A BOTTLE INTO A BRAND - Hindusthan National Glass ...A BOTTLE INTO A BRAND Hindusthan National Glass & Industries Limited 2 Red Cross Place, Kolkata- 700 001 ... in connection with

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Hindusthan National Glass & Industries Limited2 Red Cross Place, Kolkata- 700 001

www.hngindia.com

Hindusthan National Glass & Industries Limited62nd Annual Report, 2007-08

In this Annual Report we have disclosed forward-looking information to

enable investors to comprehend our prospects and take informed

investment decisions. This report and other statements - written and

oral - that we periodically make contain forward-looking statements

that set out anticipated results based on the management’s plans and

assumptions. We have tried wherever possible to identify such

statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’,

‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance

in connection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will be

realised, although we believe we have been prudent in our

assumptions. The achievement of results is subject to risks,

uncertainties and even inaccurate assumptions. Should known or

unknown risks or uncertainties materialise, or should underlying

assumptions prove inaccurate, actual results could vary materially from

those anticipated, estimated or projected. Readers should bear this in

mind.

We undertake no obligation to publicly update any forward-looking

statements, whether as a result of new information, future events or

otherwise.

Disclaimer

A [email protected]

Contents

4 Corporate identity

6 What we achieved in 2007-08

8 Chairman’s strategy

18 Why Glass?

18 Our Strengths

20 10-year performance trend

22 Directors’ Report

30 Management’s Discussion and Analysis

42 Report on Corporate Governance

53 Auditors’ Report

56 Balance Sheet

57 Profit & Loss Account

58 Cash Flow Statement

84 Statement Under Section 212

85 Glass Equipment (India) Limited – Subsidiary Accounts

113 Quality Minerals Limited – Subsidiary Accounts

127 Consolidated Accounts

152 Corporate Information

INDIA POSSESSES THE SECOND

LARGEST POPULATION OF CONSUMERS IN THE WORLD.

These consumers drink beverages. Store medicines.

Eat processed food. Use personal

healthcare products. From container glass bottles.

Every hour. Every day.

Hindusthan National Glass & Industries Limited

(HNGIL) is India’s largest container glass

manufacturer. Enjoying over 65% share of

potentially the second largest market in the world.

2 | Hindusthan National Glass & Industries Limited

IN FACT, HINDUSTHAN NATIONALGLASS & INDUSTRIES LIMITED ISMORE THAN JUST A CONTAINERGLASS MANUFACTURER. IT IS INDIA’S LEADING GLASSPACKAGING SOLUTIONS PROVIDER.

Hindusthan National Glass & Industries Limited | 3


Our background� Promoted by the Somany family who have been in the glass

manufacturing industry for the last five decades

� The HNG Group was founded in 1952 following the

commissioning of India’s first fully automatic glass

manufacturing plant at Rishra (near Kolkata)

Our vision� To create a world-class glass manufacturing plant that

pursues quality, cost reduction, and productivity improvement

in a truly holistic manner leading to customers’, shareholders’,

employees’ and suppliers’ satisfaction. This integrated effort

will result in the Company becoming an industry benchmark

and a role model for systems, processes and results

Our presence� Headquartered in Kolkata

� Pan-India manufacturing facilities at Rishra, Bahadurgarh,

Rishikesh, Pondicherry, Nashik and Neemrana

� The Company’s products are available in 23 countries

Our manufacturing capabilities� An installed capacity of 2575 TPD, the largest in India’s

container glass industry

� Incorporated technology from the best in the industry in

Europe and America

� Operates 11 furnaces and 44 production lines with fully

automatic IS (Individual Section) machines

� All plants equipped with a thorough electronic inspection

system from batch mixing to final packing

� Quality control and R&D sections equipped with

sophisticated instruments, enabling the production of

international quality glassware

� Fully equipped mould manufacturing workshop to

manufacture bottle moulds of all designs and shapes

Our product range

* Bottles range from 5 ml to 3200 ml with downstream

applications in the liquor, beer, beverages, pharmaceuticals,

processed foods and cosmetics industries

� Bottles are produced in three colours (amber, flint and green)

Our recognition� The Company is ISO 9000:2000-certified

� The Company is pursuing ISO 14000 / 18000 / 22000

certifications


Our market position� Undisputed leader in India’s container glass industry with a

market share in excess of 65%

� Our customer profile accounts for the top ten players in the

downstream verticals of our presence

� Services customers with the lowest turnaround time from

design to market in the global container glass industry

Our investor orientation� Shares are listed on the Bombay Stock Exchange and

Calcutta Stock Exchange

� The Company enjoyed a market capitalisation of Rs 848.41

crore on March 31, 2008

� Continuously profitable and dividend paying

Our major customers Food: Hindustan Unilever, Glaxo Smithkline, Nestle, Koeleman,

Global Green, Heinz and Dabur

Pharmaceuticals: Pfizer, Cipla, Glaxo SmithKline, Reckitt

Benckiser, Ranbaxy and Himalaya

Beer: United Breweries, SAB Miller, Asia Pacific Breweries and

South Asia Breweries

Liquor: United Spirits, Pernod Ricard, Diageo, Radico and

Bacardi

Soft drinks: Coca Cola and Pepsi

Our global technology partners � Batch-houses from Zippe (Germany)

� Furnaces from Sorg and Horn (Germany)

� Forehearths from Emhart (USA) / PSR (the UK)

� IS machine control system from Botterro (Italy) / Futronics

� Bottle Transfer from Sheppee (the UK) /Pennekamp

(Germany)

� Annealing lehrs from Pennekamp (Germany) / Carmet (USA)

� Lab inspection machinery from AGR (USA)

� Bottle printing machines from Strutz (USA) and Rosario (the

Netherlands)

Our sectoral spread

Segment 2007-08 (%)

Food 14

Soft drinks 4

Pharmaceutical 16

Liquor 49

Beer 12

Others 5


WHAT WEACHIEVED

IN 2007-08

Profitability� 92.87% increase in topline (gross

sales) from Rs 595.40 crore in 2006-07

to Rs 1148.34 crore.

� 368.22% increase in PAT from

Rs 34.24 crore in 2006-07 to Rs 160.34

crore.

� 821 bps increase in net margin from

5.75% in 2006-07 to 13.96%.

� 103 bps decline in manufacturing

and other expenses as a percent of

total income from 51.70% in 2006-07

to 50.67%.

Acquisitions� Acquisition of the Haryana Sheet

Glass’s Neemrana unit with a

capacity of 140 TPD in October 2007

Operations� Increase in the ‘draw to pack’ ratio

highest in India

� Development of narrow neck press

and blow (NNPB) technology for light

weighting glass bottles

� Employment of management

techniques like Lean Six Sigma and

TPM to improve production efficiency

and quality

Marketing� Initiation of packaging solution

services, comprising pre-bottling

and post-bottling consultancy

� Addition of MNC brands to the

customer list like Carlsberg, inBev,

Crown, Budweiser, Whyte & Mackay

etc., some of which imported their

complete bottling requirements

earlier

Post-balance sheetdevelopments� Initiation of SAP ERP

implementation (to be operational in

2008-09)


2004-05 2005-06 2006-07 2007-08

1,02

8.19

521.

84

426.

70

434.

36

Total income (Rs in crore) EBITDA (Rs in crore)

2004-05 2005-06 2006-07 2007-08

160.

34

34.2

4

23.9

5

31.5

1

PAT (Rs in crore)

2004-05 2005-06 2006-07 2007-08

21.2

6

17.6

4

14.8

6

22.8

2

RONW (%)

2004-05 2005-06 2006-07 2007-08

203.

83

69.2

7

56.7

0

61.4

1

Cash profit (Rs in crore)

2004-05 2005-06 2006-07 2007-08

13.9

6

5.75

5.04

6.70

PAT margin (%)

2004-05 2005-06 2006-07 2007-08

18.6

9

17.3

4

15.5

7

16.0

6

EBITDA margin (%)

2004-05 2005-06 2006-07 2007-08

214.

67

103.

25

73.9

5

75.5

9

Hindusthan National Glass & Industries Limited I Annual Report 2007-08 I 8

“The completion of a recordyear in our history is arelevant time to do threespecific things. Outline our vision. Explain how we expect toget there. And identify all the short-term initiatives that willmake the journey and thedestination a reality.”

Chairman’s strategy


The visionAt HNGIL, our vision is to retain our dominant position in a

growing India, expand into other countries and emerge among

the 10 largest container glass manufacturers in the world.

The journeyAt HNGIL, this vision is realistic and indeed achievable for a

number of reasons, as we expect to:

� Capitalise on the accelerating relocation of glass-

manufacturing capacities from the developed to the developing

countries

� Enhance exports out of India and enter low-cost

manufacturing geographies proximate to large markets

� Acquire large distribution companies with an impressive list

of customers on the one hand, and competent capabilities in

the management of logistics on the other

There is an interesting evolution in the marketplace that makes

the complement of these priorities relevant and important. An

increasing number of customers now negotiate for bottles on

the delivered cost basis; much of the delivery is just-in-time

and there is a growing customer requirement for

comprehensive packaging solutions as, opposed to the

standalone bottle supply.

This increasing need for holistic packaging solutions is a

reflection of the growing influence of the softer side of the

business. No longer are bottle manufacturers merely required to

produce and dispatch; progressive bottle manufacturers like us

are required to co-ordinate with label and cap manufacturers to

ensure that there is a neat fit across the respective products,

enhancing customer convenience. Besides, bottle

manufacturers like us are also required to extend our focus

beyond the physical attributes of the bottle to the efficiency with

which it works on the customer’s filling line. As a result, the

appraisal of a bottle manufacturer’s competence has evolved

from the product as it is to service as it can be.

There are strong reasons for why this environment is likely to

persist.

One, most of our customers lack expertise in converging bottle

design and filling-line efficiency.

Two, there is a growing emphasis on the need to enhance

productivity and generate a superior return on the employed

capital, warranting integrated working between the bottle

manufacturer and the Company.

Three, there is a growing emphasis on aesthetics as a

competitive differentiator, requiring close co-product

development between customers and bottle manufacturers.

Four, a growing number of customers are looking at the overall

cost of packaged solutions, making it imperative for companies

like ours to work closely with label and cap manufacturers in

the area of cost management as well as effective packaging

solutions, promising content integrity.

The initiativesAt HNGIL, we are investing extensively to enhance our

preparedness for this evolving and challenging industry

environment.

� We acquired four units in the recent past and will continue to

do so if they enhance our competitive edge geographic

location, customer acquisition or production costs

� We will leverage our existing relationships with large multi-

national customers and service their growing needs in other

countries with supplies being made out of our facilities in India

� We will bring the most modern management practices into

play to enhance production, reduce cost and strengthen overall

efficiency

� We will strengthen our capacity in equipment manufacture

and emerge as a serious industry supplier

We expect that the implementation of these initiatives will

enhance our capacities, strengthen our draw-to-pack ratio,

enrich our margins, enhance our respect and graduate us from

the largest in India to one of the largest in the world.

C.K. Somany

Chairman



OUR BRANDSTARTS WITH

INNOVATIONHandsome is what handsome does. Our brand is clearly reflected in what we do for our

customers. Protect contents. Reduce costs. Enhance appeal. The last point is

particularly relevant. What we make must look good on retail shelves. What we make

must enhance impulsive purchase. What we make must strengthen the business of our

customers. Through an innovative combination of shape, colour, texture, shine, weight,

emboss and strength. As when we created the Magic Moments vodka bottle for

Radico, one of our leading customers. The aesthetically designed bottle beat the

competitive clutter of a crowded marketplace. The product acquired brand equity, recall

and market share with speed. Strengthening brand profitability. Enhancing customer

viability. Reinforcing client relationships.



OUR BRAND IS CATALYSED BY

SCALEAnytime anywhere. When it comes to an increasing requirement of bottles, few words in

our business sound sweeter to our customers. Because when a customer experiences

growing offtake, the last thing he wants to be told is that capacity is limited. Because

the assurance of anytime availability encourages customers to focus on growing their

businesses rather than worry about raw material security. Because when a brand is

being contemplated, customers need the assurance that bottles will be supplied

continuously and just-in-time anywhere across the country. HNGIL is competently

placed to build on this reality. We have grown our capacity (organically and

inorganically) by 80.07% since the turn of the century. We possess six manufacturing

plants located across the country – Rishikesh in the north to Pondicherry in the south,

Nashik in the west to Rishra in the east. We can deliver bottles just in time, minimising

the need for customers to nurse inventory. Making us a preferred choice for growing

customer brands.

Increasing our revenues through decades-rich partnerships reinforced by enduring

client relationships.



OUR BRAND ISENRICHED BY

KNOWLEDGE Knowledge. We are recognised not only as the largest container glass manufacturer in

India but also the most knowledgeable. Attracting the best glass technologists in the

country. Possessing an insight into technologies. Assets. Productivity. People

management. We leveraged a complement of these realities most visibly in 2007-08,

when we acquired the defunct 140 TPD Neemrana unit of Haryana Sheet Glass. When

we brought in competencies from our other plants. When we took a calculated initiative

in retrofitting assets rather than replacing. When we rolled out our first tonne of output

within only five months of acquisition compared with the industry expectation of eight.

When we transformed what was dismissed as a hopeless case into one of the most

remarkable turnarounds in the container glass industry in recent years.



OUR BRAND ISREFLECTED IN THE

NUMBERSProfitability. This is the living testimony of a vibrant brand. Giving rise to some evident

truths. One, the best brands are the most profitable. Two, the best brands always

increase their profitability. HNGIL is proof. We enhanced the return on our employed

capital by 356 bps from 12.07% in 2006-07 to 15.63% in 2007-08. Reinforced our

EBIDTA margin from 17.34% to 18.69% across the period. Strengthened our book value

from Rs 175.80 to Rs 433.70. Reduced our gearing from 1.28 to 0.55. Enhanced our

interest cover from 5.41 to 9.15. Reported an EVA of Rs 72.06 crore, indicating that we

more than met shareholder expectations during 2007-08.

WHY GLASS?

OUR STRENGTHSIntellectual capital: The experience of

five decades in the holistic

understanding of container glass,

comprising financial, technology,

operational, marketing and people

management competencies

Turnaround expertise: A demonstrated

capability in turning around losing units,

reflected in the rehabilitation of sick units

acquired from Owens Brockway at

Pondicherry and Rishikesh, the Nashik

unit (acquired from Larsen & Toubro)

and the Neemrana unit (acquired from

Haryana Sheet Glass)

Financial depth: A balance sheet size of

Rs 1,194.36 crore (ex revaluation

reserves) with a debt-equity ratio of only

0.55 and cash-bank balances of Rs

16.79 crore (as on March 31, 2008)

Capacity: An installed capacity of 2575

TPD – over 50% of the organised

industry capacity in India.

Brand: A distinctive brand recall of

enhancing customer viability through a

complement of product and service

Customers: Institutional customers in

India comprising prominent multinational

and Indian customers as well as more

than 40 international customers

Vertical presence: A prudent mix of

rapidly growing sectors comprising

liquor, beer, food processing,

pharmaceuticals, household and

personal care

Pan-India presence: A manufacturing

presence in East, North, West and South

India, facilitating quicker customer

deliveries

� Glass is 100% recyclable many times

over without any quantity loss

� Glass is cost-efficient; it is reused and

refilled 30-50 times before being recycled

� Glass containers go from the recycling

bin to the store shelf in as little as 30

days; an estimated 80% of recovered

glass containers are made into new glass

bottles

� Glass preserves content purity and

flavour as it is chemically inert

� Glass packaging is impermeable,

air-tight and transparent; one can see the

freshness of food and beverages before

purchase

� Glass packaging can handle vacuum

or high-pressure sealing, safeguarding

against moisture and oxygen invasion

and protecting from spoilage and

bacteria


� Glass can be customised to absorb

damaging ultraviolet light, ensuring

product purity and taste

� Glass has an inherently longer shelf life

than any packaging material

� Glass is non-porous and impermeable,

so there are no interactions between

glass packaging and products to affect

the flavour of food and beverages

� Glass does not deteriorate, corrode,

stain or fade, so products inside remain

as fresh as when they were bottled

� Glass is made from domestically

plentiful, non-toxic raw materials; it is

FDA-approved

� Glass provides a more aesthetic

solution than plastic packaging

� Glass can store a larger range of

products (packaged food, soft drinks,

medicines and liquor, among others)

than most packaging materials

� Glass provides varied and dynamic

labelling options (applied ceramic, heat

transfer, shrink labelling and engraving)

Promoter interest: A significant equity

holding by the promoter group, reflecting

a high commitment to the business

Efficiency: One of the highest draw-to-

pack ratios among container glass

manufacturers in India today

Integrated: Comprehensive solution

provider, extending from design to

production to delivery to technical

solutions, plus the ability to fabricate

equipment

Market share: A market share in excess

of 65% for container glass in India today.

A market-leading presence across all

segments except pharmaceuticals

Global footprint: A sales presence

across 23 countries today

Competitiveness: A low capital cost per

tonne in an industry marked by a high

cost of capacity creation, deterring fresh

competition

Relationships: Relationship-driven

business model marked by a significant

amount of the revenues in 2007-08 being

derived from customers working with the

Company for more than a decade

Governance: A commitment to

governance reflected in a sizable

representation of Independent Directors

on the Company’s Board

Value-addition: A focus on research-led

innovation (process and product)

resulted in value-added services to

customers and growing realisations


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Rs

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acs


Directors’ Report

We take pleasure in presenting the 62nd Annual Report on the business and operations of your Company, together with the audited

accounts for the year ended March 31, 2008.

Financial highlights

OperationsPursuant to the scheme of amalgamation and reorganisation of

capital under Sections 391 to 394 of the Companies Act, 1956,

(Scheme) with effect from April 1, 2006, Ace Glass Containers

Limited (AGCL) has been merged with your Company.

Consequent to this, the performance of the previous year is not

comparable with the current year. However, even on comparable

basis (without considering the impact of the merger), your

Company has performed well, achieving a 21% growth in revenue

(previous year 25%). PBIT and PBT have also shown a growth of

34% and 78%, respectively (previous year 40% and 70%).

Your Company is entitled, pursuant to sanctioning of the scheme,

Rs in lac

Year ended 31.3.2008 Year ended 31.3.2007

Gross sales (including excise duty) 1,14,834 59,540

Profit before interest, depreciation and tax 21,467 10,325

Interest and finance charges 2,347 1,910

Profit before depreciation and tax 19,120 8,415

Depreciation 7,013 3,312

Profit before tax 12,107 5,103

Provision for tax 37 1,524

Provision for deferred tax (2,664) 191

Tax for earlier year (1,300) (3,927) (36) 1,679

Profit after tax 16,034 3,424

Balance brought forward from previous year 706 907

Amount available for appropriation 16,740 4,331

Appropriation

General reserve 14,850 3,500

Proposed dividend 699 110

Tax on dividend 119 15,668 15 3,625

Balance carried forward to next year 1,072 706


for the tax benefit under Section 72A of the Income Tax Act, 1961;

the tax charges in this year have accordingly been worked out.

DividendIn view of the robust growth in the performance of your Company,

the Directors recommend a dividend of 40% i.e. Rs 4 per equity

share for the current year.

AmalgamationA scheme of amalgamation of Ace Glass Containers Limited with

your Company was sanctioned by the Hon’ble High Courts of

Delhi and Calcutta on March 19, 2008 and April 7, 2008

respectively. The Order of the Hon’ble High Courts were filed with

the respective Registrar of Companies on April 28, 2008. As a

result of the said amalgamation, your Company has achieved

synergy in its operations coupled with more financial leverage.

