan National Glass & Industries Limited
Schedules forming part of the Consolidated Accounts
31.03.2009 31.03.2008
(As valued and certified by the Management)Raw Materials 5104.22 3299.50 Stores, Spare parts, Fuel and Building Materials 9205.19 7189.34 (Including in Transit Rs 238.94 lacs, Previous Year Rs 172.48 Lacs)Packing Materials 640.44 423.81 Stock in Process 625.10 546.37 Finished Goods 7209.46 5884.25
22784.41 17343.27
Schedule – G INVENTORIES
(Rs in lacs)
(Unsecured, considered good unless otherwise stated)Debts due for a period exceeding six months
Considered good 2733.33 939.95 Considered doubtful 863.04 991.53
3596.37 1931.48 Less: Provision for doubtful debts 863.04 991.53
2733.33 939.95 Other Debts 19989.70 15516.56
22723.03 16456.51
Schedule – H SUNDRY DEBTORS
Cash balance on hand 30.63 31.52 Cheques in hand 255.27 1078.26 Balances With Scheduled Banks
in Current Accounts 851.37 533.41 in Fixed Deposit Accounts * 38.46 18.25 in Margin Money Accounts * – 40.03
Balances With Post Office in Saving Bank Account 0.01 0.01 * (Receipts pledged with the banks and Government authorities for Rs 21.61, Previous Year Rs 57.18 lacs)
1175.74 1701.48
(Unsecured and Considered good)LoansTo Bodies Corporate 3049.50 4724.00 Advances Recoverable in cash or in kind or for value to be received 2392.02 2108.21 (Net of Doubtful Advances Rs 238.02 lacs, Previous Year Rs 240.65 lacs)VAT Credit (Inputs) Account 593.85 613.24 Share Application Money 3500.00 –Advance Income Tax 4896.86 3190.26 Tax Deducted at Source 364.70 175.80 Advance Fringe Benefit Tax 85.00 41.75 MAT Credit Entitlement 1722.57 1367.57 Deposits and balances with Government Authorities and Others Department 2902.21 1586.35 Other Deposits 25.55 155.10
19532.26 13962.28 Other Current AssetsInterest accrued on Investments 2.35 1.79Interest Receivable 352.75 85.35 Fixed Assets Held for disposal (at lower of net book value or estimated net realisable value) 22.17 10.24
19909.53 14059.66
Schedule – J LOANS AND ADVANCES AND OTHER CURRENT ASSETS
Schedule – I CASH AND BANK BALANCES
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31.03.2009 31.03.2008
Sundry CreditorsDues to Micro, Small & Medium Enterprises 68.34 55.68 Others 15809.93 13340.75
Interest accrued but not due on Loans 454.64 104.25 Commission to Directors 139.09 118.40 Other Liabilities 2927.40 780.53Unclaimed dividend 0.32 0.02 * This is not due for payment to Investor Education & Protection Fund.
19399.72 14399.63
Schedule – K CURRENT LIABILITIES
(Rs in lacs)
For Taxation 3898.23 2445.13 For Gratuity and Unavailed Leave 1282.51 1088.01 For Fringe Benefit Tax 94.00 41.95 For Proposed Dividend 899.79 725.11 For Tax on Proposed Dividend 152.92 123.24
6327.45 4423.44
Schedule – L PROVISIONS
Finished Goods 145845.14 115000.57 General Merchandise Sale 76.95 163.03 Others 183.56 703.41
146105.65 115867.01 Less: Excise Duty 13049.49 12954.42
133056.16 102912.59
Schedule – M SALES
Hire charges and Lease Rental 1.20 24.54 Dividends on Trade and Long Term Investments 166.71 0.26 Interest on- Loan 428.47 51.93 - Deposits 49.87 20.18 - Investments 0.62 0.07 - Others 2.21 0.21 - Tax Refunds 17.32 0.52 Rent 39.93 34.38 Insurance Claims 9.62 1.98 Miscellaneous Receipts 808.32 483.53 Liabilities / Provisions no longer required written back 515.16 97.38 Profit on Assets Sold/Discarded 15.68 15.46 Profit on Sale of Current Investment - Other than Trade 119.10 8.15 Foreign Exchange Fluctuations (Net) – 310.07 Income from derivatives – 71.29 Prior Period Income – 3.03
2174.21 1122.98
Schedule – N OTHER INCOME
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Schedules forming part of the Consolidated Accounts(Rs in lacs)
Raw Materials Consumed 40553.79 29646.93 Purchase of Trading Material 290.82 371.59
40844.61 30018.52
Schedule – O INCREASE / (DECREASE) IN STOCK
31.03.2009 31.03.2008
Closing StockFinished Goods 7209.46 5884.25 Work-in-Process 625.10 546.37