In terms of Scheme of Amalgamation, 2141448 shares and

4282897 shares (totalling to 6424345 shares) would be allotted

to HNG Trust and Ceramic Decorators Limited respectively. Out

of 4282897 shares allotted to Ceramic Decorators Limited,

1606087 shares are to be under lock-in for a period of 3 years

from the date of their listing at the Bombay Stock Exchange. It

may be mentioned that pursuant to the Scheme of

Amalgamation, 1368872 shares are allotted to Ace Trust.

It is imperative to mention that your Company is beneficiary of

both the above Trusts. In terms of an undertaking given to the

Bombay Stock Exchange, your Company is required to make

disclosures pertaining to utilisation of proceeds of shares allotted

to the above said Trusts until they are extinguished.

ReviewDuring the year, your Company acquired the assets of a glass

container plant located at Neemrana, revamped it and

commenced commercial production from March 2008. The

capital expenditure was financed through long-term borrowings

and internal accruals.

Future outlookThe Indian economy has continued to show a robust growth

during the financial year 2007-08 and the same trend is expected

to continue. Growing disposable income coupled with a change

in the demographic pattern of the population will create more

demand for packaged goods, creating better opportunities for

the Company. The growth in beer, pharmaceutical, food, liquor

and other high-end sectors will drive the growth in the revenue

and profitability of the Company. Your Company continues to

maintain a commanding market share and is equipped to grow

with the expanding market.

DirectorsShri R. K. Daga, Shri Dipankar Chatterji and Shri C. K. Somany,

retire by rotation from the Board of Directors of the Company at

the ensuing Annual General Meeting, and being eligible, have

offered themselves for re-appointment.

Fixed depositsYour Company has not accepted any deposits from the public

within the meaning of Section 58A of the Companies Act, 1956.

Consolidated financial statementsConsolidated financial statements prepared in accordance with

Accounting Standard 21, read with Accounting Standard 23 and

issued by the Institute of Chartered Accountants of India, forms

an integral part of the Annual Report and accounts.

DerivativeThe Company has challenged the validity and legality of a

derivative transaction with Kotak Mahindra Bank Limited. The

matter is sub-judice. Based on the legal advice received, the

contract is void and not tenable. The loss in respect of the said

transaction is indeterminable.

Auditors reportThe Auditors Report read along with Notes on Accounts is self-

explanatory and therefore, does not call for any further comment

under Section 217(3) of the Companies Act, 1956.


Listing on stock exchangesThe Equity Shares of the Company continue to be listed on the

Bombay Stock Exchange Ltd., and the Calcutta Stock Exchange

Association Ltd. The annual listing fees for the year 2007-08 have

been paid to these exchanges.

AuditorsM/s Lodha & Company, Chartered Accountants, statutory

auditor of the Company retire at the conclusion of the ensuing

Annual General Meeting and have confirmed their eligibility and

willingness to accept the office of the statutory auditor, if re-

appointed.

M/s Singhi & Company, Chartered Accountants, have confirmed

their eligibility and willingness to accept the office of the Branch

Auditors of the Company’s units located at Nashik, Pondicherry

and Rishikesh, if appointed.

Directors’ responsibility statement pursuantto Section 217(2AA) of the Companies Act,1956The Directors hereby confirm:

i) that in the preparation of the annual accounts, the applicable

accounting standards had been followed along with proper

explanations related to material departures;

ii) that the Directors had selected such accounting policies and

applied them consistently and made judgments and

estimates that are reasonable and prudent so as to give a

true and fair view of the state of affairs of the Company at the

end of the financial year ended on March 31, 2008 and of the

profit of the Company for the year ended on March 31, 2008;

iii) that the Directors had taken proper and sufficient care for the

maintenance of adequate accounting records in accordance

with the provisions of this Act for safeguarding the assets of

the Company and for preventing and detecting fraud and

other irregularities;

iv) that the Directors had prepared the annual accounts on a

‘going concern’ basis.

Corporate GovernanceThe report on Corporate Governance along with the Certificate

of the auditors M/s Lodha & Co., Chartered Accountants,

confirming the compliance of conditions of Corporate

Governance as stipulated under Clause 49 of the Listing

Agreement entered by the Company with the stock exchanges

forms an integral part of the Annual Report.

Subsidiary companiesParticulars relating to the existing subsidiary companies as

required under Section 212 of the Companies Act, 1956, are

annexed hereto and forms an integral part of the Annual Report.

The consolidated financial statements presented by the

Company include the financial information of its subsidiaries.

ExportDuring the current financial year, direct export turnover was

Rs 4032 lac, compared with Rs 2203 lac achieved during the

preceding year.

Industrial relations and personnelThe Company has taken significant steps towards strengthening

human resource and developing the human resource system,

during the year under review. Industrial relations in the Company

continued to remain cordial and peaceful except for some labour

unrest at the Nashik unit, which has since been resolved.

Statement of employees Statement of particulars of employees as required under Section

217(2A) of the Companies Act, 1956, and rules framed

thereunder forms an integral part of this report.

Conservation of energy, technology absorptionand foreign exchange earning and outgoThe statement containing the required particulars under Section

217(1)(e) of the Companies Act, 1956, read with the Companies

(Disclosure of Particulars in the Report of Board of Directors)

Rules, 1988, are annexed hereto and forms an integral part of

this report.

AcknowledgmentsThe Directors commend the continued commitment and

dedication of the employees at all levels. The Directors also wish

to acknowledge efforts of all the other stakeholders for their

valuable sustained support and encouragement. It is this unity of

purpose that breeds success and your Directors look forward to

receiving similar support and encouragement from the larger

HNGIL family in the years ahead.

For and on behalf of the Board

Kolkata C.K. Somany

June 25, 2008 Chairman


Directors’ ReportAnnexure to the

Information pursuant to Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board

of Directors) Rules, 1988 and forming a part of the Directors’ Report for the year ended March 31, 2008.

I. Conservation of energy

Energy conservation measures taken:

1. Two IS machines were upgraded for maintaining the draw at the optimum level of the furnace for better energy efficiency.

2. Use of VFD in return Cullet Conveyor, in Cullet Yard, reject Cullet Conveyor in Cold End, thereby saving electrical energy.

3. Providing chute in sand silos and cullet silos, eliminating feeding conveyors, thereby saving electrical energy and also

eliminating dusting issues.

Form ADisclosure of particulars with respect to conservation of energy

Particulars Unit Year ended 2007-08 Year ended 2006-07

A. Power and fuel consumption

1. Electricity

a) Purchased unit 000 KWH 1,52,102 69,273

Total amount Rs lac 5,424.10 2,385.49

Average rate/unit Rs 3.57 3.44

b) Own generation

Through diesel/H.P.S oil generation

By generator unit 000 KWH 17,531 55,255

Units per litre of oil 4.31 4.04


c) Own generation (through L.D.O.)

By generator unit 000 KWH 15,490 678

Units per litre of oil 3.73 3.00


d) Own generation (through LNG)

Unit KWH 4,25,44,484 93,86,050

Units per litre of MMBTU of LNG Rs lac 106.64 104.94


2. F-Oil / RFO

Quantity KL 51,809 29,159


Average rate/unit Rs 19,025 15,903


Particulars Unit Year ended 2007-08 Year ended 2006-07

3. L.N.G.

Quantity MMBTU 17,12,334 13,29,208


Average rate/unit Rs 234 222

4. i) L.P.G.

Quantity MT 8,421 3,926



ii) L.D.O.

Quantity KL 7.54 279

Total amount Rs lac 2.29 82.06


iii) H.S.D.

Quantity KL 1,477 113

Total amount Rs lac 425.29 34.82


iv) H.P.S. oil

Quantity KL 20,882 13,060



B. Consumption per unit of production

Electricity KWH 329 351

L.P.G. KG 12.18 10.24

L.D.O. LTR 0.01 0.73

F-Oil/RFO/Equv.Oil LTR 74.94 76.07

LNG MMBTU 2.48 3.47

H.S.D LTR 2.14 0.29

H.P.S. LTR 30.20 34.07


Form B

II. Technology absorption A. Research and Development (R&D)

Research & Development continues to remain a focal point

in our efforts towards improvement. Energy consumption

and absorption have been principal areas of action. As the

Company does not have any exclusive R&D facilities, it

carries out its developmental activities for process innovation

and product development as a part of its business process.

Recently, the Company has set-up a separate technical wing

to focus on the technology development area with respect to

process and products.

B. Technology absorption, adaptation and innovation

Enumerated below are steps taken by the Company towards

technology absorption, adaptation and innovation:

Specific areas of development

� Setting up of a totally computerised, on-line oxygen

monitoring and control system in one furnace leading to fuel

saving and reduction in NOx levels

� With spiralling price hikes in fuels and soda ash, the only

way to counter cost-increase is by increasing the forming

speeds. Various measures/decisions were taken to achieve

the said objective:

a) Installation of the latest pantographic baffle mechanism

to reduce down-time.

b) Installation of two-way air operated funnel mechanisms to

reduce down-time.

c) Blow-side vacuum installed to improve body finish.

� Light-weighting continues to be our effort line to remain

competitive with other packing alternatives. The Company

has commercialised the NNPB process for achieving this

target

� Installation of a servo shear mechanism has reduced the

consumption of compressed air and minimised the shear

cutting trouble at high speeds to reduce defects like shear

cutting mark, thus improving the quality of the product

� Installed graphodical shear spray bar to reduce the

consumption of RO water

� Vacuum pump has been installed in all the IS machines for

improving air compression at the Rishikesh plant

C. Future plans of action

Your Company continues to work on such implementations

as stated earlier and after successful implementation of one

line at a particular plant, the same system are implemented

at various lines across different plants. The reduction in

energy cost through better technology and process

development remains our focal point.

D. Expenditure on R&D

During the year, expenditure incurred on research and

development are as enumerated below: (Rs in lac)

2007-08

a. Capital –

b. Recurring 7.91

c. Total 7.91

d. Total R&D expenditure as a percentage

of the turnover Negligible

III. Foreign exchange earnings and outgo:Your Company is constantly looking for foreign markets and

at present it has a strategic presence in the overseas markets

of Bangladesh, USA, South Africa, Kenya, Australia and

Hong Kong, to name a few. The foreign exchange earning

and outgo of the Company is as enumerated below.

(Rs in lac)

2007-08 2006-07

(i) Earnings in foreign exchange

(excluding indirect exports of

Rs 3,009.80 lac; previous year

Rs 969.98 lac and exports to

Nepal Rs 169.19 lac; previous

year Rs 114.40 lac) 4,032.46 2,203.03

(ii) Expenditure incurred in foreign

exchange:

1. Raw materials 5,698.52 4,335.33

2. Capital goods 1,939.26 3,231.02

3. Components, spare parts &

repairs 1,497.50 895.57

4. Other expenses 272.24 169.45


Kolkata C.K. Somany



To whom it may concern

The Board of Directors, at its meeting held on October 31, 2005 had appointed Mr Sanjay Somany (Managing Director), Mr Mukul

Somany (Joint Managing Director) as Chief Executive Officers (CEO) of the Company for a period of five years. Further, the Board of

Directors, at its meeting held on June 25, 2008 has appointed Mr R. R. Soni, Senior President as the Chief Financial Officer (CFO) of

the Company.

Pursuant to Clause 49 of the Listing Agreement we, Sanjay Somany, Mukul Somany and R. R. Soni, hereby certify to the Board of

Directors of Hindusthan National Glass & Industries Limited that:

(a) We have reviewed the financial statements and the cash flow statement for the year 2007-08 and that to the best of our knowledge

and belief:

(i) These statements do not contain any materially untrue statements or omit any material fact or contain statements that might

be misleading;

(ii) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting

standards, applicable laws and regulations.

(b) There are, to the best of our knowledge and belief, no transactions entered into, by the Company during the year 2007-08, which

are fraudulent, illegal or violative of the Company’s code of conduct.

(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and have evaluated the

effectiveness of internal control systems of the Company pertaining to financial reporting. We have disclosed to the auditors and

the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps

they have taken or propose to take to rectify these deficiencies.

(d) We have indicated to the auditors and the Audit Committee:

(i) Significant changes in internal control over financial reporting during the year 2007-08;

(ii) Significant changes in accounting policies during the year 2007-08 and that the same have been disclosed in the notes to the

financial statements; and

(iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an

employee having a significant role in the Company’s internal control system over financial reporting.

R. R. Soni Mukul Somany Sanjay Somany

Senior President Joint Managing Director Managing Director

Chief Financial Officer (Chief Executive Officer) (Chief Executive Officer)


Particulars of Employees In Terms of Section 217(2A) ofthe Companies Act, 1956

Sl. Name Age Qualification Date of & Designation Gross Last Employment

No. (Years) Experience in Appointment (Nature of Remuneration held

years Duties) (Rs) (Designation)

1 Mr Sanjay Somany 49 B. Com. 01.10.2000 Managing Director 1,13,33,918/- Glass Equipment

Dip. In Diesel Engg. (To Manage the (India) Ltd.

28 years affairs of the (Managing

Company on day Director)

to day basis)

2 Mr Mukul Somany 42 B. Com (Hons.) 01.04.1985 Jt. Managing Director 1,10,40,000/- None

21 years (To manage the

affairs of the

Company on day to

day basis)

3 Mr R R Soni* 49 B. Com., FCA 13.08.2007 Sr. President & 17,19,328/- Grasim

26 years Chief Financial Industries Ltd.

Officer Sr. Vice President

* Employed for part of the year and was in receipt of remuneration at the rate of not less than Rs 2,00,000/- per month.

Notes:

1. Remuneration includes Salary, Commission, and contribution to P.F, Gratuity and other facilities.

2. Mr C.K.Somany is related to both Mr Sanjay Somany and Mr Mukul Somany and both of them are also related to each other.

3. All appointments of the above employees are contractual.


Sd/-

Kolkata C. K. Somany



Management discussion and analysis

Global industry perspectiveIn 2007, the global packaging industry was estimated at

US$410 billion; the glass segment comprised 8% with an

estimated size of around US$34 billion (Source: Glass

Packaging GIA Report). The hygienic product attributes had a

positive impact on the industry’s growth as organic consumers

rated glass six to eight points higher than competing

packaging materials in terms of environmental safety, flavour

retention, shelf life, form, purity and quality (Source: Newton

marketing survey).

Geographic growth

Region Total CAGR

volume sold 1998-2007

(in billion units) (in %)

North America 70 3.1

South America 46 5.5

Middle East and Africa 15 5.5

Europe 164 5.0

Asia Pacific 146 4.2

Indian perspectiveIndia’s Rs 60,000-crore packaging industry is growing at

around 15%. The glass segment accounts for around 10% of

the total packaging industry. The untapped potential of the

Indian market is reflected in a per capita glass consumption of

around 1.40 kg when compared with 5.9 kgs in China, 4.8 kgs

in Brazil, 10.2 kgs in Japan and around 27.5 kgs in the

developed countries of the West. The double-digit growth in

downstream segments, catalysed by enhanced branding, will

accelerate the industry growth.

Growth and requirements of the end-usersegments

Applications Type of glass Percentage

catering to

application

Beer Amber 70

Pharmaceutical ( < 60 ml) Amber 30

Indian made foreign liquor Flint 42

Soft drinks Flint 21

Pharmaceutical ( > 60 ml) Flint 21

Cosmetics Flint 6

(Source: www.indiamarkets.com)

Growth drivers Economy: GDP growth drives consumer offtake, which, in turn,

accelerates the demand for container glass. In this respect, the

economy has performed attractively: average 8.8% growth in

four years (2003-04 to 2006-07) with 9.6% (in 2006-07) being

the highest in 18 years followed by 9% in 2007-08. This makes

India the fastest-growing economy in the world and the

second-fastest growing country.

India’s glass industry

� Organised market with 18 players

� 80% of the production controlled by the top three players

� Installed capacity 14,66,000 tonnes per annum

� Production of around 11,10,400 TPA of flint glass bottles,

8,35,650 TPA of amber glass and 2,74,750 TPA of other glass

bottles


GDP growth %

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

4.4 5.8 4.0 8.5 6.9 8.4 9.4 9

[Source: CSO]

Disposable incomes: India’s per capita income strengthened

from US$460 in 2000-01 to US$825.07 in 2007-08 [Source:

Central Statistical Organisation (CSO)], widening its middle-

class, influencing lifestyle changes, evolution from joint to

nuclear families, from single bread earners to working couples.

There has been a marked increase in the use of packaged

foods and beverages, benefiting the container glass industry.

India accounts for 6% of the world’s millionaire population

(Source: Survey by Capgemini SA and Merrill Lynch and Co.),

increasing by 20.5% to 1,00,015 in 2007-08, after Singapore’s

21.2% growth. The total annual income of Indian households is

predicted to grow from Rs 23.5 trillion in 2007 to almost Rs 90

trillion in 2025.

Rising per capita income (Rs)

2004-05 2005-06 2006-07 2007-08

Per capita income 23,890 25,696 27,784 29,786

(Source: Economic Survey 2007-08)

Changing demographics: The country houses the youngest

population in the world with one-fifth of the world’s under-24

population living here. Housing one of the highest proportions

of working population (aged 15 to 64) of around 62.9% in 2006

inevitably paved the path for growing consumerism. Population

in the consuming age bracket (defined as consumers in the 15-

64 age group) as a proportion of the total population has

grown from 61.4% in 1999 to 63.5% in 2004, and is likely to

grow to 65.2% by 2009. The increase in consuming population

coupled with the 1.8% increase in general population is likely to

create a sustained demand for packaged products.

Low-cost producer: India is a low-cost container glass

producer on account of a low relative cost of skilled labour. The

country possesses an abundant source of silica sand,

limestone, dolomite and feldspar. As a result, the cost of

production per pack of glass containers is comparatively lower

in India than abroad.

Capacity relocation: European and American container glass

capacities are being relocated to developing countries. India is

attractively placed to capitalise on this reality due to its

strategic geographical location. The landed price of our

container glass in Europe and the US is competitive with

alternative supplies from other country.

Demand-supply gap: The demand for glass containers

outweighs supply in India on account of growing downstream

consumer segments like food processing, liquor, beer and

pharmaceuticals growing at 20%, 12-16%, 15-20% and 6-8%,

respectively.

Consumption preference: Discerning customers are selecting

glass as a packaging option because it is a pure packaging

choice, the only packaging material for foods and beverages

that is chemically inert. Glass provides a barrier to oxygen and

moisture, protecting a product’s taste and shielding it longer

and better than any other packaging material. When a product

is packaged in glass, it communicates a premium image, taste

and quality.

Safety: Glass is the only packaging material categorised as

‘generally recognised as safe’ by the US Food and Drug

Administration.

Environment friendly: Glass is 100% recyclable. Glass bottles

don’t lose their quality, purity and clarity even after continual

recycling. They can go from recycling bin to the store shelf in

30 days. Using recycled glass (cullet) in the manufacturing

process saves raw materials, lessens energy demand and

reduces air emission. For each 10% of recycled glass used,

melting energy reduces by approximately 2.5%.


Downstream industry driversFMCGIndia's fast moving consumer goods (FMCG) sector is the

fourth-largest sector in India. The country’s FMCG market

expanded by 18% to US$18 billion in 2007-08 and is expected

to reach US$33.4 billion in 2015 (Source: IBEF). The FMCG

growth story is optimistic on account of an increase in rural

demand for branded products (rural India has a large

consuming class with 41% of India's middle-class and 58% of

the country’s total disposable income, according to

Assocham), rise in modern trade and health and wellness

awareness.

LiquorIndians consume 350 million cases of alcohol and 250 million

cases of country liquor a year (Source: All India Distillers’

Association). With an increasing trend towards social drinking,

India has emerged as one of the fastest-growing alcohol

markets (9-10% annually) with the organised sector sales

crossing Rs 6,000 crore in 2007-08 (Source: SSKI). An annual

growth of 30% enabled the Indian wine market to cross a

million cases in 2008. A growing Indian market has attracted

large global players like E&J Gallo, Moet Hennessy, Vuove

Cliquot, Diageo and Pernod Ricard India to enhance their

Indian exposure.

BeerWith a growing acceptance of beer as a non-alcoholic drink,

India’s beer consumption grew 14.5% in 2007-08 and beer

shipments increased from 137 million cases to 158 million

cases (7.8 litres each) in 2007-08. The low per capita

consumption of beer in India (0.8 litres as opposed to 22 litres

in China) leaves substantial scope for increase in demand. The

high price of Indian beer has catalysed the use of robust glass

containers.

Food processing The food processing industry is estimated at US$70 billion. The

sector’s growth nearly doubled to 13.7% in only four years and

is estimated to grow by 20% by 2015 (Source: Ministry of State

for Food Processing Industries). With proposed investments of

US$23.5 billion in the pipeline and only a mere 1.3% of food

processed in India (80% in the developed world according to

India Food Report 2008), there is a huge industry opportunity.

Further, an adoption of stricter government norms and rising

industry standards in quality will boost glass packaging.

Currently, only 6% of the entire country’s food is packed in

glass. An interesting observation on the demand-supply gap is

that small and medium players in industries like confectioneries

and pickles had to shut production because of a shortage of

glass containers in 2007-08.

Carbonated drinksGrowing at 6-8% per annum, the carbonated soft drinks

segment accounts for Rs 6,000 crore of the Rs 9,500-crore

packaged beverages industry (Source: Business Standard).

The per capita consumption of soft drinks in India is a mere 6

bottles, compared with Pakistan's 17, Sri Lanka's 21, Thailand's

73, the Philippines 173 and Mexico's 605. The demand for soft

drinks in India is expected to grow at an annual rate of 10% per

annum between 2006-12, with demand at 805 million cases by

2011-12 (Source: FMCS;IBEF report). The low capita

consumption, coupled with the projected demand, indicates

ample room for additional bottling units.

CosmeticsThe domestic cosmetics and toiletries segments have been

growing at 15-20%, touching US$950 million. With increased

awareness, the industry size is expected to grow to US$1.4

billion in three years (Source: Assocham). This optimism is

derived from the fact that despite a growing penetration of

cosmetic items and entry of new foreign brands, India's per

capita consumption of cosmetic and toiletries is lower than in

other Asian countries: US$0.68 as against US$40 in Hong

Kong, US$10 in Malaysia and Taiwan, US$12 in Japan and

US$1.5 in China.

PharmaceuticalsIndia is among the fastest-growing pharmaceutical markets in

the world. The domestic pharmaceutical market recorded sales

of US$7.3 billion in 2006 with a growth of 17.5% over the

previous year. Average consumer spending doubled over the

past decade and per person spending on prescription drugs is

expected to double from US$761 in 2007 to US$1,537 by 2016.


Around 75% of the Indian population is under 40 and

employable, creating an optimism of sustainable industry

growth.

Operational reviewHNGIL at work

Manufacturing

The Company is the largest manufacturer of container glass in

India with a cumulative capacity of 2,575 TPD across six

manufacturing units.

Installed capacities (MT per day)

FY07 FY08

Rishra 720 720

Rishikesh 365 365

Bahadurgarh 710 710

Neemrana 140

Pondicherry 320 320

Nashik 320 320

Total 2,435 2,575

Manufacturing glass is technically challenging, involving the

balanced use of over 10 raw materials to produce a mix

conducive for a particular container type. Even as the raw

materials are fed in batches, the manufacturing process is

continuous.

From raw material to glassProduction planning process: The raw materials offloaded

from incoming trucks are tested for chemical suitability in the

laboratory. Based on its chemical composition, the raw material

batch is prepared for onwards manufacture either as flint,

amber or green glass. A raw material batch is prepared after

weighing and mixing the raw materials in the right proportion,

according to the type of glass to be manufactured. Raw

material is fed into the furnace and is melted into molten glass

at temperatures ranging from 1600-18000C, which, in turn, is

fed into the individual section(IS) machines to be converted into

bottles (mould management process).

Mould management process: The molten glass is poured into

the IS machines fitted with moulds to provide the desired

shape. The mould is customised and designed according to

the customer specifications received, varying for every bottle.

Thereafter, the hot bottles are moved into the annealing lehr

where the bottles are cooled and heated concurrently, reducing

the chances of stress being developed due to extreme

temperature conditions.

SQC process: The cool bottles are passed through human

sorters who discard those containers which do not match the

specifications mentioned on the sheet. The remaining bottles

form the final product called the ‘pack.’ The discarded bottles

are reused in the production process as raw material (cullet).

There are about 140 possible defects and the sorters are

trained to detect the defective bottles from the resulting pack.

HNGIL has a ‘draw-to-pack’ ratio of 90%, an industry

benchmark in India, and we aim to improve it to the

international best of 93%.

The sorted product is finally packaged for storing and dispatch.

We offer three kinds of packaging depending on customer

needs. One, where the bottles are packed into cardboard

boxes, sealed and dispatched to customers. Second, the

bottles are packed on cardboard trays and then shrink-wrapped

through the heating systems installed at the packaging centre.

Some products like beer bottles are packed in gunny bags as

manufacturers wash the bottles before filling them.

An in-house ceramic printing division allows us to use glass

colours to print labels on the glass containers. Generally used

for reusable bottles like soft drinks, the glass colours ensure

that the colours do not fade after repetitive use, reducing the

subsequent packaging cost of the customer.

Our efficient stacking system on pallets reduces breakage due

to storing to hardly 0.1% of the production.

The high demand for glass containers helps liquidate our

finished goods inventory within 15 days of production. The

warehouses are located in the factory precincts itself, from

where the bottles are dispatched to customers directly.

The national demand for amber glass is fed from our factory at

Rishra and Bahadurgarh. We maintain warehouses in Mumbai

to feed our customers in the western region.


� The manufacturing process has two ends. The hot end

beginning with the raw material batch mix entering the furnace

silos and ending with the annealing process. The cold end

starts at the sorting stage and ends with product dispatch

� Production planning process involves a wide range of

activities from procuring the raw material to converting the

same into molten glass

� Mould management process involves activities ranging from

converting the molten glass into bottles as per customer

specification to cooling the same in annealing chambers

� SQC process comprises activities from sorting the cooled

bottles to dispatching the same to customer bottling units

OutlookThe Company is reinforcing performance through the following

initiatives:

� Redesigning of furnaces nearing obsolescence

� Installation of a ‘clean room’ so that bottles can pass through

the cold end of the manufacturing process without any contact

with the external environment

� Proposed increase in furnace capacity through booster loads

to improve the draw; proposed increase in machine capacity

through enhanced machine speed (cycles per cavity)

� Proposed acquisition of a pelletiser to automate packaging

1952 1999-2000 2000-01 2001-02 2004-05 2006-07 Present

Together constitute ACEcontainers

GR

OW

TH

Acquisition ofassets of Neemrana

plant – capacity2575 TPD

Capacity at2435 TPD

L&T plantacquisition –capacity at2150 TPD

Capacityat 1800 TPDfrom OwensBrockway acquisitionExpanded

capacityto 1100 TPD

Installedcapacity

of 30 TPD


� Superior management techniques resulted in an increase in

performance, productivity and profitability

� A successful rollout of TPM techniques at Bahadurgarh and

Rishra led to a 300 basis points increase in productivity

� Testing 11 lean Six Sigma projects

� Initiated the process of implementing a SAP ERP to

streamline operations and ensure real time data availability

HNGIL at work

Management practices

At HNGIL, we recognise the importance of superior

management tools that enhance performance, productivity and

profitability. The Company implemented a number of such

tools and techniques, strengthening its shop floor

effectiveness.

Total Productivity Maintenance: Based on the eight principles

of productive maintenance. This comprises quality

maintenance, kaizen, autonomous maintenance, etc. and is a

productivity enhancing tool rather than being a cost centre.

Each machine operator is given the responsibility of running

the machine at optimum levels; any increase is incentivised.

TPM was implemented at Bahadurgarh and Rishra, improving

the draw-to-pack efficiency by around 300 basis points.

Lean Six Sigma: Combines the best practices adapted from

the lean management system of Toyota and the Six Sigma

practices of Motorola. This helped reduce non-value added

time (between production completion and revenue generation).

Six Sigma practices helped minimise deviations from

specifications leading to superior product quality and

productivity. The Company adopted 11 projects for enhanced

performance.

ERP rollout: The first phase of the Company’s ERP solution will

be rolled out in Bahadurgarh, Rishra and the head office by

December 2008 across the sales distribution, production

planning, plant maintenance, materials management, quality

maintenance, warehouse management and engineering chain

management (ECM) and data management systems (DMS).

This will facilitate real time information management for timely

decision-making, superior inventory management, elimination

of data mismatch and redundancies and uniform multi-unit

design changes.

HNGIL at work

Quality

At HNGIL, quality is defined as all the product attributes that

enable a bottle to resist breakage during transportation and

filling.

At HNGIL, our quality commitment comprises the ability to

produce according to demanding customer dimensions with

checks across 140 defect parameters and well within tolerance

limits defined by customers.

Raw material vigilance At HNGIL, quality control comprises the following processes

and stages:

� Random sampling for chemical composition of incoming raw

materials and onward mixing as per batch needs

� Regulation of furnace temperature, resulting in appropriate

glass viscosity and distribution

� Analysis of molten glass across characteristics like glass level,

raw material mix, glass viscosity and temperature, influencing raw

material and chemical consumption


Quality managementThe moulded glass is monitored hourly across 15 dimensions

by the production and quality departments, the deviations

reported and the mould redesigned. The bottles are cooled in

the annealing lehrs and thereafter subjected to alternate

cooling and heating spells to minimise bottle stress. Thereafter,

the bottle is passed through a lighting station where sorters

examine bottles; the defective bottles are discarded for use as

glass cullet in the manufacturing process. The quality of shrink-

wrapped packaging minimised in-transit contamination and

breakage. The Company is tightening its process discipline in

line with ISO 22001:2000 certification, which will make it a

preferred vendor for the food processing industry.

� The Company is ISO 9000: 2000-certified

� Quality control is ensured across two stages. One at the raw

material stage handled by glass technologists and the other at

the production stage handled by engineers and the quality

control department

NNPB technology vs. Blow and Blow technology

The Press and Blow Process is an improvement upon the Blow

and Blow process for the following reasons:

- The parison facilitates precision in control

- Enhanced glass distribution throughout the bottle

- Lighter in weight, hence a lower consumption of molten glass

- Lower costs

HNGIL at work

Research and development

At HNGIL, we are engaged in a continuous exercise to

enhance our product and process efficiency, reflected in lower

costs, better product, stronger quality and enhanced

productivity.

Over the years, the Company worked closely with furnace

technology providers with the objective to increase furnace

load (more material can be generated through the same power

consumption) and the use of technically advanced shervo

gobs to minimise deviations.

The Company selectively introduced the narrow neck press

and blow (NNPB) technology in 2007-08 – superior to the

conventional blow and blow process used for narrow neck

bottles, leading to a saving of molten glass per bottle without

compromising product strength. This technology facilitates

superior glass distribution. In turn, this superior distribution

reinforces the bottle’s resistance to pressure on the filling line,

suited for carbonated and beer brands; the concurrent weight

saving implies savings for the Company and customers – a

reduction in logistics cost and increasing consumer

acceptability. The first successful bottle rollout of the new

technology was the dextrose glucose bottle, used in

intravenous applications.

The Company’s R&D efficacy also translated into direct

benefits. The Company leveraged its deep understanding of

the product, technology, aesthetic and end-customer

applications to offer customers suggestions in enhancing line

efficiency, enabling them to accelerate their filling speed,

reduce breakages and strengthen their overall viability.


� The introduction of a lighter, stronger dextrose glucose bottle has enabled us to capture the entire market for that product

� Light-weighting has led to a 35 gms saving of molten glass per bottle in this particular case

� Fuel costs are being optimised by increasing the furnace load.

HNGIL at work

Marketing and distribution

In the business of container glass, products must be made and

marketed to enhance their preference over competing

packaging alternatives as well as competing container glass

competitors. The Company’s edge was conclusively

showcased in its market share in excess of 65% in 2007-08.

During the year under review, the Company has faced the

following challenges: growing competitiveness from alternative

packaging materials and an increase in material costs, making

it imperative to absorb costs, enhancing the price-value

proposition and preventing a shift to alternative materials.

The Company retained its share of a growing market through

the following initiatives:

� Growing adaptation and customisation of the end product with

the objective to reduce costs

� Progressive graduation from mere product delivery to complete

packaging solutions

� Integration of line friendliness, customer friendliness, consumer

friendliness and environment friendliness into the overall value

proposition

� Proactive light-weighting of bottles – a win-win for the Company

and customer – resulting in lower material and logistics cost

� Quicker sale through the complement of the Company’s scale,

versatility, product flexibility and a pan-India presence

� Stable pricing of end products as opposed to a volatile raw

material environment

The highlights of the Company’s achievements in 2007-08

comprised the following:

� An increase in installed capacity at a time when demand

exceeds supply, reinforcing customer relationships

� A growth in market share across most product segments

� A decline in the cycle time required to service customers from

the design to market stage

� An increase in realisations in line with cost push inflation and

global benchmarks

� The launch of light-weight bottles, resulting in lower costs and

better value for customers

� A growing ability to service multi-locational, multinational

customers through our multi-locational units

The Company reinforced its price-value through relatively

stable pricing even as raw material contracts were revised on

four occasions during the year under review. HNGIL reinforced

its position through the prudent graduation from vendor to co-

product developer through technical consultancy services.

We are optimistic of our prospects on account of glass

container demand growing faster than supply. Besides, an

increase in disposable incomes, nuclear families, processed

food purchases and beer consumption will drive bottle offtake,

reinforcing the Company’s prospects.

The Company expects to capitalise on this reality through a

greater proportion of NNPB products, increased sales,

enhanced realisations derived from value-addition, superior

service and a growing proportion of exports.


� Air emissions are the only form of pollution

� Alternative fuel choices like natural gas have made HNGIL

eligible for carbon credits

� The demand for container glass is higher than supply

� HNGIL is acquiring plants at periodic intervals to increase

capacity, instilling confidence in its large portfolio of clients

� India is the lowest cost producer of glass in the world and is

poised to grow globally

� With renowned brands switching to Indian-manufactured

glass containers, the Company has room to enhance volumes

� Despite a slowdown in the consumption of non-essential

items, the Company is confident of its growth as it caters to the

top 10 companies in each of the segments in which it operates

� No person-days were lost due to safety failures

� Management practices for enhancing safety for employees are

being developed

HNGIL at work

Technical consumer services

In the business of container glass manufacture, the marketing

team works closely with the research and development team to

develop technical consumer services. The latter comprises

consultancy to clients on how to improve bottle design with the

objective to enhance the filling-line efficiency, accelerate

payback and translate a one-off transaction into an ongoing

relationship.

HNGIL’s consultancy is offered at two stages: before bottle

production (pre-consultancy stage), comprising design, line

and equipment suggestions; following bottle production (post-

consultancy stage) with a view to enhance efficiency of the

Company’s bottles on the customers’ bottling lines.

The result is that the Company has graduated from a vendor

into a technology partner, enhancing throughput on the

customers’ lines, reinforcing their viability and encouraging

them to enhance production. In one of the high points of

achievement, the Company successfully converted successful

Indian and multi-national brands who hitherto imported their

requirement of bottles into committed customers.

HNGIL at work

Safety

Some of the Company’s operations are hazardous, warranting

the need for safety. In view of this, the Company invested in

safety equipment, processes, practices and people.

The Company deputed a professionally qualified safety, health

and environment officer in each of its manufacturing facilities. It

is adopting practices necessary for the OHSAS (ISO

18001:2000) certification. It periodically reviews processes with

an eye on the probability of accidents, severity, frequency,

production loss, etc. with ratings on each according to their

occurrence and significance. These ratings are then multiplied

and the result is compared with a standard set for each

process. If the resulting figure is higher than the standard, then

that particular area is classified as accident prone; if the figure

is significantly higher, then it is classified as a danger zone.

Thereafter, scientific management techniques are employed to

reduce the ratings below standard levels for enhanced process

safety. The effectiveness of our procedures can be gauged

from the fact that despite increased production in 2007-08, the

Company did not experience any major accident.

HNGIL at work

Environment

The manufacture of container glass does not entail any

hazardous liquid or solid waste. Water used in cooling towers

is reused, as is the glass from rejected bottles as cullet. Being

ISO 9001:2000-certified, the Company monitors and

documents pollution levels, which are subsequently audited by

an external agency.

The Company consumes eco-friendly options like natural gas

and its carbon dioxide emissions have progressively declined.

It has embarked on the process to obtain the ISO 14001:2000

certification.


Internal control systems and their adequacy

The Company has an adequate internal control system, which

commensurates with the Company’s size and the nature of its

business. It has well established and documented operational

procedures, ensuring that transactions are recorded,

authorised and reported correctly apart from safeguarding its

assets against wastage, unauthorised use and removal. This is

regularly reviewed and updated.

Physical verification of fixed assets is done periodically. The

Company appointed independent and qualified external

agencies that submit detailed reports on internal control

system and their adequacy to the Audit Committee of the

Board of Directors, periodically.

� Number of saleable bottles increased as a result of enhanced manpower productivity

� Downtime declined

HNGIL at work

People management

Glass manufacture is more knowledge-intensive than most

businesses for some good reasons: the process of

manufacture is complex, the customer’s quality requirements

are becoming increasingly stringent, the cost of error is high

and the amount of individuals required to man each machine is

higher than in other industries.

At HNGIL, our primary asset is our intellectual capital,

represented in the collective knowledge and experience of our

people. The Company is the largest employer in its industry

space in India, with over 3,000 employees as on

March 31, 2008.

The Company recruits individuals from the best glass

technology colleges as well as mechanical, production and

chemical engineers from reputed institutes. Their academic

understanding is reinforced through classroom training, which

is subsequently appraised though periodic written tests.

This enhanced training is catalysed by a cross-factory sharing

of the best practices and measured in the Company’s

production efficiency, linked to monthly incentives.

The effectiveness of the Company’s labour relation practices is

reflected in its record of years of working uninterrupted by any

labour unrest.