7834.56 6430.62 Less :Opening Stock Finished Goods 4765.61Add: Transfer pursuant to scheme of amalgamation 5884.25 1648.06 6413.67 Work-in-Process 424.07Add: Transfer pursuant to scheme of amalgamation 546.37 53.72 477.79
6430.62 6891.46 Increase / (Decrease) 1403.94 (460.84)
Stores and Spare Parts Consumed 7621.57 5111.74 Power and Fuel 36853.90 27200.22 Packing Material Consumed and Packing Charges 9123.08 7605.62 Salaries, Wages, Bonus and Gratuity 5791.90 4514.95 Contribution to Provident and Others Funds 763.03 741.04 Workmen and Staff Welfare Expenses 397.39 439.01 Rent (Including Lease Rent) 93.43 95.43 Rates and Taxes 44.04 58.85 Repair and Maintenance:-
Building 186.95 132.87 Plant and Machinery 932.17 1061.60 Others 239.29 210.98
Freight outwards, Transport and Other Selling Expenses (Net of realisation of Rs 1214.21 lacs, Previous year Rs 983.56 lacs) 1232.83 1004.07 Washing and Grinding Charges 78.84 67.06 Commission on Sales 140.78 116.10 Insurance 153.23 150.22 Charity and Donation 40.93 31.00 Bad Debts/Advances Written Off 265.23 185.81Less: Provision for Doubtful Debts / advances 265.16 0.07 195.92 (10.11)Provision for Doubtful Debtors/Advances 205.47 249.36 Excise Duty on Stock (177.05) (28.93)Director's Remuneration 332.62 280.43 Provision For Loss on Derivative Transactions 1833.05 313.94 Foreign Exchange Fluctuation (Net) 2326.33 –Loss on sale and discard of fixed assets 149.72 87.02 Provision for diminution in value of investments (0.23) 0.17 Miscellaneous Expenses 3541.21 2476.12
71904.55 51908.76
Schedule – Q MANUFACTURING AND OTHER EXPENSES
Schedule – P MATERIALS
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31.03.2009 31.03.2008
On Debentures 429.13 569.50 On Term Loans 2570.41 1510.40 Bank and Others 974.27 153.39 Finance Expenses 395.74 131.78
4369.55 2365.07
Schedule – R INTEREST AND FINANCE EXPENSES
(Rs in lacs)
Notes on the Consolidated Financial Statement of the Company and its Subsidiaries and Associates.1. PRINCIPAL OF CONSOLIDATION
a) The Consolidated Financial Statements have been prepared in accordance with the Accounting Standard 21 (AS 21) on “ConsolidatedFinancial Statements” and Accounting Standard 23 (AS 23) on "Accounting for Investments in Associates in Consolidated FinancialStatements" issued by “The Institute of Chartered Accountants of India”.
b) The Subsidiaries (which along with Hindusthan National Glass & Industries Ltd., the holding Company, constitute the group) havebeen considered in the preparation of these consolidated financial statements are:
d) Consolidation Proceduresi) 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 eliminatingIntra group balances and transactions and the resulting unrealised profit & losses.
ii) Investments in Associate is accounted in accordance with AS-23 on "Accounting for Investments in Associates in ConsolidatedFinancial Statements", under "Equity Method".
iii) The difference between the cost of investment in the associate and the share of net assets at the time of acquisition of sharesin the associate is identified in the financial statements as Goodwill or Capital Reserve as the case may be.
e) Other Significant Accounting PoliciesI. Accounting Convention
The accounts, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been preparedon the basis of the historical cost and on the accounting principles of a going concern. The accounts have been prepared inaccordance with the provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (AccountingStandards) Rules, 2006.
II. Use of EstimatesThe preparation of financial statements require management to make estimates and assumption that affect the reportedamount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and thereported amounts of income and expenses during the year. Difference between the actual results and the estimates arerecognised in the year in which the results are known /materialised.