Increasing manpower training hours

Year 2007-08 2006-07 2005-06

Training hours/years (hrs) 31883. 5157 11189

Rising manpower productivity

Years 2007-08 2006-07 2005-06

Productivity (MT/person) 192 126 122

Declining labour cost

Year 2007-08 2006-07 2005-06

Labour cost/tonne (Rs) 790.00 1,931.00 1,119.00

Executive grade people skill

Qualifications %

MBA 03.70

CA/CS/ICWA 03.58

ME/MBBS/MSW 01.60

Post graduate 11.13

Technical diploma 28.90

Graduate 31.30

ITI 07.00

Inter/SSE 09.80

Below SSE 03.00


Reviewing our key numbers

Income accounting method The financial statements of the Company were prepared in line

with the generally accepted Accounting Principles and the

Accounting Standards as per Section 211(3C) of the

Companies Act, 1956. The financial statements of the

Company were prepared under historical cost convention basis

and disclosures made in accordance with the requirement of

Schedule VI of the Companies Act, 1956 and the Indian

Accounting Standards. The Company followed the mercantile

system of accounting and recognised income and expenditure

on accrual basis. The Company made all relevant provisions as

were applicable as on March 31, 2008. The absence of any

material qualifications in the Company’s Auditors’ Report

indicates that the Company’s financials present a true and fair

view of the Company during the year under review.

2007-08 vs 2006-07 The Company’s performance is captured in the following

numbers:

� Gross revenue increased by 92.87% from Rs 59,539.68 lacs

in 2006-07 to Rs 1,14,833.90 lacs in 2007-08

� EBIDTA increased by 107.92% from Rs 10,324.87 lacs in

2006-07 to Rs 21,467.11 lacs in 2007-08

� PAT increased by 368.22% from Rs 3,424.46 lacs in 2006-07

to Rs 16,033.89 lacs in 2007-08

� Cash profit (PAT + depreciation +/- deferred tax liability)

increased by 194.24% from Rs 6927.39 lacs in 2006-07 to

Rs 208383.16 lacs in 2007-08

� EPS (basic) increased from Rs 31.01 in 2006-07 to Rs 91.79

in 2007-08

The Company’s margins strengthened across the Board on

account of superior economies of scale, widening national

presence and relevant cost-cutting:

� EBIDTA margin increased 135 basis points from 17.34% in

2006-07 to 18.69% in 2007-08.

� Net profit margin increased 821 basis points from 5.75% in

2006-07 to 13.96% in 2007-08.

� Return on capital employed increased from 12.07% in 2006-

07 to 15.63% in 2007-08

Mitigating risks at HNGIL

Industry risk A slowdown in the

downstream industries

could affect demand.

� Demand has been buoyant from the processed foods, beverages,

beer, liquor, pharmaceutical and organised retail sectors

� The Company caters to the top 10 companies present in these

segments, growing faster than the industry average

� Demand is higher than the existing supply

Competition risk The Company’s success

might attract competition.

� The container glass industry is capex and working capital-intensive

� The Company has the largest installed capacity in India

� The Company enjoys longstanding customer relationships with

multinationals

� The Company pioneered the introduction of light-weighting

technology in India

Risk mitigationRisk explanationRisk identification


Risk mitigationRisk explanationRisk identification

Raw material risk An inability to procure

adequate raw materials at

the right price may affect

the Company’s

competitiveness.

� A subsidiary company owns silica sand reserves

� The Company is already in the process of acquiring limestone and

dolomite mines on lease

� The Company enjoys extended raw material supply contracts (three

months) on account of its large volume

Environment risk Tight environment

regulatory policy could

affect operations.

� The Company’s operations were periodically certified by the Pollution

Control Board

� The waste water was re-used in the cooling towers

Quality risk An inferior quality of end

product can dent the

Company’s brand equity.

� The Company follows stringent quality control, comprising a

thorough inspection of raw materials, in-process materials and finished

products reinforced by hourly checks

� The Company possesses the ISO 9000:2000 quality certification

Talent risk The development of a

company could be stunted

without the necessary skill

sets.

� The Company continues to attract the best in the industry with

attractive growth opportunities presented for personal development of

individuals

� At HNGIL, we incentivise performance to retain the best talent

� The Company provides in-house training to enable employees to

develop skill sets specific to the glass industry, ensuring loyalty and

competence

� As a result, HNGIL enjoys one of the lowest attrition rates in the

industry

Technology

obsolescence risk

The advent of new

technologies could make

the existing processes

obsolete, threatening the

Company’s growth.

� The Company is a front-runner in technological advancements with a

consistent first mover’s advantage

� The Company pioneered the light-weighting technology and the

NNPB (Narrow Neck Process Blow) technology on a large scale

� Its insight into plant fabrication has facilitated low-cost

de-bottlenecking and asset turnaround

� Its technical skills reflected in relevant productisation for the liquor,

beverages and food processing sectors


Corporate Governance

A. Mandatory requirements1. Company’s philosophy on Code of GovernanceCorporate Governance is a system and process that directs

corporate resources and management strategies towards

maximising stakeholders’ value, while ensuring accountability,

integrity and openness in the conducting of business within the

acceptable legal and ethical framework. A good governance

process thus provides sufficient transparency over corporate

policies, strategies and the decision-making process, while

strengthening internal control systems and building relationship

with stakeholders, including employees and shareholders.

The Company’s philosophy is to adopt such policies and

practices, which are best in the interest of all the persons who

are touched by it. Your Company acknowledges and respects its

fiduciary relationship and responsibility towards its stakeholders

and strives hard

� To protect their interests

� To enhance their trust and confidence

� To meet their expectations

� To improve public understanding of activities and policies of

the organisation; and

� To achieve balance between stakeholders’ interests and

corporate goals by adopting such systems and procedures that

are recognised as the best corporate practices through which

good corporate governance principles are articulated and

implemented to meet all the relevant and critical legal and

regulatory requirements

The Company has formed an active, well-informed Board with

the majority comprising Independent Directors to uphold the

Company’s commitment to follow high standards of ethical

values and business integrity. During the year 2007-08, the

Company has kept its commitment towards the required norms

and disclosures on Corporate Governance under the Listing

Agreement executed with the stock exchanges, on which the

shares of the Company are listed.

2. Board of Directors Present composition and size of the Board

The composition of the Board of Directors as on March 31, 2008

is given below. Out of the total 10 Directors on the Board:

� 2 are Executive Directors

� 1 is a Non-Executive Director

� 7 are Non-Executive Independent Directors

The Chairman of the Company is a Non-Executive, Non-

Independent Director. The number of Independent Directors

exceeds one-half of the total number of Directors.

� Attendance of Directors at the previous Annual General

Meeting (AGM).

The last Annual General Meeting was held on September 14,

2007 at the registered office of the Company, 2 Red Cross Place,

Kolkata 700 001 and the same was attended by all the Directors

except Mr Kishore Bhimani, Mr Supriya Gupta, Mr S.K. Bangur

and Dr I. K. Saha.

Pursuant to Clause 49 of the Listing Agreement executed with the stock exchanges on which the shares of the

Company are listed, the Report on Corporate Governance of your Company as part of the Directors’ Report, is

furnished below.

Report on


Attendance of Directors at the Board meeting and number of other directorships and other Board committee memberships, etc. during

the year under review.

Name of the Category of No of Board Directorship in #No. of committees

Director directorship meeting(s) other companies (Other than that of the Company)

attended incorporated in which he is

in India^ Chairman Member Total

Mr C. K. Somany (Chairman) 5 13 - 1 1

Non-Executive

Mr Sanjay Somany (Managing Director) 4 14 – – –

Executive

Mr Mukul Somany (Jt. Managing Director) 6 16 – – –

Executive

Mr Kishore Bhimani Independent 4 1 – 2 2

Mr S. Bhattacharya Independent 6 2 – 1 1

Mr R. K. Daga Independent 6 10 3 – 3

Mr Dipankar Chatterji Independent 5 12 – 5 5

Mr S.K. Bangur Independent 1 13 1 – 1

Mr Supriya Gupta Independent 4 11 5* 6* 11*

Dr I.K. Saha Independent 6 1 – – –

* includes membership of the committee of Board of Directors of a foreign company.

êxcludes directorship of Companies u/S 25 of the Companies Act, 1956.

# all the Committees of which the above Directors are Member/Chairman have been considered.

� Board meetings held during the year

During the financial year ended on March 31, 2008, six Board meetings were held within the maximum specified duration of 120

days between two Board meetings. The details of the meetings are as follows:-

Sl. no. Date of meeting For the quarter Duration between last Board Meeting

01. April 25, 2007 April, 2007 – June, 2007 43 days

02. July 14, 2007 July, 2007 – September, 2007 79 days

03. July 15, 2007 July, 2007 – September, 2007 –

04. August 11, 2007 July, 2007 – September, 2007 26 days

05. October 26, 2007 October, 2007 – December, 2007 75 days

06. January 22, 2008 January, 2008 – March, 2008 87 days


Board procedure

The Board meetings are normally convened on the directions

received from the Chairman/Managing Director of the Company.

A detailed agenda is circulated to the members of the Board, at

least three days prior to the date of the meeting. Agenda items

are circulated along with relevant information to enable the Board

members to take appropriate decisions. The minutes of the

Committee are regularly placed before the Board.

3. Audit Committee � Terms of reference

The Company constituted an Audit Committee in the year 2000.

The terms of reference of the Audit Committee are as follows:-

1. Oversight of the Company’s financial reporting process and

the disclosure of its financial information to ensure that the

financial statement is correct, sufficient and credible.

2. Recommending to the Board, the appointment, re-

appointment and, if required, the replacement or removal of

the statutory auditor and the fixation of audit fees.

3. Approval of payment to statutory auditors for any other

services rendered by them.

4. Reviewing, with the management, the annual financial

statements before submission to the Board for approval, with

particular reference to:

a. Matters required to be included in the Director’s

Responsibility Statement to be included in the Board’s

report in terms of Clause (2AA) of Section 217 of the

Companies Act, 1956.

b. Changes, if any, in accounting policies and practices and

reasons for the same.

c. Major accounting entries involving estimates based on the

exercise of judgment by the management.

d. Significant adjustments made in the financial statements

arising out of audit findings.

e. Compliance with listing and other legal requirements

relating to financial statements.

f. Disclosure of any related party transactions.

g. Qualifications in the Draft Audit Report.

5. Reviewing, with the management, the quarterly financial

statements before submission to the Board for approval.

6. Reviewing, with the management, performance of statutory

and internal auditors and adequacy of the internal control

systems.

7. Reviewing the adequacy of internal audit function, if any,

including the structure of the internal audit department,

staffing and seniority of the official heading the department,

reporting structure coverage and frequency of internal audit.

8. Reviewing with internal auditors any significant findings and

follow-up there on.

9. Reviewing the findings of any internal investigations by the

internal auditors into matters where there is a suspected

fraud or irregularity or a failure of internal control systems of

a material nature and reporting the matter to the Board.

10. Discussion with statutory auditors, about the nature and

scope of audit as well as post-audit discussion to ascertain

any area of concern.

11. To look into the reasons for substantial defaults in the

payment to the depositors, debenture-holders, shareholders

(in case of non-payment of declared dividends) and

creditors.

12. Carrying out any other function as mentioned in the terms of

reference of the Audit Committee.

� Composition, meetings and attendance during the year

During the financial year ended March 31, 2008, eight meetings of the Audit Committee were held and the attendance of each

member of the Committee is given below:

Dates of meetings

April 24, 2007 July 14, 2007 August 11, 2007 September 5, 2007

October 26, 2007 November 26, 2007 January 22, 2008 March 24, 2008


Remuneration policy of the Company

The remuneration of the Executive Directors are recommended

by the Remuneration Committee, based on criteria such as

industry benchmarks, the Company’s performance vis-à-vis the

industry, responsibilities shouldered, performance/track record,

macro-economic review, remuneration packages of heads of

other organisations and approved by the Board of Directors. The

Company pays remuneration by way of salary, perquisites and

allowances, incentive remuneration and /or commission to its

Executive Directors.

The remuneration by way of commission to the Non-executive

Directors is decided by the Board of Directors and distributed on

an equal basis. The members had, at the Annual General

Meeting held on September 14, 2007, approved the payment of

remuneration by way of commission to the Non-Executive

Directors of the Company of a sum not exceeding 1% per annum

of the net profits of the Company calculated in accordance with

the provisions of Section 198 of the Companies Act, 1956 for a

period of five years, commencing from April 1, 2007 and the

same is subject to a limit of Rs 1,00,000 per Director. The

commission for the financial year 2007-08 will be distributed

among the said Directors accordingly.

� Details of the remuneration paid to the Directors during the year

2007-08

� To Non-Executive Directors

In addition to the commission as aforesaid, the Independent and

Non-Executive Directors are entitled to a sitting fee of Rs 5,000 for

attending each meeting of the Board and the Audit Committee.

The members of Remuneration Committee are paid a sitting fee

of Rs 2,500 for attending each committee meeting. Further, no

remuneration is paid for attending the meeting of the Share

Transfer & Shareholders’ Grievance Committee and Treasury

Management Committee.

The Company obtained shareholders’ approval for the payment

of commission to Non Executive Directors, on September 14,

2007, for a period of five years. The amount of commission will be

apportioned and paid among the Non-Executive Directors on the

basis of duration of membership on the Board.

Members of the Audit Committee have the requisite financial and management expertise. The Chairman of the Audit Committee

attended the 61st Annual General Meeting of the Company.

Total Strength : Three

Designation Members Category No. of No. of meetings

meetings held attended

Chairman Mr R. K. Daga Non-Executive, Independent Director 8 8

Member Mr Sujit Bhattacharya Non-Executive, Independent Director 8 8

Member Mr Dipankar Chatterji Non-Executive, Independent Director 8 7

4. Remuneration Committee � Composition, meetings and attendance during the year

Total strength : Three

Designation Members Category

Chairman Mr R.K. Daga Non-Executive, Independent Director

Member Mr Kishore Bhimani Non-Executive, Independent Director

Member Mr Dipankar Chatterji Non-Executive, Independent Director

During the financial year 2007-08, one meeting of the Remuneration Committee was held on April 25, 2007 to approve the increase

in remuneration of the Managing Director and Joint Managing Director.


The details of sitting fees paid and commission payable for the year 2007-08 are as follows: (In Rupees)

Directors Business relationship with HNGIL Sitting fees Commission Total

Mr C.K. Somany* Promoter 25,000/- 100,000/- 125,000/-

Mr Kishore Bhimani None 20,000/- 100,000/- 120,000/-

Mr S. Bhattacharya None 70,000/- 100,000/- 170,000/-

Mr R.K. Daga None 70,000/- 100,000/- 170,000/-

Mr Dipankar Chatterji None 60,000/- 100,000/- 160,000/-

Mr S.K. Bangur None 5,000/- 100,000/- 105,000/-

Mr Supriya Gupta None 20,000/- 100,000/- 120,000/-

Dr I.K. Saha None 30,000/- 100,000/- 130,000/-

* Mr C.K. Somany is father of Mr Sanjay Somany, Managing Director and Mr Mukul Somany, Joint Managing Director. Other Directors are not

related to one another.

� To Executive Directors

Mr Sanjay Somany was re-appointed as the Managing Director and Mr Mukul Somany was re-appointed as the Joint Managing Director

of the Company, with effect from October 1, 2005 up to September 30, 2010 (i.e. for a period of five years). The remuneration paid to

them during the year 2007-08, as agreed between the Executive Directors and the Company, which is within the ceiling fixed by the

shareholders, is as follows :

(In Rupees)

Break-up of remuneration Executive Directors

Business relationship with HNGIL Managing Director, Promoters’ family Jt. Managing Director, Promoter’s family

Salary 55,20,000 55,20,000

Provident fund 6,62,400 6,62,400

Perquisites 2,93,918 –

Commission 55,20,000 55,20,000

Total 1,13,33,918 1,10,40,000

**Mr Sanjay Somany, Managing Director and Mr Mukul Somany, Joint Managing Director,who are brothers are related to Mr C.K. Somany,

Chairman of the Company

Notes:

a. The agreement with each of the Executive Directors is for a period of five years (i.e. w.e.f. October 1, 2005 up to September 30,

2010) or the normal retirement date, whichever is earlier. Either party to the agreement is entitled to terminate it by giving not less

than three months' notice in writing to the other party.

b. Fixed commission at 1% of the net profits of the Company computed pursuant to Section 198 of the Companies Act, 1956, is paid

subject to a ceiling of his annual salary.

c. Currently, the Company does not have a scheme for grant of stock options either to the Executive Directors or employees.


5. Share Transfer and Shareholders’ Grievance Committee � Composition, meetings and attendance during the year

Total strength : Four

Designation Members Category No. of meetings held No. of meetings attended

Chairman Mr Kishore Bhimani Non-Executive 11 11

Independent Director

Member Mr R.K. Daga Non-Executive 11 9

Independent Director

Member Mr Sanjay Somany Executive Director 11 3

Member Mr Mukul Somany Executive Director 11 8

The dates on which the meetings of the Share Transfer and Shareholders' Grievance Committee were held during the year:

Dates of meetings

April 24, 2007 May 3, 2007 June 26, 2007 July 14, 2007

August 14, 2007 September 24, 2007 October 26, 2007 December 27, 2007

January 15, 2008 February 8, 2008 February 21, 2008 –

� Shareholders’ complaints and pending share transfer

There were no investor complaints pending at the beginning of the year. During the year ended March 31, 2008, the Company has

not received any complaint.

6. a) General Body MeetingsThe details of day, date, venue and time of General Meetings held during the last three years are as follows:

General Meeting Venue Day and date Time

61st Annual General Meeting Registered Office: Friday, September 14, 2007 11.30 AM

60th Annual General Meeting 2, Red Cross Place, Monday, September 26, 2006 11.30 AM

59th Annual General Meeting Kolkata- 700 001 Monday, September 26, 2005 11.00 AM

Details regarding Special Resolutions passed during the previous three years are given below:

Shareholders’ meeting Special business requiring Special Resolution

61st Annual General meeting 1. Resolution requiring approval for payment of commission to the Non- Executive Directors

2. Resolution requiring approval u/S. 314 of the Companies Act, 1956 for Shri Bharat Somany,

to hold an office or place of profit in the Company

60th Annual General meeting None

59th Annual General meeting Resolution requiring approval u/S 314 of the Companies Act, 1956 for Shri C K Somany to hold

an office or place of profit under the subsidiary company M/s Glass Equipment (India) Ltd.

However, no resolution requiring a postal ballot u/S 192A of the Companies Act, 1956 was recommended for approval during the last

year. No resolution requiring postal ballot is being proposed at the ensuing Annual General Meeting. The Company will seek

shareholders’ approval through postal ballot in respect of resolutions relating to such business as prescribed in the Companies

(passing resolutions by postal ballots) Rules, 2001, as and when the occasion arises.


b) Notes on Directors seeking appointment/re-appointment as required under Clause 49 IV (G) ofthe Listing Agreement entered into with the stockexchanges.

� Brief resume of Mr Dipankar Chatterji

Mr Dipankar Chatterji, a noted chartered accountant, is a senior

partner of the firm L.B. Jha & Co. Chartered Accountants. Mr

Chatterji has been the Chairman, Eastern Region of

Confederation of Indian Industry (CII) and is at present a member

of the National Council of CII.

He was member of the Central Council of the Institute of

Chartered Accountants of India and the Chairman of the Audit

Practices Committee of the Institute. Mr Chatterji was also

appointed as member of the Padmanabhan Committee set up to

review the Reserve Bank of India’s supervision over banks and a

committee set up to advice on NABARD’s supervisory role over

RRBs and co-operative banks and various other committees and

task forces. Mr Chatterji has also been the past President of the

eastern region of the Indo American Chamber of Commerce.

He is also on the Board of following body corporates 1) West

Bengal Industrial Development Corporation Ltd. 2) West Bengal

Industrial Infrastructure Development Corporation 3) Span Motels

Pvt. Ltd. 4) United Credit Ltd. 5) United Credit Belani Properties

Ltd. 6) Patton International Ltd. 7) Nicco Internet Ventures Ltd. 8)

International Infrastructure Services FZ-LLC, 9) Indian Copper

Development Centre 10) Pantheon Data Services Pvt. Ltd. 11)

Delphi Management Services Pvt. Ltd. 12) The Calcutta Stock

Exchange. He is the Chairman of the Audit Committee of United

Credit Limited and Patton International Ltd., member of the Audit

Committee, Investment & Borrowing Committee, Executive

Committee and Restructuring & Settlement Committee of West

Bengal Industrial Development Corporation Ltd., and also the

member of the Remuneration Committee of Nicco Internet

Ventures Ltd.

Mr Chatterji does not hold any shares of the Company.

� Brief resume of Mr R K Daga

Mr R.K. Daga is a post graduate in business management from the

UK. He has considerable knowledge in engineering and finance.

He has been the former Chairman of the Indian Institute of Materials

Management, Kolkata. He is also the past President of the Calcutta

Junior Chamber, adjudged the best unit in India, during his tenure.

He also led a three-member team to Sri Lanka to conduct

leadership development courses. He is also a past President of

Federation of Small & Medium Industries (FOSMI), leading a fifteen-

member business delegation of FOSMI to Singapore, Malaysia and

Hong Kong. Currently, he is the Hony. Secretary of Satyanand Yoga

Kendra, Kolkata branch of the Bihar School of Yoga.

He is on the Board of 1) Somany Ceramics Ltd., 2) S.R. Continental

Ltd., and several private limited companies. He is the Chairman of

the Audit Committee, Remuneration Committee and Shareholders’

& Investors’ Grievance Committee of Somany Ceramics Ltd.

Mr Daga does not hold any shares of the Company.

� Brief resume of Mr C K Somany

Mr C K Somany is an acknowledged expert in glass technology

and is providing policy guidelines for the management and

administration of the Company. He holds a F.B.I.M (London)

degree and a degree in glass plant instrumentation from

Honeywell Brown, Minneapolis, U.S.A. Mr C. K. Somany has

served as the President of the All India Glass Manufacturers’

Association, Bengal Glass Manufacturers’ Association and

several other commercial and non-commercial organisations. He

has served as the Chairman of the Development Panel for the

glass industry formed by the Government of India, Ministry of

Industry during the period 1995-97. He is also associated with

various charitable and philanthropic organisations, carrying on

the tradition of his illustrious ancestors. He was inducted in the

Board in 1970 and subsequently took over as the Executive

Director of the Company and thereafter as the Managing Director,

a post held by him up to September, 2000. Currently, he is a Non-

Executive Chairman of the Company.

He is on the Board of 1) The West Coast Paper Mills Ltd. 2) Glass

Equipment (India) Ltd. 3) HNG Float Glass Ltd 4) Somany Foam

Limited 5) Microwave Merchants Pvt. Ltd. 6) Niket Advisory &

Trading Co. Ltd. 7) Noble Enclave & Towers Pvt. Ltd. 8) Spotlight

Vanijya Ltd. 9) Topaz Commerce Ltd. 10) Amazon Sales Pvt. Ltd.

11) Dhananjay Tradelink Pvt. Ltd. 12) Keshav Engineering Co.

Pvt. Ltd. 13) Aurobindo Housing Co-operative Society Ltd. He is

also the member of the Audit Committee of The West Coast

Paper Mill Ltd.

Mr C. K. Somany holds 5,35,474 shares of the Company (in his

personal capacity).

Disclosures

� There are no materially significant related party transactions


made by the Company with its promoters, directors or the

management, its subsidiaries or relatives, etc. that may have

potential conflict with the interests of the Company at large. The

register of contracts containing the transactions in which the

Directors are interested is placed before the Board regularly for

its approval.

� Transactions with related parties are disclosed in Note No. 28

of Schedule ‘S’ to the accounts in the annual report.

� During the last three years, there were no strictures or penalties

imposed on the Company by either the Securities and Exchange

Board of India (SEBI) or the stock exchanges, or any other

statutory authority for non-compliance of any matter relating to

the capital market.

� Though there is no formal whistle blower policy, the Company

takes cognisance of the complaints made and suggestions given

by the employees and others. Even anonymous complaints are

looked into and whenever necessary, suitable corrective steps

are taken. No employee of the Company was denied access to

the Audit Committee of the Board of Directors of the Company.

� The Company conducts periodic reviews and reporting to the

Board of Directors regarding risk assessment by senior

executives with a view to minimise risk.

� None of the Non-Executive Directors hold any share in the

Company except Mr C K Somany (holding 5,35,474 shares in his

personal capacity).

7. Means of communication � The quarterly, half-yearly and annual financial results are

published in the proforma prescribed under the Listing

Agreement in one English Newspaper having wide circulation

and another in vernacular language (Bengali). However, only the

annual results are sent to the shareholders of the Company.

� The Company’s annual results along with various other

information are displayed on the Company’s web-site

www.hngindia.com.

� Pursuant to the requirement of Clause 51 of the Listing

Agreement, the quarterly financial results, shareholding pattern,

etc. are provided on the specified web-site of SEBI i.e.

http://sebiedifar.nic.in.

� The management discussion and analysis report form a part of

this annual report.

8. General shareholder information� Incorporation

The Company was incorporated in Calcutta in the Province of

Bengal on February 23, 1946 (now West Bengal).

� Corporate Identification Number (CIN):

L26109WB1946PLC013294

� AGM: Date, time and venue

September 8, 2008, Monday at 10 am at the Rotary Sadan,

94/2, Chowringhee Road, Kolkata 700 020.

� Financial calendar April to March

� 1st quarter results by 3rd/4th week of July

� 2nd quarter results by 3rd/4th Week of October

� 3rd quarter results by 3rd/4th Week of January

� 4th quarter results by 3rd/4th Week of June of next year

� Date of book closure

September 01, 2008, Monday, to September 08 , 2008, Monday

(both days inclusive)

� Listing on stock exchanges

Your Company’s shares are listed on the following stock

exchanges:

1] The Calcutta Stock Exchange

7, Lyons Range, Kolkata-700 001

Email: [email protected]

Website: www.cse-india.com

2] Bombay Stock Exchange, Mumbai

25, Phiroze Jeejeebhoy Towers,

Dalal Street, Mumbai 400 001

Email : [email protected]

Website: www.bseindia.com

� Listing fees

Paid for the year 2007-08 for both the above stock exchanges.

� Stock code – Physical

i. 18003 on The Calcutta Stock Exchange, Kolkata

ii. 515145 on Bombay Stock Exchange, Mumbai

� High / Low share price data

According to the data provided by The Calcutta Stock Exchange,

Kolkata, there has been no transaction in the Company’s equity

shares during the year under review at the said Stock Exchange.


Month High Low Volume(Rs) (Rs) (Shares)

April, 2007 541.45 538.60 25848

May, 2007 541.50 437.00 2306

June, 2007 647.00 435.00 5778

July, 2007 593.75 538.75 9069

August, 2007 656.50 536.00 36660

September, 2007 665.00 546.10 61968

October, 2007 1,195.60 464.00 237114

November, 2007 1,420.00 901.00 253568

December, 2007 1,275.15 958.80 99563

January, 2008 1,801.30 970.05 453473

February, 2008 1,224.50 893.50 66034

March, 2008 967.95 600.25 85122

The details of transactions in the Company’s equity shares at the Bombay Stock Exchange Limited, Mumbai during the year and the

respective high / low price data are as given below:

� Registrar and share transfer agent

In compliance with the SEBI directive, the Company has appointed

M/s. Maheshwari Datamatics (Pvt.) Ltd., as its Registrar and Share

Transfer Agent for all works relating to shares both in physical as

well in dematerialised mode. However, documents relating to

shares are also received at the Company’s registered office at

2, Red Cross Place, Kolkata 700 001, Tel. No: (033) 2254 3100,

Fax No: (033) 2254 3130, e-mail address: [email protected]

� Share transfer system

The transfer of shares in physical form is processed and

completed by M/s Maheshwari Datamatics Pvt. Ltd. within a

period of fifteen days from the date of receipt thereof, provided

all the documents are in order. In case of shares in electronic

form, the transfers are processed by the NSDL/CDSL through

respective depository participants.

� Dividend

Dividend at 40% i.e. Rs 4 per share has been recommended by

the Board of Directors, at their meeting held on June 25, 2008,

which is subject to the approval of the shareholders and is

expected to be paid by 3rd week of September, 2008.

� Distribution of Share Holding and Share Holding Pattern as on March 31, 2008

No. of equity shares held Folios % Shares %

1 to 500 6639 98.47 221542 2.00

501 to 1000 43 0.64 34452 0.31

1001 to 5000 26 0.39 52429 0.47

5001 to 10000 5 0.07 38846 0.35

10001 and above 29 0.43 10696099 96.86

Grand total 6742 100.00 11043368 100.00

No. of shareholders in: Physical mode 50 6997406 63.36

Electronic mode NSDL 3942 3865280 35.00

CDSL 2750 180682 1.64

Total 6742 100.00 11043368 100.00

Source: www.bseindia.com

Monthly High & Low at Bombay Stock Exchange(HNG vs. Sensex)

260021000

19500

18000

16500

15000

13500

12000

10500

9000

7500

6000

4500

3000

1500

BS

E-S

EN

SE

X

PR

ICE

PE

R S

HA

RE

IN R

UP

EE

S

2350

2100

1850

1600

1350

1100

850

600

350

Apr-0

7M

ay-0

7Ju

n-07

Jul-0

7Au

g-07

Sep-

07O

ct-0

7N

ov-0

7D

ec-0

7Ja

n-08

Feb-

08M

ar-0

8

High Low Sensex-High Sensex-Low Period

541647

594657 665

1196

1420

1275

1801 14677

1645815332

18886

18183

17145

15323

1378014639

139471355412426

14384 14576 14683

15869 15542

17361

2023820204 20498

21207

18895

17228

1225

968

600

894970959901

464546536539435437

539


� Shareholding pattern as on March 31, 2008

Category No. of shares %

Promoters and associates 10040043 90.91

Institutions 332374 3.01

Domestic companies 419944 3.80

Resident individuals 249031 2.26

Foreign residents and NRIs 1976 0.02

Total 11043368 100.00

� Dematerialisation of shares and liquidity

As on March 31, 2008, 4045962 shares comprising 36.64% of the

paid-up capital of the Company are in dematerialised mode, as

compared to 2137748 shares as on March 31, 2007. C. K. Somany

Group i.e. the promoter of the Company, holds around 90.91% of

the paid-up capital of the Company, out of which 3047401 shares

being 27.59% of paid-up capital are held in dematerialised mode

as on March 31, 2008, as compared to 1139547 shares being

10.32% of paid-up capital as on March 31, 2007 and the balance

in the physical form at the end of the year March 31, 2008.

Pursuant to the Scheme of Amalgamation, 6424345 equity shares

of the Company has been issued to the shareholders of erstwhile

Ace Glass Containers Limited subsequent to the Balance Sheet

date. The share capital of the Company now stands to Rs 1746.77

lac as against Rs 1104.35 lac as on March 31, 2008.

� Demat ISIN Number for NSDL and CDSL

INE 952A01014

� Outstanding GDRSs/ADRs/Warrants or any convertible

instruments, conversion date and the likely impact on equity.

None

� Plant locations

The Company has six plants, located at:

1. 2, Panchu Gopal Bhaduri Sarani, Rishra-712 248,

Dist. Hooghly, West Bengal

Phone: (033) 2600 0200, Fax (033) 2600 0333

2. Bahadurgarh–124507, Dist: Jhajjar, Haryana.

Phone: (01276) 221400, Fax (01276) 221666

3. 14, RIICO Industrial Area, Neemrana, Distt. Alwar

Pin - 301705 (Rajasthan), Tel - 01494 - 246712, 513935

Fax - 01494 - 246713

4. P.O. Virbhadra, Rishikesh - 249201,

Dist. Dehradun, Uttarakhand

Phone: (0135) 2470700, Fax (0135) 2470777

5. Thondamanatham Village, Vezhudavoor S.O.

Pondicherry –605 502, Phone: (0413) 2677319,

Fax (0413) 2677366/2677666

6. Nashik Glass Work, F1, MIDC Malegaon,

Dist. Sinnar, Nashik - 422113

Phone: (025511) 228900, Fax (025511) 228999

� Address for correspondence

Company Secretary

Hindusthan National Glass & Industries Limited

2 Red Cross Place, Kolkata 700 001.

Telephone No. (033) 2254 3100, Fax No. 033 2254 3130

Email [email protected]

� E-mail ID for investors’ grievance

[email protected]

B. Non-mandatory requirements

� Chairman of the Board

At present, the Chairman of the Company Mr C. K. Somany, does

not have a separate office in the Company. The corporate office

supports the Chairman in discharging his responsibilities.

� Treasury Management Committee

The Board of Directors at its meeting held on May 9, 2005, have

constituted a Committee of its member known as the Treasury

Management Committee to approve and authorise transactions

involving the day-to-day management of the funds with more

efficiency. The Committee comprising Mr Sanjay Somany, Mr

Mukul Somany, Mr R.K. Daga and Mr Dipankar Chatterji are its

members. During the year 2007-08, 64 meetings of the Treasury

Management Committee were held.

� Remuneration Committee

The details of the Committee has already been stated at point no

4 of this report

� Information to shareholders

Half-yearly results including summary of the significant events are

currently not being sent to the shareholders of the Company.

However, quarterly results are posted at the Company’s website,

in addition to being published two newspapers, one in English and

another in vernacular language.


Declaration

� Postal ballot

No resolution is proposed to be passed by postal ballot.

� Code of conduct for prevention of insider trading

Pursuant to the requirements of SEBI (Prohibition of Insider

Trading) Regulations, 1992, as amended, the Company has

adopted a ‘Code of Conduct for Insider Trading’ at the meeting of

the Board of Directors held on June 10, 2002. The Company, its

Directors and designated employees, have complied with the

provisions of the said Code of Insider Trading.

� Code of Conduct for Directors and the senior management

Pursuant to the requirements of Clause 49 of the Listing Agreement

as amended, the Company has adopted a ‘Code of Conduct for

Directors and the senior management’ at the meeting of the Board

of Directors held on October 31, 2005. The said code is also

placed on the website of the Company viz. www.hngindia.com.

The Directors and designated employees of the Company have

complied with the provisions of the said Code of Conduct.


Kolkata C.K. Somany


All the Board Members and the senior management personnel have affirmed their compliance with the ‘Code of Conduct for Members

of the Board and senior management’ for the year 2007-08 in terms of Clause 49(I)(D)(ii) of the Listing Agreement executed with the Stock

Exchanges.

Mukul Somany Sanjay Somany

Dated: June 25, 2008 Joint Managing Director Managing Director

CertificateThe members of Hindusthan National Glass & Industries Limited.

We have examined the Compliance of the conditions of Corporate Governance by Hindusthan National Glass & Industries Ltd. for the

year ended 31st March, 2008 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India.

The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was carried out in

accordance with the guidance note on certification of Corporate Governance (as stipulated in Clause 49 of the Listing Agreement) issued

by the Institute of Chartered Accountants of India and limited to the procedures and implementation thereof, adopted by the Company

for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of the opinion on the

financial statements of the Company.

In our opinion and to the best of information and explanations given to us and the representations made by the Directors and the

management, we certify that the Company has complied in all material aspects with the conditions of Corporate Governance as stipulated

in the above-mentioned Listing Agreement. The framework for risk management and its controls are in the process of being

formalised/updated.

We further state that such compliance is neither an assurance as to future viability of the Company, nor the efficiency or effectiveness with

which the management has conducted the affairs of the Company.

For Lodha and Co.

(Chartered Accountants)

Kolkata (H.K. Verma)

June 25, 2008 Partner


Auditors’ Report To the Members

We have audited the attached Balance Sheet of Hindusthan

National Glass & Industries Limited as at 31st March 2008 and

also the Profit and Loss Account and the Cash Flow Statement

for the year ended on that date, annexed thereto. These financial

statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial

statements based on our audit.

We conducted our audit in accordance with auditing standards

generally accepted in India. Those standards require that we plan

and perform the audit to obtain reasonable assurance about

whether the financial statements are free of material misstatement.

An audit includes, examining on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An audit

also includes assessing the accounting principles used and

significant estimates made by the management, as well as

evaluating the overall financial statement presentation. We believe

that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor’s Report) Order, 2003,

as amended by the Companies (Auditors Report)

(Amendment) Order, 2004 issued by the Central Government

of India in terms of Section 227(4A) of the Companies Act,

1956 and on the basis of such checks as we considered

appropriate and according to the information and

explanations given to us, we further report that:

i) (a) The Company has maintained proper records

showing full particulars including quantitative details

and situation of fixed assets.

(b) All the assets have not been physically verified by the

management during the year but there is regular

programme of verification, which, in our opinion, is

reasonable having regard to the size of the Company

and the nature of its assets. There were no material

discrepancies with regard to book records in respect

of the assets verified during the year.

(c) During the year, the Company has not disposed off

a substantial part of its fixed assets.

ii) (a) The inventory except stock lying with third parties and

in transit has been physically verified by the

management at regular intervals during the year. In

our opinion and according to the information and

explanations given to us, the frequency of verification

is reasonable.

(b) In our opinion, the procedure for the physical

verification of the inventory followed by the

management is reasonable and adequate in relation to

the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of

inventory. As explained to us, discrepancies noticed

on physical verification of inventory were not material.

iii) (a) The Company has not granted any loans, secured or

unsecured, to companies covered in the register

maintained under section 301 of the Act. Therefore

the provisions of clause 4(iii) (a) to (d) are not

applicable to the Company.

(b) The Company had taken unsecured loan from

companies covered in the register maintained under

section 301 of the Companies Act, 1956. The total

number of parties is three and the maximum amount

involved during the year was Rs. 1000 lac and at the

year-end there was no outstanding balance of loan.

(c) The terms and conditions of the aforesaid unsecured

loans were prima facie not prejudicial to the interest

of the Company.

(d) The above loans were interest free.

(e) There was no overdue amount in the aforesaid

unsecured loans.

iv) In our opinion and according to the information and

explanations given to us, having regard to the

explanations that some of the items are of special nature

for which alternative quotations are not available, there

are adequate internal control procedures commensurate

with the size of the Company and nature of its business

with regard to the purchases of inventory, fixed assets

and for the sale of goods and services. During the course

of our audit, no major weakness has been noticed in the

internal control system.

v) (a) To the best of our knowledge and belief and

according to the information and explanations given

to us, we are of the opinion that the transactions that

need to be entered into the register maintained under

section 301 of the Companies Act, 1956 have been

so entered.

(b) In our opinion, having regard to the remarks as given

in para (iv) above, the transactions made in

pursuance of contracts or arrangements entered in

the register maintained under Section 301 of the

Companies Act, 1956, and aggregating during the

year to five lac or more in respect of each party have


been at prices which are considered reasonable

having regard to prevailing market price for such

goods and materials.

vi) The Company has not accepted any deposits from the

public during the year.

vii) In our opinion, the Company has an adequate internal

audit system commensurate with its size and nature of

its business.

viii) The Central Government has not prescribed for the

maintenance of cost records under Section 209(1)(d) of

the Companies Act, 1956 in respect of any of the

Company’s product.

ix) (a) The Company is generally regular in depositing

undisputed statutory dues including Provident Fund,

Investor Education and Protection Fund, Employees’

State Insurance (except in case of Neemrana unit

where Provident Fund, and Employees’ State

Insurance were deposited after receipt of PF

code/No.) Wealth Tax, Service Tax, Income Tax,

Sales Tax, Custom duty, Excise duty, cess and other

material statutory dues with the appropriate

authorities.