III. Fixed AssetsFixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have beenrevalued or at fair value as the case may be.
c) Investment in Associate
Schedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
Name of Subsidiary Percentage of voting power either
directly or through subsidiaries as at
31.03.2009 31.03.2008
Glass Equipment (India) Ltd. 100.00 100.00
Quality Minerals Ltd. 99.73 99.73
Name of Associate Percentage of voting power
held as at
31.03.2009 31.03.2008
HNG Float Glass Ltd. 41.33 48.49
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IV. Depreciation and AmortisationTangible Assetsi. Depreciation except otherwise stated has been provided at the rates specified under Schedule XIV to the Companies Act,
1956 on assets installed/acquired up to March 31, 1990 on written down value method and in respect of additions thereafteron straight line method.
ii. Certain Plant and Machinery have been considered as continuous process plant as defined under Schedule XIV to theCompanies 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 asestimated 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 theassets.
v. Second hand machines are depreciated based on their useful lives as estimated by independent technical experts.
Intangible Assetsvi. Computer Softwares are amortised on straight line method @33.33% over a period of three years
V. 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 assetsbelonging to Cash Generating Unit (CGU) exceeds recoverable amount. The recoverable amount is the greater of assets netselling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets arediscounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverableamount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying valueor the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.
VI. InvestmentsLong Term Investments are stated at cost, less provision for diminution in value other than temporary, if any. Current Investmentsare valued at cost or fair value whichever is lower.
VII. InventoriesInventories 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 authoritiesand other expenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost includemanufacturing expenses and appropriate portion of overheads. The cost of inventories is determined on the weighted averagebasis.
Own manufactured moulds used for the manufacture of glass items are recorded at weighted average cost, which includesprime cost, factory and general overheads and the same are classified as stores and spare parts under inventories.
VIII. Foreign Exchange Transactions and DerivativesTransactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreigncurrency monetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereonand also on the exchange differences on settlement of the foreign currency transaction during the year are recognised asincome or expenses in the Profit and Loss Account.
Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency riskon unexecuted firm commitments or of highly probable forecast transactions are recognised in the period in which they ariseand the difference between the forwards rate and exchange rate at the date of transaction is recognised as income/expenseover the life of the contract.
Keeping in view the announcement of “The Institute of Chartered Accountants of India” dated March 29, 2008 regardingaccounting for derivatives, mark to market losses on all other derivatives contracts (other than forward contracts dealt asabove) outstanding as at the year end, are recognised in the accounts.
IX. Revenue Recognitioni) All Expenses and Incomes are accounted for on mercantile basis except otherwise stated.
Schedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
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ii) Income from Export Incentives, insurance and other claims, etc is recognised on the basis of certainties as to its utilisationand related realisation.
iii) Sales are inclusive of Packing Charges and Excise Duty but exclusive of Value Added Tax, Rebates, Discounts and Claims etc.
X. CENVAT / Value Added Tax (VAT) CreditCenvat / VAT credit whenever availed on Fixed Assets is set off with the cost of the assets. Other Cenvat / VAT credit whereveravailed is adjusted with the cost of purchases of Raw Material or Stores as the case may be.
XI. Employee BenefitsEmployee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Planfor its employees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fundwhich are fully funded and administered by the Trustees / Government. The Company contributes to the Employees’ PensionScheme, 1995 for certain categories of employees. Contributions are recognised in the Profit and Loss Account on accrualbasis.
Long-term employee benefits under define benefit scheme such as gratuity, leave encashment etc. are determined at the closeof 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.
XII. Research and DevelopmentRevenue Expenditure on Research and Development is charged to the Profit and Loss Account in the year in which it is incurred.
XIII. Subsidies and GrantsCash Subsidy related to Fixed Assets to the extent received is adjusted to the cost of respective fixed assets. Subsidy related tothe total investment in the project is treated as Capital Reserve. Other Government grants including incentives etc. are creditedto Profit and Loss Account or deducted from the related expenses.
XIV. Borrowing CostBorrowing cost that are attributable to the acquisition/construction of Fixed Assets are capitalised as part of the cost of respectiveassets. Other borrowing costs are recognised as an expense in the year in which they are incurred.
XV. Income TaxProvision for Tax is made for current tax, deferred tax and fringe benefit taxes. Current tax is provided on the taxable incomeusing the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, whichare capable of reversal in subsequent periods are recognised using tax rates and tax laws, which has been enacted orsubstantively enacted. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficientfuture taxable income will be available against which such deferred tax assets will be realised. In case of carry forward ofunabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is “virtual certainty” that such deferredtax assets can be realised against future taxable profits.
XVI. LeaseWhere the Company is the lessee, finance leases, which effectively transfer to the Company substantially all the risks andbenefits incidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of theminimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportionedbetween the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges arecharged 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 thelease (including extended secondary lease term).
Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classifiedas operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-linebasis over the lease term.
XVII. Provision, Contingent Liabilities and Contingent AssetsProvisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as aresult of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nordisclosed in the financial statements. Contingent Liabilities, if material are disclosed by way of notes.
Schedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
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NOTES ON ACCOUNTS
6) Fixed assets at Nashik Plant estimated to have lower residual lives than that envisaged as per the rates provided in Schedule XIV of theCompanies Act, 1956. Depreciation has been provided based on the estimated shorter residual lives as follows:
Particulars of Fixed Assets Rates as Rates of prescribed by Depreciation on
Schedule XIV to assets appliedthe Companies
Act, 1956
Buildings (other than factory buildings) 1.63 2.04Factory Buildings 3.34 5.21Plant and Machinery
Used for single shift operations 4.75 11.44Continuous Process Plant 5.28 11.44Used for Triple Shift operations 10.34 11.44
Furniture & Fixtures 6.33 17.37Computers 16.21 17.95
2008-09 2007-08
2) Contingent liabilities not provided fora) Outstanding Bank Guarantees / Letter of Credit 6410.93 1384.86b) Income Tax matter in respect of erstwhile AGCL under dispute 5.87 9.28c) Sales Tax matter under appeals 216.88 214.25d) Excise Duty and Octroi demand issued against which the Company has preferred appeals
and which in the opinion of the management are not tenable. 1639.10 1703.25e) Cases pending with labour courts (to the extent ascertainable) 544.44 549.60f) 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. 19.19 4.32
h) Other Claims against the Company not acknowledged as debt. 110.54 26.10i) Corporate Guarantee to bank/ Government authorities given on behalf of Somany Foam
Limited. 3235.00 3235.00j) Counter Guarantee furnished to Government and other authorities on behalf of Glass
Equipment (India) Ltd. (Subsidiary Company) – 381.00k) Surety given to Sales Tax department. 50.00 50.75Notes :On the basis of current status of individual cases and as per the legal advice obtained, wherever applicable the management is of the view that no provision is required in respect of these cases. Further Cash outflow in respect of item no. b) to h) as mentioned above is dependent upon outcome of final judgment/decision.
3) In respect of Neemrana Plant a notice has been received from Civil Court filed by the creditors Nil Nilof Haryana Sheet Glass Limited demanding their outstanding payments and stating that plant can not be transferred unless their dues are paid. However, the matter is under dispute/litigation.
4) Capital commitments (Net of advance of Rs 1319.85 lacs previous year Rs 362.51 lacs) 10432.75 1222.375) Capital work in progress includes pre-operative expenses pending allocation.
a) Salary and Wages Nil 23.99b) Power and Fuel 11.24 23.02c) Miscellaneous expenses 150.80 31.21d) Interest on Term Loan 180.16 239.25
Add: Brought Forward from previous year 413.97 163.97Less: Capitalised 756.17 67.47Total Carried Forward Nil 413.97
(Rs in lacs)
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2008-09 2007-08
7) i) Land and Buildings of Rishra and Bahadurgarh units were revalued by an approved 10891.99 10891.99 valuer on April 1, 1992 and on March 31, 2006 on current replacement cost basis. Accordingly, net amount transferred to Revaluation Reserve Account.
ii) a) Plant and Machinery of Rishra and Bahadurgarh units were revalued by an approved 4831.31 4831.31 valuer, on April 1, 1995 on current replacement cost basis.
b) Plant and Machinery of GEIL unit were revalued by an approved valuer on March 31, 419.61 499.962008 by using residual replacement value method. Accordingly, net amount transferred to Revaluation Reserve Account.