(b) There are no undisputed statutory dues payable for a

period of more than six months from the date these

dues became payable as at 31st March 2008.

(c) According to the information and explanations given

to us, the statutory dues which have not been

deposited as on 31st March 2008 on account of

disputes are as under:

x) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current

or in the immediately preceding financial year.

xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial

institution, bank or debenture holders.

Name of the Nature of Dues Amount Period to which Forum where dispute

Statute (Rs. in lac) the amount relates is pending

(Financial year)

The Central Excise Excise Duty 7.04 1996-97, 1999-00, 2000-01, Commissioner of Central

Act, 1944 2001-02, 2004-05, 2007-08 Excise Appeals

1116.88 1995-96, 1996-97, 1997-98, CESTAT

1998-99, 1999-00, 2001-02,

2003-04, 2004-05, 2005-06

105.31 2000 – 01 Supreme Court

42.28 1998-99, 2005-06 Assistant Commissioner

Bombay Sales Sales Tax 51.26 1997-98 Sales Tax Tribunal, Mumbai

Tax Act, 1959

112.47 1997-98 Joint Commissioner of Sales

Tax, Nasik

Customs Act, 1962 Export obligation 4.32 2005-06 Director General of

demand against Foreign Trade

Advance licenses

Haryana General Sales Tax 77.52 2002 – 03 Assessing Authority (Jhajjar)

Sales Tax Act

Central Sales Tax Turnover Tax 6.31 1979-1980 Calcutta High Court

Act 1956 and Central Sales Tax 43.40 2002-2003 Deputy Commissioner

respective States’ West Bengal Sales Tax 6.31 2002-2003 (Appeal) Commercial Taxes

Sales Tax Act


xii) According to the information and explanations given to

us, the Company has not granted any loans and

advances on the basis of security by way of pledge of

shares, debentures and other securities.

xiii) The Company is not a chit fund or a nidhi mutual benefit

fund/society. Accordingly, the provisions of clause 4 (xiii)

of the Companies (Auditor’s Report) Order, 2003, as

amended by the Companies (Auditors Report)

(Amendment) Order, 2004 are not applicable to the

Company.

xiv) According to the information and explanations given to

us, the Company is not dealing or trading in shares,

securities, debentures and other investments.

Accordingly, the provisions of clause 4 (xiv) of the

Companies (Auditor’s Report) Order, 2003, as amended

by the Companies (Auditors Report) (Amendment) Order,

2004 are not applicable to the Company.

xv) In our opinion, the terms and conditions on which the

Company has given guarantee for loans taken by its

subsidiary company from bank are not prima facie

prejudicial to the interest of the Company.

xvi) According to the information and explanations given to

us, the term loans have been applied for the purpose for

which they were raised.

xvii) According to the information and explanations given to

us and on an overall examination of the Balance Sheet

of the Company, we report that short term fund have not

been used for long-term investment.

xviii) During the year, the Company has not made preferential

allotment of shares to parties and companies covered in

the register maintained under section 301 of the Act.

xix) No secured debenture has been issued during the year.

xx) The Company has not raised any money through a public

issue during the year.

xxi) Based upon the audit procedures performed and

information and explanations given to us, we report that

no fraud on or by the Company has been noticed or

reported during the course of our audit.

2. Attention is invited to Note 2(i) of Schedule S regarding non-

ascertainment and recognition of derivative transactions. The

impact of the above for the reasons mentioned in the said note

could not be ascertained and therefore cannot be commented

upon by us.

3. Further to above, we report that

i) We have obtained all the information and explanations,

which to the best of our knowledge and belief were

necessary for the purpose of our audit.

ii) The Balance Sheet, Profit and Loss Account and Cash

Flow statement dealt with by this report are in agreement

with the books of account.

iii) In our opinion, proper books of account as required by

law have been kept by the Company so far as appears

from our examination of these books.

iv) In our opinion, the Balance Sheet, Profit and Loss

Account and Cash Flow statement dealt with by this

report excepting AS –1 on “Disclosure of Accounting

Policies’’ on account of derivative transaction comply with

the Accounting Standards referred to in Section 211 (3C)

of the Companies Act, 1956 to the extent applicable.

v) On the basis of the written representations from the

Directors and taken on record by the Board of Directors,

none of the Directors is disqualified as on 31st March,

2008 from being appointed as a Director under Section

274(1)(g) of the Companies Act, 1956.

vi) In our opinion and to the best of our information and

according to the explanations given to us, the said

accounts subject to our remarks as given in para 2 above,

together with the overall impact ,which is not ascertainable

and read together with other Notes on Accounts of

Schedule “S” give the information required by the

Companies Act, 1956 in the manner so required and also

give a true and fair view in conformity with the accounting

principles generally accepted in India:

a) In the case of Balance Sheet, of the state of affairs of

the Company as at 31st March, 2008 and

b) In the case of Profit and Loss Account of the

Company, of the profit for the year ended on that

date.

c) In the case of Cash Flow Statement, of the cash flows

for the year ended on that date.

For Lodha & Co.

Chartered Accountants

H K Verma

Place: Kolkata-700069 Partner

Date: 25th June 2008 Membership No: 55104


The Schedules referred to above form an integral part of Balance Sheet

As per our report of even date

For Lodha & Co. Mukul Somany Sanjay Somany

Chartered Accountants Jt. Managing Director Managing Director

H. K. Verma

Partner Priya Ranjan Ram Raj Soni

Kolkata Company Secretary Chief Financial Officer

June 25, 2008

Balance Sheet As at 31st March, 2008Rs in lac

SCHEDULES As at 31.03.2008 As at 31.03.2007

SOURCES OF FUNDS

Shareholders' Funds

Share Capital A 1746.77 1104.35

Reserves and Surplus B 84612.65 21698.65

86359.42 22803.00

Loan Funds

Secured Loans C 28742.96 17885.09

Unsecured Loans D 13127.61 6883.77

41870.57 24768.86

Deferred Tax Liabilities (Net) 1807.52 4532.10

Total : 130037.51 52103.96

APPLICATION OF FUNDS

Fixed Assets

Gross Block 125746.20 55962.55

Less: Depreciation 41031.42 22471.78

Net Block E 84714.78 33490.77

Capital Work-In-Progress 4510.70 3652.61

Investments F 11458.50 1087.21

Current Assets, Loans and Advances

Current Assets

Inventories G 16414.97 9332.82

Sundry Debtors H 16449.63 8976.90

Cash and Bank Balances I 1678.98 63.96

Loans and Advances and Other Current Assets J 13654.98 4741.43

48198.56 23115.11

Less

Current Liabilities and Provisions

Current Liabilities K 14857.67 7077.93

Provisions L 3987.36 2163.81

18845.03 9241.74

Net Current Assets 29353.53 13873.37

Total 130037.51 52103.96

Significant Accounting Policies and Notes on Accounts S


The Schedules referred to above form an integral part of Profit & Loss Account




H. K. Verma



June 25, 2008

Profit and Loss Account For the year ended 31st March, 2008

SCHEDULES 31.03.2008 31.03.2007

INCOMESales (Gross) M 114833.90 59539.68 Less : Excise Duty 12704.21 7653.59

102129.69 51886.09 Other Income N 1113.96 619.43 Increase / (Decrease) in Stock O (424.86) (321.92)

102818.79 52183.60 EXPENDITUREMaterials P 29251.61 14877.35 Manufacturing and Other Expenses Q 52100.07 26981.38

81351.68 41858.73 Profit before Depreciation, Interest and Tax 21467.11 10324.87 Depreciation 7293.97 3550.43 Transfered From Revaluation Reserve (281.21) (237.98)

7012.76 3312.45 Interest and Finance Expenses R 2346.87 1909.68

9359.63 5222.13 Profit before Tax 12107.48 5102.74Less : Provision for Income Tax

- Current Tax 1506.25 - Minimum Alternate Tax 1367.57 - Less: Mat Credit entitlement 1367.57 - Fringe Benefit Tax 36.90 18.01 - Deferred Tax (2663.49) 190.48 - Income Tax of Earlier years (1299.82) (36.46)

Profit after Tax 16033.89 3424.46 Add : Balance brought forward from last year 705.57 907.01Amount Available for Appropriation 16739.46 4331.47 APPROPRIATIONSGeneral Reserve 14850.00 3499.98Proposed Dividend on Equity Shares 698.71Tax (including cess) on Proposed Dividend 118.75 Interim Dividend on Equity Shares 110.43Tax (including cess) on Interim Dividend 15.49Balance carried to the Balance Sheet 1072.00 705.57

16739.46 4331.47 Basic and Diluted Earning Rs per Share 91.79 31.01 (Refer Note No. 10 of Schedule ‘S’)Significant Accounting Policies and Notes on Accounts S

Rs in lac


Cash Flow Statement For the year ended 31st March, 2008

2007-08 2006-07A CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax and extraordinary items 12107.48 5102.74 Adjustments to reconcile profit before tax to cash provided by operating activities.Depreciation 7012.76 3312.45 Bad Debts & Provision for Doubtful debts 239.25 231.28 Provision for loss in value of current investment 0.17 Interest expenses (Net) 2346.87 1909.68 Dividend income (0.27) (0.26)Liability no longer required written back (95.92) (103.81)Unrealised Foreign Exchange Loss/(Gain) (Net) – (91.21)Realised Foreign Exchange Loss on Term Loans (Net) – 29.39 Interest received (120.29) (187.55)Loss / (Profit) on sale of Fixed Assets (Net) 61.45 34.95 Loss / (Profit) on sale of current Investments (Net) (8.15) (4.84)Operating Profit before working capital changes 21543.35 10232.82 Changes in current assets and liabilitiesLoans and advances (4974.99) (1142.49)Trade and other receivables (4056.07) 8.45 Inventories (441.64) 795.89 Trade and other payables 4316.59 114.10 Net Cash Generated by Operating Activities 16387.24 10008.77 Adjustments for :Direct Taxes paid (115.16) (945.93)Refund received – 81.87 Interest received on Income Tax Refund – 8.03 Fringe Benefit Tax paid (36.75) (17.97)Net Cash from Operating Activities 16235.33 9134.77

B CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Fixed Assets and changes in capital work in progress (13016.03) (6940.44)Proceeds on Disposal of Fixed Assets 161.13 512.31 Sale of Long Term Investments 42.93 –Purchase of Long Term Investments (4367.93) (1000.00)Purchase of Current Investments (5794.44) (4380.00)Sale of Current Investments 5802.59 4384.84 Dividend received 0.27 0.26 Interest received 34.57 222.29 Net Cash from Investing Activities (17136.91) (7200.74)

C CASH FLOW FROM FINANCING ACTIVITIES:Proceeds / (Repayment) from long term borrowings (Net) 812.38 (1827.46)Proceeds / (Repayment) from short term borrowings (Net) 3116.52 1913.25 Interest paid (2331.38) (1883.08)Dividend Paid during the year including Corporate Dividend Tax – (209.34)Net Cash from Financing Activities 1597.52 (2006.63)NET CHANGES IN CASH AND CASH EQUIVALENTS 695.94 (72.60)OPENING CASH AND CASH EQUIVALENTS 983.04 136.56 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 1678.98 63.96(represents cash in hand and bank balances)

Note: 1. The above cash flow Statement has been prepared under the "Indirect Method" as set out in the Accounting Standard 3 (AS-3) -Cash Flow Statements issued by The Institute of Chartered Accountants of India.

2. Previous Years figure's have been regrouped wherever necessary to conform to the Current years.

Rs in lac




H. K. Verma



June 25, 2008


Schedules forming part of the Accounts

Schedule - A I SHARE CAPITAL

31.03.2008 31.03.2007

AUTHORISED51,15,00,000 Equity Shares of Rs 10/- each. 51150.00 1150.00 (Previous Year 11500000 shares of Rs 10/- each)

51150.00 1150.00 ISSUED, SUBSCRIBED AND PAID-UP1,10,43,368 (Previous Year 1,10,43,368) 1104.34 1104.34Equity shares of Rs 10/- each fully paid up of which58,10,360 Shares of Rs 10/- each were allotted as fully paid up Bonus Shares by capitalisation of General ReserveShare Suspense Account (pending allotment pursuant to the scheme of arrangement 642.43(Refer Note 32 (d) of Schedule S)Forfeited Shares (Amount Originally paid up @Rs 5/- on 280 Shares) 0.01(Transferred to General Reserve during the year)

1746.77 1104.35

Rs in lac

Schedule - B I RESERVES AND SURPLUS

31.03.2008 31.03.2007

Capital Reserve

As per last Balance Sheet 0.04 0.06

Less: Transfer to General reserve 0.04 0.02 0.04

General Reserve


Add: Adjustment consequent upon amalgamation 31391.22

of erstwhile ACE Glass Container Ltd

[Refer Note No. 32(i)(b) of Schedule S]

Add: Transfer from Capital Reserve 0.04 0.02

Add: Transfer from Profit and Loss Account 14850.00 3499.98

Less: Adjustment on account of Transitional provision

under AS-15 [Refer Note No. 19(i) of Schedule S] 118.63

Less: Loss of erstwhile ACE Glass Containers Ltd for the

year ended 31.03.2007 [Refer Note No. 32(i)(c)(ii) of Schedule S] 3146.66

Less: Carrying Cost of shares held in erstwhile 7.55

Ace Glass Containers Ltd. pursuant to the

Scheme of Amalgamation [Refer Note No. 32(i)(c)(i)] of Schedule 'S'

Less: Merger expenses and others 83.18 59385.25 16500.01

[Refer Note No. 32(iv) of Schedule S]

Revaluation Reserve


Add: Revaluation of Land and Buildings 7,554.80

[Refer Note No. 7(ii) of Schedule S]

Less: Transfer to Profit and Loss A/c 281.21 237.98

[Refer Note No. 7(iv) of Schedule 'S']

Less: Adjustment on account of Sale / Discard of Assets 60.75 10601.57 430.50 3388.73


Schedule - B I RESERVES AND SURPLUS (Contd.)

31.03.2008 31.03.2007

Share Premium


Add: Adjustment consequent upon amalgamation of erstwhile

ACE Glass Container Ltd (Refer Note No. 32(i)(b) of Schedule S) 12,449.54

13553.84 1104.30

Profit and Loss Account

Surplus as per Profit and Loss Account 1072.00 705.57

84612.66 21698.65

Rs in lacSchedules forming part of the Accounts

Schedule - C I SECURED LOANS

Notes 31.03.2008 31.03.2007

I. Rupee term Loans

From Financial Institution

Export Import Bank of India 1 6327.78 2038.89

From Banks

- IDBI Bank Limited 750.00

- State Bank of India 2 2432.00 4166.67

- The Honkong & Shanghai Banking Corporation Limited 3 4562.50

II. Foreign Currency Loans

From Banks

- State Bank of India

Foreign Currency Term Loan - I 229.00

Foreign Currency Term Loan - II 169.82

- The Honkong & Shanghai Banking Corporation Limited - PCFC 4 599.16

- ICICI Bank - External Commercial Borrowing 5 2005.50 2158.50

III. Working Capital Loans From Banks 6 12494.80 8038.31

IV. Loans under Vehicle Finance Scheme

From Banks 7 293.05 322.77

From Others 7 7.13 11.13

V. Interest accrued and due 21.04

28742.96 17885.09

Notes:1) The loans are Secured by first charge ranking pari-passu with charges created and/or to be created on all immovable propertiesby way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.

2) The loans are Secured by first charge ranking pari-passu with charges created and/or to be created on all immovable propertiesby way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders. These loans are alsocollterarlly secured by second charge on Current Assets of the said plants.

3) This includes term loan of Rs 1562.50 lac taken for Nashik plant and is Secured by first charge ranking pari-passu with chargescreated and/or to be created on all immovable properties by way of equitable mortgage and hypothecation of all moveable propertiesboth present and future of Rishikesh, Pondicherry and Nashik Plants, save and except specific assets exclusively hypothecated in favourof respective lenders. Balance Rs 3000 lac are Secured by first charge ranking pari-passu with charges created and/or to be created



Schedule - D I UNSECURED LOANS

Schedule - E I FIXED ASSETS

31.03.2008 31.03.2007

a) Short Term Loans

From Banks 8555.45 1750.80

Non Convertible Debentures * 3000.00 2000.00

From Others 27.04 1313.10

b) Other Loans

Interest Free Loans from associate companies 1000.00

c) Trade Deposits 100.10 100.10

d) Sales Tax Deferment Loan 1445.02 719.77

13127.61 6883.77

Note:

* Represents Mibor linked Non-Convertible Debentures privately placed with - JM Mutual Fund (Previous Year- Canbank Mutual Fund)

on all immovable properties by way of equitable mortgage and hypothecation of all moveable properties of Neemrana Plant, save andexcept specific assets exclusively hypothecated in favour of respective lenders.

4) This loan is secured by hypothecation of inventories (both present and future) and book debts and second charge on allimmoveables, moveable properties including land and building of Rishra, Bahadurgarh and Neemrana plants.

5) This loan is Secured by first charge ranking pari-passu with charges created and/or to be created on all immovable properties byway of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh and NeemranaPlants, save and except specific assets exclusively hypothecated in favour of respective lenders.

6) This includes Rs 3893.25 lac secured by hypothecation of inventories (both present and future) and book debts and second chargeon all immoveables, moveable properties including land and building of Rishikesh, Pondicherry and Nashik plants. The balance of Rs 8601.55 lac is secured by hypothecation of inventories (both present and future) and book debts and second charge on allimmoveables, moveable properties including land and building of Rishra, Bahadurgarh and Neemrana plants.

7) Secured by hypothecation of vehicles financed in favour of respective lenders.Rs in lac

GROSS BLOCK DEPRECIATION NET BLOCK

Book Value

PARTICULARS As on Acquired on Additions Deductions/ As at Upto Acquired on For the Deductions / Upto As at As at

01.04.07 Amalgamation Adjustments 31.03.08 01.04.07 Amalgamation Year Adjustments 31.03.08 31.03.08 31.03.07

as on Addition

01.04.06 during

2006-2007

TANGIBLE

1 Land 1102.50 5908.70 7220.59 14231.79 3.23 2.37 5.60 14226.19 1102.50

2 Leasehold Building 9.18 9.18 0.03 0.15 0.18 9.00 9.15

3 Buildings 5108.27 5521.71 1.85 2742.77 2.51 13372.09 1382.45 682.91 393.73 2459.09 10913.00 3725.82

4 Plant and Machinery 48615.43 37597.55 1314.98 10305.03 1796.35 96036.64 20686.26 11880.86 6731.11 1547.06 37751.17 58285.47 27929.17

5 Furniture and Fixtures 111.98 198.86 14.41 26.86 3.10 349.01 51.72 83.35 15.08 0.77 149.38 199.63 60.26

6 Railway Siding 2.09 2.09 2.09 2.09

7 Office and Other 74.68 248.50 53.38 1.09 375.47 27.61 140.23 26.49 0.26 194.07 181.40 47.07

Equipments

8 Vehicles 909.00 110.04 44.54 284.13 60.37 1287.34 314.21 32.36 121.46 32.00 436.03 851.31 594.79

INTANGIBLE

9 Computer Software 29.42 37.16 26.91 10.90 82.59 7.41 33.73 3.57 10.90 33.81 48.78 22.01

55962.55 49622.52 1375.78 20659.67 1874.32 125746.20 22471.78 12856.67 7293.96 1590.99 41031.42 84714.78 33490.77

Previous Year : 53403.52 5043.77 2484.74 55962.55 20427.13 3550.43 1505.78 22471.78 33490.77


Face Value 31.03.2008 31.03.2007

Rs Nos.