iii) Depreciation transferred from Revaluation Reserve Account to Profit and Loss Account. 306.68 281.21
(Rs in lacs)
2008-09 2007-08
a) Payment to Statutory Auditors *i) Audit Fees 5.38 9.38ii) Tax Audit Fees 1.68 1.60iii) Management Services and Certification work 5.30 2.00iv) Reimbursement of Expenses 0.56 0.73
b) Payment to Branch Auditors *i) Audit Fees 4.00 Nilii) Management Services and Certification work 2.31 Niliii) Reimbursement of Expenses 2.99 Nil
8) Miscellaneous Expenses include
2008-09 2007-08
Profit after Tax (Rs in lacs) 10818.18 16038.10Number of shares outstanding 17467713 17467713Earning per share (Basic) (Rs) 60.90 91.82
10) Earning per share
2008-09 2007-08
9) Sundry Creditor include acceptances 4388.48 392.14
11) Financial and Derivative Instruments:a) The Company had entered into certain derivative transactions, the cash flows arising therefrom being recognised in the books of
account as and when the settlements took place in accordance with the terms of the respective contracts over the tenure thereof.However, in pursuance of announcement dated March 29, 2008 of “The Institute of Chartered Accountants of India” on “Accountingfor derivatives” and as a matter of prudence:
i) mark to market loss on account of derivative transaction as on March 31, 2009 estimated to be Rs 510.46 lacs out of which Rs 313.94 lacs has been provided in previous year and balance has been accounted during current year.
ii) in respect of another derivative contract in respect of which the claim raised was at Rs 404.18 lacs as on March 31, 2008 hasceased to exist on November 19, 2008 and Knock Out intimation has since been received during the year. The Claim raised onthe Company interalia including on account of daily range accrual as on March 31, 2009 estimated to be Rs 1636.53 lacsincluding interest has been provided for during the year.
The matters are subjudice and the Company has been legally advised that these contracts are void ab- initio.
* excluding Service Tax
2008-09 2007-08
b) Outstanding derivative instruments 510.46 3993.25c) Foreign currency exposure outstanding as on March 31, 2009 whish has not been
hedged by the derivative instruments:Loans – 9297.11Creditors 3203.02 1779.73Debtors 208.72 1069.01
d) The amount of Exchange Gain/(Loss) of Foreign Currency Transaction adjusted to 362.40 310.07respictive heads of accounts of the Profit and Loss Account
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13) Prior Period item aggregating Rs 448.03 lacs (net) (previous year Rs Nil) has been booked under the head Miscellaneous Expenditure inthe Profit & Loss Account. Pursuant to the Scheme of Amalgamation and Re-organization of Capital (the Scheme) under Section 391 to394 of the Companies Act, 1956, with effect from April 1, 2006 (the appointed date). Ace Glass Containers Limited (AGCL) had mergedwith the Company in the previous year. In terms of the Scheme, all fixed assets were recorded at the fair values as of the appointed date.While recording such assets in the books in the previous financial year, the value of certain assets were overstated / understated. Theseassets have now been restated in current year at their appropriate value by decreasing an amount of Rs 527.77 lacs in the value of fixedassets and prior period income adjustment by Rs 79.74 lacs in respect of discarded assets.
14) a) The breakup of Deferred Tax Assets and Deferred Tax Liabilities is as given below:
Opening as on (Charge)/ Credit Closing as at 01.04.2008 during the year 31.03.2009
Deferred Tax AssetsBrought Forward Losses and unabsorbed depreciation 1956.04 (1959.99) (3.95)Expenses Allowable on Payment Basis 431.97 274.56 706.53Provision for Loss on Derivative transactions 106.71 623.06 729.77Provision for Doubtful Debts 347.69 (54.45) 293.24Total Deferred Tax Assets 2842.41 (1116.82) 1725.59Deferred Tax LiabilitiesDepreciation 4687.45 1245.38 5932.83Total Deferred Tax Liabilities 4687.45 1245.38 5932.83Net Deferred Tax Liabilities (1845.04) (2362.20) (4207.24)
b) In terms of Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 as sanctioned by the Hon’ble High Courtof Calcutta vide its Order dated April 7, 2008 and by Hon’ble High Court at Delhi vide its Order dated March 19, 2008, deferred taxliability of Rs 2369.18 lacs for the holding Company for the year has been adjusted to Share Premium Account.
c) The Company has provided for Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and accordingly, based onevidences MAT Credit of Rs 355.00 lacs (previous year Rs 1367.20 lacs) has been recognised in these accounts.
d) Provision for Income Tax has been made after considering the set off of unabsorbed depreciation and brought forward business lossof erstwhile Ace Glass Containers Limited merged with the Company with effect from April 1, 2006.
15) The Company has incurred Rs 38.26 Lacs (Previous year Rs 7.91 lacs) on account of Research and Development expenses, which has beencharged to Profit and Loss Account.
16) As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard aregiven below:
Defined Contribution SchemeContribution to Defined Contribution Plan, recognised for the year are as under:
Employer’s Contribution to Provident Fund 217.26Employer’s Contribution to Pension Fund 245.41Employer’s Contribution to Superannuation Fund 16.29
The guidance note on implementing Accounting Standard (AS-15) (Revised 2005) on Employees Benefits issued by Accounting StandardBoard (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be made by the employers
2008-09 2007-08
12) a) Electricity duty waiver benefit under State Incentive Schemes and subsidy received under 108.76 81.78 State Incentive has been credited to Power and Fuel Account.
b) Interest subsidy towards Interest on Term Loan receivable under State Investment 75.21 NilPromotion Policy has been adjusted with Interest on Term Loan paid.
c) Amount included in VAT Credit Inputs Account shown under Loans and Advances can 515.23 411.40be utilised only after repayment of corresponding amount of Sales Tax Deferred Loan. The balance amount of Rs 78.62 lacs (previous year Rs 201.84 lacs) is available for utilisation.
(Rs in lacs)
Hindusthan National Glass & Industries Limited | 131
Schedules forming part of the Consolidated AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)
needs to be treated as “Defined Benefit Plan”. According to the management, in consultation to the actuary, it is not practical or feasibleto actuarially value the Provident liability in the absence of any guidance from Actuarial Society of India and also due to the fact thatthe rate of interest as notified by the Government can vary annually. Accordingly, the Company is currently not in a position to provideother related disclosures as required by the aforesaid AS – 15 read with ASB guidance. However, with regard to the position of the fundand confirmation of the Trustees of such fund, there is no shortfall as at year-end.
Defined Benefit PlanThe employees’ gratuity fund scheme managed by Birla Sun Life Insurance is a defined benefit plan. The present value of obligation isdetermined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving riseto additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation forleave 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 thereofare as follows:
II. Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:
III. Expense recognized in the Income statement (Under the head “Contribution to provident and other funds” – Refer Schedule Q)
V. Compensated AbsencesThe actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the company as atMarch 31, 2009 is Rs. 252.19 lacs.
Gratuity Gratuity Leave Encashment Funded Unfunded Unfunded
Liability at beginning of the year 710.07 726.88 203.47Current Service Cost 60.05 66.83 27.46Interest Cost 50.76 57.78 17.06Actuarial (Gain) / Loss 61.81 (98.01) 31.03Benefits paid 66.54 (35.86) 2.07Liability at the end of the year 816.14 717.61 252.19
(Rs in lacs)
Gratuity Gratuity Leave Encashment Funded Unfunded Unfunded
Current Service Cost 60.05 66.83 199.45Interest Cost 50.76 57.78 17.06Expected Return on plan assets 54.80 Nil NilNet Actuarial (Gain) / Loss to be recognized 115.33 (98.01) 31.03Expenses recognized in Profit and Loss account 171.34 26.59 75.54
Gratuity (Funded)
Fair value of plan assets at the beginning of the year 684.93Expected return on plan assets 54.80Actuarial Gain / (Loss) (53.53)Employer contribution 45.87Benefits paid 66.54Fair value of plan assets at the end of the year 665.53
IV. Balance Sheet Reconciliation
Gratuity Gratuity Leave Encashment Funded Unfunded Unfunded
Opening Net Liability 25.13 726.88 203.47Expenses as above 171.35 26.59 75.54Employers Contribution 45.87 35.86 26.81Amount Recognised in Balance Sheet 742.86 717.61 252.19
132 | Hindusthan National Glass & Industries Limited
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The following table shows the distribution of the Company’s Debtors by Geographical market.Sundry Debtors by Geographical Market
The estimates of rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion andother 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 assetsheld, 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 2009-10 is yet to be determined.