(A) Long Term

Trade

Fully Paid-up Equity Shares

Unquoted

Capexil Agencies Ltd. 1000 5 0.05 0.05

Ceramic Decorators Ltd. 10 7 – –

Ace Glass Containers Ltd. (PY 149901400 shares) 10 15.10

HNG Float Glass Ltd. 10 10000 4201.00 1.00

Other Than Trade

Unquoted

Units of CAN FMP 13M-SRI (Close ended) 10 10000000 1000.00 1000.00


In Subsidiary Companies

Glass Equipment (I) Ltd. 100 26400 55.82 55.82

Quality Minerals Ltd. 100 9384 9.38 9.38

The Calcutta Stock Exchange Association Limited 1 8364 167.28

Government Securities

Unquoted

Deposit With Govt. Authorities *

(a) 12 Years National Savings Certificate 0.01 0.01

(b) 7 Years National Savings Certificate 0.01 0.01

(c) 6 Years National Savings Certificate 6.49 5.84

Beneficial Interest in Shares held in HNG Trust 7.55 –

(Refer Note No. 32(e) of Schedule 'S')

Beneficial Interest in Shares held in Ace Trust 6009.35 –

(Refer Note No. 32(f) of Schedule 'S')

(B) Current

Other Than Trade

Quoted

Kajaria Ceramics Ltd. 2 5470 1.56

Total: 11458.50 1087.21

* Rs 0.42 lac since matured but not encashed

Aggregate book value of Unquoted Investments 11456.94 1087.21

Aggregate book value of quoted Investments 1.56

Aggregate market value of quoted Investments 1.56

Note :

1) 33071882 Units of Mutual Funds being current investments purchased and redeemed during the year.

(Previous year 10201956 units) (Refer Note No. 29 of Schedule 'S')

Rs in lac


Schedule - F I INVESTMENTS



Schedule - G I INVENTORIES(As taken, valued and certified by the Management)

31.03.2008 31.03.2007

Raw Materials 2615.54 750.81

Stores and Spare parts 7229.13 3486.48

(Including in transit Rs 560.02 lac, Previous year Rs 172.48 lac.)

Packing Materials 423.81 225.96

Stock-in-Process 409.76 272.60

Finished Goods 5736.73 4596.97

16414.97 9332.82

Rs in lac

Schedule - H I SUNDRY DEBTORS(Unsecured, considered good unless otherwise stated)

Debts due for a period exceeding six months

Considered good 939.30 669.38

Considered doubtful 991.53 392.80

1930.83 1062.18

Less: Provision for doubtful debts 991.53 392.80

939.30 669.38

Others Debts 15510.33 8307.52

16449.63 8976.90

Schedule - I I CASH AND BANK BALANCES

Cash Balance on hand 29.19 15.85

Cheques in hand 1078.26

Balances With Scheduled Banks

in Current Accounts 513.85 48.11

in Margin Money Accounts * 40.03

in Fixed Deposit Accounts * 17.65

* (Receipts pledged with the banks and government

authorities for Rs 57.18 lac, PY Rs NIL) 1678.98 63.96


Schedule - J I LOANS AND ADVANCES AND OTHER CURRENT ASSETS (Unsecured and Considered good)

31.03.2008 31.03.2007

Loans

To Bodies Corporate 4724.00

Advances recoverable in cash or in kind or for value to be received 2060.65 1083.19

(Net of Doubtful Advances Rs 240.65 lac, Previous Year: Rs NIL)

VAT Credit (Inputs) Account 613.24 393.59

Advance Income Tax 2866.40 1396.75

Tax Deducted at Source 175.80 65.17

Advance FIT 37.66

Mat Credit Entitlement 1367.57

Advance towards equity participation 517.69

Deposits and balances with Government Authorities and Other Departments 1581.33 1199.25

Other Deposits 132.37 85.16

13559.02 4740.80

Other Current Assets

Interest Receivable 85.72

Fixed Assets Held for disposal 10.24 0.63

(at lower of net book value or estimated net realisable value)

13654.98 4741.43


Schedule - K I CURRENT LIABILITIES

Sundry Creditors

Dues to Small scale undertaking(s) 121.66

Dues to Micro, Small & Medium Enterprises 55.68

Others 13864.03 6674.90

Subsidiary Companies 715.29 87.88

Interest accrued but not due on Loans 104.25 88.76

Commission to Directors 118.40 100.00

Unclaimed dividend * 0.02 4.73

* This is not due for payment to Investor Education & Protection Fund. 14857.67 7077.93

Schedule - L I PROVISIONS

For Taxation 2111.27 2043.70

For Gratuity and Unavailed Leave 1020.55 119.84

For Fringe Benefit Tax 38.08 0.27

For Proposed Dividend 698.71

For Tax on Proposed Dividend 118.75

3987.36 2163.81


Schedule - M I SALES

31.03.2008 31.03.2007

Finished Goods 113962.18 59353.57

Others 708.69 182.30

General Merchandise Sale 163.03 3.81

114833.90 59539.68

Less: Excise Duty 12704.21 7653.59

102129.69 51886.09


Schedule - N I OTHER INCOME

Hire charges 40.54 46.09

Dividends On Trade and Long Term Investments 0.26 0.26

Dividends On Current Investments - other than trade 0.01

Interest on deposits,etc. 61.11 187.55

Income from Derivatives 71.29

Rent 34.38 40.57

Insurance Claims 1.98 0.90

Miscellaneous Receipts 475.15 197.85

Liabilities no longer required written back 95.92 103.79

Profit on Assets Sold/Discarded 15.10 34.41

Profit on sale of current investments - other than trade 8.15 4.84

Foreign Exchange Fluctuation (Net) 310.07 3.17

1113.96 619.43

Schedule - O I INCREASE / (DECREASE) IN STOCK

Closing Stock


Work-in-Process 409.76 272.60

6146.49 4869.57

Less :

Opening Stock :

Finished Goods 4596.97

Add: Vested pursuant to Scheme of Amalgamation 1648.06 6245.03 4914.14

Work-in-Process 272.60

Add: Vested pursuant to Scheme of Amalgamation 53.72 326.32 277.35

6571.35 5191.49

Increase / (Decrease) (424.86) (321.92)

Schedule - P I MATERIALS

Raw Materials Consumed 29059.45 14874.25

Purchase of Trading Material 192.16 3.10

29251.61 14877.35


Schedule - Q I MANUFACTURING AND OTHER EXPENSES

31.03.2008 31.03.2007

Stores and Spare Parts Consumed 5767.83 3371.85

Power and Fuel 27187.58 13510.33

Packing Material Consumed and Packing Charges 7605.62 3868.28

Salaries,Wages and Bonus etc 4270.50 2003.10

Contribution to Provident and other Funds 722.79 238.88

Workmen and Staff Welfare Expenses 420.24 237.39

Rent 95.43 29.92

Rates and Taxes 57.83 24.39

Repair and Maintenance :

Buildings 132.87 30.66

Plant and Machinery 1104.51 675.53

Others 209.78 91.28

Freight outwards, transport and Other Selling Expenses 1003.38 855.00

(Net of realisation of Rs 983.56 lac, PY Rs 1498.34 lac )

Commission on Sales 116.10 121.29

Cash Discount on Sales – 2.18

Insurance 147.45 153.44

Charity and Donation 31.00 4.76

Bad Debts/Advances written off 185.81 29.88

Less: Provision for Doubtful Debts / advances written back (195.92) (10.11) – 29.88

Provision for Doubtful Debtors/Advances 249.36 201.40

Provision in value for Current Investments 0.17 –

Excise Duty on Stock (28.13) 327.25

Directors' Remuneration 244.99 214.68

Provision For Loss on Derivative Transaction 313.94 –

Loss on sale/discard of fixed assets 76.55 70.56

Miscellaneous Expenses 2380.39 919.33

52100.07 26981.38


Schedule - R I INTEREST AND FINANCE EXPENSES

On Debentures 569.50 515.91

On Term Loans 1510.40 1062.54

Bank and Others 135.19 209.26

Finance Expenses 131.78 121.97

2346.87 1909.68


Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS


1. Significant Accounting Policies

a. Accounting Convention

The accounts, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been prepared

on the basis of the historical cost and on the accounting principles of a going concern. The accounts have been prepared in

accordance with the provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (Accounting

Standards) Rules, 2006.

b. Use of Estimates

The preparation of financial statements require management to make estimates and assumption that affect the reported amount

of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reported

amounts of income and expenses during the year. Difference between the actual results and the estimates are recognised in the

year in which the results are known/materialised.

c. Fixed Assets

Fixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have been

revalued or at fair value as the case may be.

d. Depreciation and Amortisation

Tangible Assets

i. Depreciation has been provided at the rates specified under Schedule XIV to the Companies Act, 1956 on assets

installed/acquired up to 31st March, 1990 on written down value method and in respect of additions thereafter on straight line

method.

ii. Certain Plant and Machinery have been considered as continuous process plant as defined under Schedule XIV to the

Companies Act, 1956 on the basis of technical evaluation.

iii. Depreciation on increase in value of Fixed Assets due to revaluation is provided on the basis of remaining useful life as

estimated by the valuer on the straight line method and is transferred from Revaluation Reserve to Profit and Loss Account.

iv. Depreciation on incremental cost arising on account of exchange difference is amortised over the remaining life of the assets.

v. Second hand machines are depreciated based on their useful lives as estimated by independent technical experts.

Intangible Assets

vi. Computer Software are amortised over a period of three years.

e. Impairment

Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,

recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assets

belonging to Cash Generating Unit (CGU) exceeds recoverable amount. The recoverable amount is the greater of assets net

selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted

to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and

such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value or the

respective assets, which in case of CGU, are allocated to its assets on a prorata basis.

f. Investments

Long Term Investments are stated at cost, less provision for diminution in value other than temporary, if any. Current Investments

are valued at cost or fair value whichever is lower.

g. Inventories

Inventories are valued at the lower of cost or estimated net realisable value. In respect of Raw Materials, Stores, Spare Parts, Fuel,

Building and Packing Materials the cost include the taxes and duties other than those recoverable from taxing authorities and


Schedule - S I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)


other expenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost include manufacturing

expenses and appropriate portion of overheads. The cost of inventories is determined on the weighted average basis.

Own manufactured moulds used for the manufacture of glass items are recorded at weighted average cost, which includes prime

cost, factory and general overheads and the same are classified as stores and spare parts under inventories.

h. Foreign Exchange Transactions

Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency

monetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon and also on

the exchange differences on settlement of the foreign currency transaction during the year are recognised as income or expenses

and are adjusted to the profit and loss account.

i. Revenue Recognition

i) All Expenses and Incomes are accounted for on mercantile basis except otherwise stated.

ii) Income from Export Incentives is recognised on the basis of certainties as to its utilisation and related realisation.

iii) Sales are inclusive of Packing Charges and Excise Duty but exclusive of Value Added Tax, Rebates, Discounts and Claims

etc.

j. CENVAT / Value Added Tax (VAT) Credit

Cenvat / VAT credit whenever availed on Fixed Assets is set off with the cost of the assets. Other Cenvat / VAT credit wherever

availed is adjusted with the cost of purchases of Raw Material or Stores as the case may be.

k. Employee Benefits

Employee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Plan

for its employees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fund

which are fully funded and administered by the trustees / government. The Company Contributes to the Employees’ Pension

Scheme 1995 for certain categories of employees. Contributions are recognised in the Profit and Loss account on accrual basis.

Long-term employee benefits under define benefit scheme such as gratuity, leave encashment etc are determined at the close of

each year at the present value of the amount payable using actuarial valuation techniques.

Actuarial gains and losses are recognised in the year when they arise.

l. Research and Development

Revenue Expenditure on Research and Development is charged to the Profit and Loss Account in the year in which it is incurred.

m. Subsidies and Grants

Cash Subsidy related to Fixed Assets to the extent received is being credited directly to Capital Reserve and apportioned to

General Reserve over the life of the assets. Subsidy related to the total investment in the project is treated as Capital Reserve. Other

Government grants including incentives etc. are credited to Profit and Loss Account or deducted from the related expenses.

n. Borrowing Cost

Borrowing cost that are attributable to the acquisition/construction of Fixed Assets are capitalised as part of the cost of respective

assets. Other borrowing costs are recognised as an expense in the year in which they are incurred.

o. Income Tax

Provision for Tax is made for current tax, deferred tax and fringe benefit taxes. Current tax is provided on the taxable income using

the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capable

of reversal in subsequent periods are recognised using tax rates and tax laws, which has been enacted or substantively enacted.

Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will

be available against which such deferred tax assets will be realised. In case of carry forward of unabsorbed depreciation and tax

losses, deferred tax assets are recognised only if there is “virtual certainty” that such deferred tax assets can be realised against

future taxable profits.




p. Lease

Where the Company is the lessee, finance leases, which effectively transfer to the Company substantially all the risks and benefits

incidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of the minimum lease

payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance

charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against

income. Lease management fees, legal charges and other initial direct costs are capitalised.

Leases rentals in respect of assets taken under finance lease up to March 31, 2001 are amortised over the total term of the lease

(including extended secondary lease term).

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified

as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis

over the lease term.

q. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result

of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosed

in the financial statements. Contingent Liabilities, if material are disclosed by way of notes.

2007-08 2006-07

2. Contingent liabilities not provided for

a) Outstanding Bank Guarantees 1384.86 1006.31

b) Income Tax matters in respect of erstwhile AGCL under dispute. 3.41 Nil

c) Sales Tax matter under Appeals 214.25 Nil

d) Excise Duty demand/Show Cause notices issued against which the

Company has preferred appeals/replies and which in the opinion of

the management is not tenable. 1703.25 349.11

e) Cases pending with Labour Courts (to the extent ascertainable) 549.59 Nil

f) Claim for increased price of land acquired at Bahadurgarh by the then

Punjab Government and given to the Company against which the

claimants have preferred an appeal in the Supreme Court against the

Order of the High Court. 0.30 0.30

g) Amount of duty against Export Obligation in respect of exemption availed

against Advance License Scheme. 4.32 74.48

h) Other Claims against the Company not acknowledged as debt. 26.10 26.40

i) In respect of a derivative transaction with Kotak Mahindra Bank Ltd.

(the bank) the Company has challenged its validity and legality.

The matter is sub-judice. Based on the legal advice, the contract is void

and not tenable. The loss in respect of above on mark to market basis is

indeterminable. The claims raised (periodic) by the bank is for Rs 404.18 lac 404.18 Nil

j) Corporate guarantee to bank/ government authorities on behalf of an

Associate for borrowing availed. Nil 2500.00

k) In respect of Neemrana plant a notice has been received from civil court

filed by creditors of Haryana Sheet Glass Ltd. demanding their outstanding

payments and stating that plant cannot be transferred unless their dues

are paid. However the matter is sub-judice.

Rs in lac




2007-08 2006-07

l) Counter Guarantee furnished to Government and other authorities on

behalf of following Companies:

i) SPL Ltd. Nil 12.00

ii) Glass Equipment (India) Ltd. (Subsidiary Company) 381.00 381.00

Notes :

On the basis of current status of individual cases and as per the legal advice

obtained, wherever applicable the management is of the view that no provision

is required in respect of these cases.

Further cash outflow in respect of b) to k) is dependent upon the outcome of

final judgments / decisions.

3. Capital commitments 1212.88 1363.52

(Net of advance of Rs 356.46 Lac, previous year Rs 248.65 Lac)

4. Capital Work-in-Progress includes Pre-operative expenses pending allocation:

i) Salary and Wages 23.99 1.13

ii) Power and fuel 23.02 8.03

iii) Miscellaneous Expenses 31.21 0.22

iv) Interest on term loan 239.25 121.82

Add: Brought forward from previous year 163.97 32.77

Total carried forward 481.44 163.97

5. During the year the Company has acquired all the fixed assets and inventories (excepting finished goods) of glass unit situated

at Neemrana of Haryana Sheet Glass Limited for a total consideration of Rs 2500 lac. Allocation of cost on plant and machinery

has been carried out on the basis of the value determined by the approved valuer, Land and Buildings on the basis of the

consideration paid and inventories as estimated by the management.

6. In respect of Fixed Assets acquired from Larsen & Toubro Limited by the erstwhile Ace Glass Containers Limited under the Business

Transfer Agreement, which are estimated to have lower residual lives than that envisaged as per the rates provided in Schedule

XIV of the Companies Act 1956, depreciation has been provided based on the estimated shorter residual lives as follows:

Rates as prescribed by Rates of Depreciation

Particulars of Fixed Assets Schedule XIV to the on assets applied

Companies Act, 1956

Buildings (other than factory buildings) 3.34 5.21

Factory Buildings 1.63 2.04

Plant and Machinery

Used for single shift operations 4.75 11.44

Continuous Process Plant 5.28 11.44

Used for Triple Shift operations 10.34 11.44

Direct Fire Glass Melting Furnace working on Triple Shift Operations 16.21 16.21

Furniture & Fixtures 6.33 17.37

Vehicles 9.50 9.50

Computers 16.21 17.95

These assets originally acquired by the erstwhile Ace Glass Containers Limited (AGCL) and vested to the Company pursuant to

the Scheme of Amalgamation. The practice of charging depreciation on these assets is consistently followed.

Rs in lac




2007-08 2006-07

7. i) Land and Buildings of Rishra and Bahadurgarh unit were revalued by an

approved valuer on 1.4.92 on current replacement cost basis. Accordingly,

net amount transferred to Revaluation Reserve Account. 3337.19 3337.19

ii) During the year Land and Buildings of Rishra and Bahadurgarh unit were

revalued by an approved valuer on 31.03.06 on current replacement cost

basis. Accordingly, net amount transferred to Revaluation Reserve Account. 7554.80 Nil

iii) Plant and Machinery of Rishra and Bahadurgarh unit were revalued by an

approved valuer, on 1.4.95 on current replacement cost basis. Accordingly,

net amount transferred to Revaluation Reserve Account. 4831.31 4831.31

iv) Depreciation transferred from Revaluation Reserve Account to

Profit and Loss Account. 281.21* 237.98

* Include Rs 116.43 for the year ended 31.03.2007

8. Miscellaneous Expenses include

a) Payment to Statutory Auditors:*

i) Audit Fees 9.00 3.30

ii) Tax Audit Fees 1.50 1.20

iii) Management Services and Certification work 2.00 1.64

iv) Reimbursement of Expenses 0.71 0.39

b) Directors Travelling and Other Expenses 33.47 37.06

* excluding Service Tax

9. Sundry Creditors include Acceptances 392.14 Nil

10. Earning per share

Profit after Tax (Rs In Lac) 16033.89 3424.46

Number of shares outstanding 17467713 11043368

Earning per share (Basic) (Rs) 91.79 31.01

11. Computation of Net Profit in accordance with Section 198 of the

Companies Act, 1956 and Commission payable to Directors

Profit before tax as per Profit and Loss Account 12107.48 5102.74

Add: Directors' Remuneration 126.59 114.68

Executive Directors’ Commission 110.40 96.00

Non Executive Directors' Commission 8.00 4.00

Total 12352.47 5317.42

Profit under section 198 of the Companies Act, 1956. 12352.47 5317.42

Commission Payable

a) To the Managing Director @1% of Net Profit restricted to Annual Salary 55.20 48.00

b) To the Joint Managing Director @1% of Net Profit restricted to Annual salary 55.20 48.00

c) To the Non Executive Directors @1% of Net Profit restricted to

Rs 1.00 Lac per Director (Previous Year Rs 0.50 Lac per Director) 8.00 4.00

12. Directors' Remuneration include:

i) Salaries 110.40 96.00

ii) Contribution to Provident and Other Funds 13.25 11.52

iii) Other Perquisites 2.94 7.16

iv) Commission 118.40 100.00

Rs in lac




13. Financial and Derivative Instruments

a) The Company has entered into certain currency swap transaction, the cash flows arising there from are recognised in the

books of account as and when the settlements takes place in accordance with the terms of the respective contracts over the

tenure thereof. All derivative and financial instruments acquired by the Company are for hedging purpose only. However, in

pursuance of announcement dated March 29, 2008 of the Institute of Chartered Accountants of India on “Accounting for

derivatives” loss on account of derivative transaction as on March 31, 2008 stood at Rs 313.94 lac as estimated by the

management, arising from hedging transaction undertaken by the Company has been provided for.