17) The Company’s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management thisis only reportable segment, as per the Accounting Standard 17 on Segment Reporting, issued under Companies (Accounting Standards)Rules, 2006.
Geographical SegmentThe following table shows the distribution of the Company’s Sales by Geographical market.
Sales Revenue by Geographical Market
18) The accounts of some of the customers are pending reconciliation / confirmation and Sales Tax deferment loan of Rs 1610.55 lacs issubject to confirmation and the same have been taken as per the balances appearing in the books. A provision of Rs 863.04 lacs (Previousyear Rs 991.53 lacs) is carried in the books against doubtful debts and the management is of the opinion that the same is adequate andno further provision is required there against.
19) In the opinion of the Management/Board of Directors, the “Current Assets and Loans and Advances” have a value on realisation in theordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.
20) Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status ofthe suppliers as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” (the Act). There are no delays inpayment made to such suppliers. There is no overdue amount outstanding as at the balance sheet date. Based on above the relevantdisclosures u/s 22 of the Act are as follows:
Particulars 2008-09 2007-08
Domestic Market 133110.50 110666.67Overseas Market 12734.64 4333.90Total 145845.14 115000.57
(Rs in lacs)
Particulars 2008-09 2007-08
Domestic Market 21801.51 15883.18Overseas Market 921.52 573.33Total 22723.03 16456.51
1. Principal amount outstanding at the end of the year 68.342. Interest amount due at the end of the year Nil3. Interest paid to suppliers Nil
21) 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) Inventories of Stores and Spare Parts include items, which are lying with the Company. A provision of Rs 679.51 lacs (including Rs 61.48lacs for the year) towards obsolescence is carried in the books and the management is of the opinion that the same is adequate and nofurther provision is required there against.
VI. Principal Actuarial assumptions at the Balance Sheet Date
Gratuity Gratuity Leave Encashment Funded Unfunded Unfunded
Mortality Table LICI 1994-1996 LICI 1994-1996 LICI 1994-1996Discount rate (per annum) 7.50 % 8.00 % 8.50 % / 7.50 %Expected rate of return on plan assets (per annum) 8.00 % 8.00 % 8.00 %Rate of escalation in salary (per annum) 5.00% 5.00 % 5.00 %
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Current Year Previous year
Entities Entitiesover which over which
Directors and Directors andDirectors and their relatives Directors and their relatives
Associate their relatives have influence Associate their relatives have influence24(i) 24(ii) 24(iii) 24(i) 24(ii) 24(iii)
IncomeSales of Goods 46.06 3.21 Sales of Fixed Assets 0.42 1.05 Rent Received 27.97 13.20 Interest Received 400.46 47.27 Services Given 0.47 265.14 ExpensesPurchases 2.51 14.56 25.59 Purchase of Assets 1.33 Services Taken 301.14 Remuneration Paid 326.80 271.27 Sitting Fees Paid 0.16 0.01 Interest Paid 38.86 9.84 Purchase of Investments 0.27 4.73 Borrowings and LendingsLendings 4500.00 Borrowings 1501.70 64.00 Guarantee/Corporate Guarantee:Given 3235.00 3235.00 OutstandingsReceivables* 3135.78 4528.88 Payables 28.65 9.47 83.66
(Rs in lacs)
24) Related Party Disclosures as identified by the management in accordance with the Accounting Standard – 18.A) Associate
i) HNG Float Glass Limited
B) Directors and Relativesi) Mr C. K. Somany – Key Management Personnelii) Mr Sanjay Somany – Key Management Personneliii) Mr Mukul Somany – Key Management Personneliv) Mrs Amita Somany – Key Management Personnelv) Mr Bharat Somany – Relative of Key Management Personnelvi) Mr R. R. Soni – Key Management Personnel (with effect from October 27, 2008)
C) Enterprises over which any person described in [B (i) to (v)] above is able to exercise significant influence and with whom theCompany has transactions during the year.i) AMCL Machinery Limitedii) Ceramic Decorators Limitediii) Microwave Merchants Private Limitediv) Mould Equipmentv) Noble Enclave and Towers Private Limitedvi) Somany Foam Limitedvii) Topaz Commerce Limited
Disclosure of transactions between the Group and Related parties and status of outstanding balances as on March 31, 2009
* Companies in which directors are interested as member / director(s). Further, these loans were given by the erstwhile Ace GlassContainers Limited (AGCL) and none of the directors was director in AGCL and accordingly, as advised legally, the provisions of Section295 of the Companies Act, 1956 are not applicable with regard to these loans.
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E) Transactions for purchase of goods with Mould Equipments are covered under Section 297 of the Companies Act, 1956. Steps arebeing taken to obtain Central Government approval for such transactions.
25) Segment Informationa) 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
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.
Reportable Segments Glass Containers Glass Machines Minerals Eliminations Total
2008-09 2007-08 2008- 09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08
I REVENUE
External Sales/services 131103.59 102129.69 1952.57 782.90 133056.16 102912.59
Inter-segment sales/services 646.68 1008.03 262.66 237.06 (909.34) (1245.09)
Total Revenue 131103.59 102129.69 2599.25 1790.93 262.66 237.06 133056.16 102912.59
II RESULT
Segment result 16026.14 13924.75 437.97 228.15 22.87 9.14 (257.02) (164.83) 16229.96 13997.21
Other expenses net of
unallocable income 387.56 (486.90)
Operating profit 15842.40 14484.11
Interest expenses (4376.39) (2371.90)
Interest income 505.32 79.74
Profit from ordinary activities 11971.33 12191.95
Net profit 11971.33 12191.95
Income Tax-Current (153.48) (167.47)
Income Tax-Deferred 6.99 2683.19
Income Tax-Fringe Benefit Tax (51.64) (38.20)
MAT Credit (955.00) 1367.57
Profit after tax 10818.20 16037.04
III OTHER INFORMATION
Segment assets 154783.55 132832.81 2782.39 2521.05 95.05 101.37 (1483.35) (1100.24) 156177.64 134354.99
Unallocated corporate assets (130.20) (130.20) 19672.14 16388.36
Total assets 175849.78 150743.35
Segment liabilities 67726.54 54086.50 654.59 896.13 16.43 49.46 (842.63) (715.29) 67554.93 54316.80
Unallocated corporate liabilities (65.00) (65.00) 12372.54 8436.62
Total liabilities 79927.47 62753.42
Capital expenditure 14446.01 20659.67 44.52 539.93 (262.54) (128.25) 14227.99 21071.35
Depreciation 7698.06 7012.76 158.24 84.11 0.18 0.20 (5.52) (6.63) 7850.96 7090.44
(Rs in lacs)
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26) Adjustment made in Reserve and Surplus Account
2008-09 2007-08
a) General Reserve AccountAdd: Adjustment consequent upon amalgamation of erstwhile Ace Glass Containers Ltd. Nil 31391.22Add: Transfer from Capital Reserve Nil 0.04Add: Transfer from Profit & Loss Account 7200.00 15000.00Less: Adjustment on account of transitional provision under AS-15 Nil 118.63Less: Loss on Ace Glass Containers Limited for the year ended March 31, 2007 Nil 3146.66Less: Carrying Cost of shares held in erstwhile Ace Glass Containers Limited pursuant
to the Scheme of Amalgamation Nil 7.55Less : Merger expenses and others Nil 83.19Less: Minority Interest 0.47 0.56Total 7199.53 43034.67
b) Revaluation Reserve AccountAdd: Adjustment during the year 2.78 8054.76Less: Transfer to Profit and Loss Account 306.68 281.21Less : Adjustment on account of sale/ discard of assets 1.47 60.75Total (305.37) 7712.80
c) Debenture Redemption Reserve AccountAdd: Transfer from Profit & Loss Account 1250.00 NilTotal 1250.00 Nil
d) Share Premium AccountAdd: Adjustment consequent upon amalgamation of erstwhile Ace Glass Containers Ltd. Nil 12449.54Less: Deferred Tax Liability 2369.18 NilTotal (2369.18) 12449.54
(Rs in lacs)
27) Figures for previous year have been regrouped and/or rearranged wherever considered necessary.
28) Schedule "A" to "L" and "S" form part of Consolidated Balance Sheet and Schedule "M" to "S" form part of Consolidated Profit and LossAccount.
As per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director
H. K. Verma Priya Ranjan Nirmal KhannaPartner Company Secretary Sr. Vice President andKolkata Chief Financial OfficerJune 20, 2009
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