2007-08 2006-07

b) Outstanding particulars of derivative instruments 3993.25 1755.48

(CY: One deal with regard to option trade in US $ 4 million, Two deals with

regard to Currency Swap in CHF 5.93 million; PY: One deal with regard to

Currency swaps in US$ 2 million, One deal with regard to option

in EURO 1.5 million)

c) Foreign currency exposure outstanding as on March 31, 2008 which

has not been hedged by the derivative instruments

Loans (CY: US $ 23.18 million; PY: US$ 16.92 million) 9297.11 7372.02

Creditors (CY: US $ 3.47 million, EURO 0.58 million, GBP 0.20 million,

AUD 0.002 million; PY: US$ 1.97 million, EURO 0.88 million) 1779.73 1368.24

Debtors (CY: US $ 1.51 million; PY: US$ 0.32 million) 1069.01 137.92

d) Net Gain / (Loss) on account of exchange difference adjusted to the Nil 54.80

carrying amount of fixed assets/capital work-in-progress.

e) The amount of Exchange Gain/(Loss) on foreign Currency transaction 310.07 3.17

adjusted to respective heads of accounts of the Profit and Loss Account.

14. a) Electricity duty waiver benefit under West Bengal Incentive Scheme 2004 Nil 30.52

and subsidy received under The West Bengal Incentive to Power Intensive

Industries Scheme 2005 has been credited to Power and Fuel Account.

b) Amount included in VAT Credit Inputs Account shown under Loans and 411.40 301.01

Advances can be utilised only after repayment of corresponding amount

of Sales Tax Deferred Loan.

Rs in Lac

15. i) The breakup of Deferred Tax Assets and Deferred Tax Liabilities is as given below : (Rs In Lac)

Opening as on (Charge)/ Credit Closing as at

01.04.2007 during the year 31.03.2008

Deferred Tax Assets

Brought Forward Losses and unabsorbed depreciation 0.00 1956.04 1956.04

Expenses Allowable on Payment Basis 173.08 677.44 850.52

Total Deferred Tax Assets 173.08 2633.48 2806.56

Deferred Tax Liabilities

Depreciation and related items 4705.18 (91.09) 4614.09

Total Deferred Tax Liabilities 4705.18 (91.09) 4614.09

Net Deferred Tax Liabilities (4532.10) 2724.57 (1807.52)

ii) During the year the Company has provided Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and

accordingly, based on evidences MAT Credit of Rs 1367.57 has been recognised in these accounts.




Sl. No. Name of the Company No. of Shares Loans (Rs lac)

1) Noble Enclave and Towers Pvt. Ltd. 1533544 1800.00

2) Topaz Commerce Ltd. 1299816 1800.00

16. Disclosure pursuant to clause 32 of Listing Agreement (Rs In Lac)

Outstanding as on Maximum balance

31.03.2008 outstanding during the year

1) No interest or interest below the rates specified in section 372 A 23.88 23.88

of Companies Act 1956*

2) Repayment beyond seven years or no repayment schedule Nil Nil

3) Repayment on Demand 4500.00 4528.84

4) Loan to Associates Nil Nil

5) Investment by Associates Nil Nil

Notes:

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

2. Interest free advances in the nature of loans and advances given to employees as per general rules of the Company have not

been considered.

17. Investment by the loanee in the shares of the Company:

None of the loanees have, per se, made investments in shares of the Company. The Investments represent share of the Company

held by these companies prior to the loans granted to these Companies.

18. During the Year, the Company has incurred Rs 7.91 lac (previous year Rs 3.20 lac on account of Research and Development

expenses, which has been charged to Profit and Loss Account.

19. As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard

are given below:

i. Effective 1.4.2007, the Company has adopted revised Accounting Standard 15 on “Employee Benefits” notified in the

Companies (Accounting Standards) Rules, 2006. The effect of transitional liability of Rs 78.23 lac (net of tax of Rs 40.28 lac)

on account of gratuity and Rs 40.40 lac (net of tax of Rs 20.80 lac on account of leave pay as required by AS-15 has been

adjusted to opening balance of General Reserve of the Company.

ii. The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards)

Rules, 2006, are given below:

Defined Contribution Scheme

Contribution to Defined Contribution Plan, recognised for the year are as under:

(Rs in Lac)

Employer’s Contribution to Provident Fund 147.75

Employer’s Contribution to Pension Fund 204.72

Employer’s Contribution to Superannuation Fund 14.89

The guidance on implementing Accounting Standard (AS-15) (Revised 2005) on Employees Benefits issued by Accounting

Standard Board (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be made

by the employers needs to be treated as “Defined Benefit Plan”. According to the management, in consultation to the actuary, it

is not practical or feasible to actuarially value the Provident liability in the absence of any guidance from Actuarial Society of India

and also due to the fact that the rate of interest as notified by the Government can vary annually. Accordingly, the Company is

currently not in a position to provide other related disclosures as required by the aforesaid AS – 15 read with ASB guidance.

However, with regard to the position of the fund and confirmation to the Trustees of such fund, there is no shortfall as at year-end.




Defined Benefit Plan

The employees’ gratuity fund scheme managed by Birla Sun Life Insurance is a defined benefit plan. The present value of obligation

is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as

giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The

obligation for leave encashment is recognised in the same manner as gratuity.

I. Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances

thereof are as follows: (Rs in Lac)

Gratuity Gratuity Leave Encashment

Funded Unfunded Unfunded

Liability at beginning of the year 527.51 588.57 148.74

Current Service Cost 46.77 52.57 29.00

Interest Cost 42.83 52.62 54.83

Actuarial (Gain) / Loss 49.51 59.43 2.38

Benefits paid 47.33 26.31 36.94

Liability at the end of the year 619.29 726.88 198.01

III. Expense recognised in the Income statement (Under the head “Contribution to provident and other funds” – Refer

Schedule Q) (Rs. in Lac)




Interest Cost 42.83 52.62 54.83

Expected Return on plan assets 43.02 Nil Nil

Net Actuarial (Gain) / Loss to be recognised 28.57 59.43 2.38

Expenses recognised in Profit and Loss account 75.15 164.62 86.21

IV. Balance Sheet Reconciliation (Rs. in Lac)



Opening Net Liability (10.18) 588.57 148.74

Expenses as above 75.15 164.62 86.21

Employers Contribution 43.05 26.31 36.94

Amount Recognised in Balance Sheet 21.92 726.88 198.01

II. Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:

(Rs in lac)

Gratuity (Funded)

Fair value of plan assets at the beginning of the year 537.70

Expected return on plan assets 43.02

Actuarial Gain / (Loss) 20.94

Employer contribution 43.05

Benefits paid 47.33

Fait value of plan assets at the end of the year 597.37

Total Actuarial Gain / (Loss) to be recognised




V. Compensated Absences

The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the Company

as at March 31, 2008 is Rs. 198.01 lac.

VI. Principal Actuarial assumptions at the Balance Sheet Date (Rs. in Lac)



Mortality Table LICI 1994-1996 LICI 1994-1996 LICI 1994-1996

Discount rate (per annum) 8.50 % 7.50 % 8.50 % / 7.50 %

Expected rate of return on plan assets (per annum) 8.00 % 8.00 % 0.00 %

Rate of escalation in salary (per annum) – 5.00 % 5.00 %

The estimates of rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion and

other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan

assets held, assessed risks, historical results of return on plan assets and the Company’s policy for plan assets management.

The contributions expected to be made by the Company for the year 2008-09 is yet to be determined.

20. The Company’s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management

this is only reportable segment, as per Accounting Standard 17 on Segment Reporting, issued under Companies (Accounting

Standards) Rules,2006.

Geographical Segment

The following table shows the distribution of the Company’s Sales by Geographical market.

21. The accounts of some of the customers are pending reconciliation / confirmation and the same have been taken as per the

balances appearing in the books. A provision of Rs. 991.53 Lac is carried in the books against doubtful debts and the management

is of the opinion that the same is adequate and no further provision is required there against.

22. In the opinion of the Management/Board of Directors, the “Current Assets Loans and Advances” have a value on realisation in the

ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

Sales Revenue by Geographical Market (Rs. in Lac)

Particulars 2007-2008 2006-2007

Domestic Market 109628.28 57479.05

Overseas Market 4333.90 1874.52

Total 113962.18 59353.57

Sundry Debtors: The following table shows the distribution of the Company’s debtors by Geographical Market: (Rs in Lac)

Particulars 2007-2008 2006-2007



Total 16449.63 8976.90




23. Loan to bodies Corporate include Rs. 4500 lac with Companies in which directors of the Company are interested as members/

directors. These loans were given by the erstwhile AGCL and none of the directors of the Company was director in the erstwhile

AGCL and accordingly, as advised legally, the provisions of section 295 of the Companies Act, 1956 are not applicable with regard

to these loans.

24. Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status

of the suppliers as defined under the “ Micro, Small and Medium Enterprise Development Act, 2006” (the Act). There are no delays

in payment made to such suppliers except in certain cases and there is no overdue amount outstanding as at the balance sheet

date. Based on above the relevant disclosures u/s 22 of the Act are as follows:

(Rs. in Lac)

1. Principal amount outstanding at the end of the year Rs. 140.40

2. Interest amount due at the end of the year Rs. 0.33

3. Interest paid to suppliers Rs. Nil

25. Export benefits, Insurance and other claims have been accounted for on accrual basis on acceptance/ascertainment of amount

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

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

27. Stores and Spare Parts also includes items, which are lying since earlier years. A provision of Rs. 618.03 lac towards

obsolescence is carried in the books and management is of the opinion that the same is adequate and no further provision is

required there against.

28. Related Party Disclosures as identified by the management in accordance with the Accounting Standard – 18 issued by the

Institute of Chartered Accountants of India and effective from April 1, 2001.

A) Subsidiary Companies

i) Glass Equipment (India) Limited

ii) Quality Minerals Limited

B) Associates

i) Ace Glass Containers Limited (since amalgamated with the Company)

C) Directors and Relatives

i) Mr C. K. Somany – Chairman and Non Executive Director (Relative of Key management personnel)

ii) Mr Sanjay Somany - Managing Director and Key management personnel

iii) Mr Mukul Somany - Jt. Managing Director and Key management personnel

iv) Mr Bharat Somany – Management Trainee (Relative of Key management personnel)

D) Enterprises over which any person described in [C (i) to (iv)] above is able to exercise significant influence and with

whom the Company has transactions during the year.

i) Ceramic Decorators Limited

ii) HNG Float Glass Ltd.

iii) Microwave Merchants Private Limited

iv) Mould Equipment

v) Noble Enclave and Towers Private Limited

vi) Rungamattee Trexim Private Limited

vii) Somany Foam Ltd.

viii) Spotme Tracon Private Limited

ix) Topaz Commerce Limited




The aggregate amount of transactions with the related parties as mentioned in (A) above is as given hereunder: (Rs in Lac)

2007-2008 2006-2007

Sale of Goods

Glass Equipment (I) Ltd 8.90 13.01

Purchase of Fixed Assets


Purchase of Goods


Quality Minerals Limited 237.06 110.46

Receiving of Services


Provision of Facilities


Dividend Received


Counter Guarantees Given


Counter Guarantees Taken


Payables


Quality Minerals Limited 55.42 35.70

The aggregate amount of transactions with the related party as mentioned in (B) above is as given hereunder:

2007-2008 2006-2007

Sale of Fixed Assets N.A * 59.79

Sale of Goods N.A * 192.16

Interest Received N.A * 59.18

Purchase of Fixed Assets N.A * 2.94

Purchase of Goods N.A * 139.67

Provision of Facilities N.A * 158.19

Lending - Inter – Corporate Deposit N.A * 5514.00

Receivables N.A * 138.54

Guarantee given against borrowings N.A * 2500.00

(* Since Amalgamated with the Company)

The aggregate amount of transactions with the related parties as mentioned in (C) above is as given hereunder:

Remuneration 2007-2008 2006-2007

1. Mr Sanjay Somany 117.02 101.76

2. Mr Mukul Somany 117.02 101.76

3. Mr Bharat Somany 1.80 1.44




The aggregate amount of transactions with the related parties as mentioned in (D) above is as given hereunder:

2007-2008 2006-2007

Receiving of Services

1. Ceramic Decorators Ltd 89.08 68.99

2. Mould Equipment 212.06 174.32

Sale of Goods

Somany Foam Ltd Nil 0.02

Sale of Fixed Assets

Somany Foam Ltd 1.05 Nil

Purchase of Fixed Assets

Somany Foam Ltd. 1.33 Nil

Purchase of Goods


2. Somany Foam Ltd. 1.61 Nil

Lending- Intercorporate Deposit

1. Microwave Merchants Private Limited 900.00 Nil

2. Noble Enclave and Towers Private Limited 1800.00 Nil

3. Topaz Commerce Limited 1800.00 Nil

Loans Taken:

Ceramic Decorators Ltd. 64.00 Nil

Rent Received


Interest Received

1. Microwave Merchants Private Limited 7.67 Nil

2. Noble Enclave and Towers Private Limited 14.14 Nil

3. Topaz Commerce Limited 15.48 Nil

Interest paid

1. Ceramic Decorators Ltd. 9.84 Nil

Payables

1. Ceramic Decorators Ltd. 77.36 110.12


3. Noble Enclave & Towers Pvt. Ltd. Nil 800.00

4. Rungamattee Trexim Pvt. Ltd. Nil 100.00

5. Spotme Tracon Pvt. Ltd. Nil 100.00

Receivables

1. HNG Float Glass Ltd. 0.00 517.69

2. Microwave Merchants Private Limited * 905.93 Nil

3. Noble Enclave and Towers Private Limited* 1810.93 Nil

4. Somany Foam Ltd 0.04 Nil

5. Topaz Commerce Limited* 1811.98 Nil

*Companies in which directors are interested as member /director(s).




29. Units of Bonds & Mutual Funds purchased and redeemed/sold during the year (Face value of Rs 10 each, except otherwise

stated) (Rs in Lac)

2007 - 2008 2006 - 2007

Sl. No. Name of Fund No. of Units Cost No. of Units Cost

a) Birla Cash Plus Institutional Growth Plan Nil Nil 1503601 300.00

b) Deutsche Insta Cash Plus Fund Nil Nil 1363054 150.00

c) RLF-Treasure Plan-Retail Option Nil Nil 878102 150.00

d) Kotak Mutual Fund Nil Nil 3740072 550.00

e) UTI Liquid Cash Plan Institutional-Growth Nil Nil 125071 1500.00

f) JM Financial Mutual Fund Nil Nil 2485213 500.00

g) UTI Floating Rate Fund Nil Nil 106843 1230.00

h) Sardar Sarovar Narmada Nigam Ltd DDB-2014 69 34.55 Nil Nil

i) Prudential ICICI Liquid 9931 1.74 Nil Nil

j) Birla Cash Plus Fund 1437485 300.00 Nil Nil

k) ING Vyasya Liquid Fund 4186735 500.00 Nil Nil

l) Birla Sun Life Cash Morgan Fund 10687377 1900.00 Nil Nil

m) HDFC Liquid Fund 6700893 1025.74 Nil Nil

n) UTI Liquid Cash Plan 49848 625.00 Nil Nil

o) HDFC Floating Rate Income Fund 7602172 1099.26 Nil Nil

p) Kotak Floater Short Term Plan 2397372 300.00 Nil Nil

Total 33071882 5786.29 10201956 4380.00

30. a) The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Block of Buildings

and Vehicles. The lease term is 75 years for Building. The lease term is 3 years for Vehicles, after which the legal title will pass

on to the Company. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum

lease payments payable in future at the balance sheet date and their present value are as under There is no escalation clause

in the lease agreement for vehicles.:

Particulars Lease payments Present value

(in Rs lac) (in Rs lac)

Not later than one year 18.36 16.39

Later than one year and not later than five year 19.99 63.60

Later than five year 45.24 1.74

b) Assets taken under operating leases:

Office premises and office equipments are obtained on operating lease. There is no contingent rent in the lease agreements.

The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in

the lease agreements. There are no restrictions imposed by lease agreements. There are no sublease and all the leases are

cancelable in nature. The aggregate lease rentals are charged as “ Rent ” in Schedule ‘Q’ of the financial statement.

31. Details of Products Manufactured, Turnover, Stock, Raw Material Consumed etc.

a. Capacities and Actual Production:

2007 - 2008 2006 - 2007

Installed Capacity Actual Production Installed Capacity Actual Production

I. Glass Plants

a) Glass Bottles and Vials 849525 4046387 489025 2942694

b) Pressed Tumblers at Bahadurgarh 5000 Nil 5000 Nil


Notes:

1. Installed Capacity has been given in MT and Actual Production has been given in '000 pcs.

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

No. S.O.477 (E) dated 25th July, 1991 issued by Government of India, Ministry of Industry, and Department of Industrial

Development. The installed capacity is as certified by the management.



b. Finished Goods, Stocks and Sales: (Rs in lac)

SALES * STOCKS

2007 - 2008 2006 – 2007 2007 – 2008 2006 – 2007**

Unit Qty. Value Qty. Value Qty. Value Qty. Value

Bottles 000 Pcs 4243567 113961.15 2907210 59352.01 275382 5735.68 412020 6243.58

Tumblers 000 Pcs 24 1.03 17 1.56 118 1.05 141 1.45

Others # 871.72 186.11

Total 4243591 114833.90 2907227 59539.68 275500 5736.73 412161 6245.03

* Sales includes breakages of bottles 17733 (P.Y. 1798) (‘000 pcs)

** Includes stocks vested pursuant to scheme of amalgamation Qty 47522 (‘000 pcs) and Value Rs 1648.06 lac.

# Others include General Merchandise Sale amounting to Rs 163.03 lac (PY Rs 3.81 lac) and sale of services Rs 708.69 lac.

(Previous year Rs 182.30 lac).

d. a) Raw materials consumed * (Rs in Lac)

2007-2008 2006-2007

Quantity Value ITEM Unit Quantity Value

316354 4131.34 Silica Sand MT 195444 2316.83

109442 12903.40 Soda Ash MT 66886 6921.41

232458 8049.13 Cullet MT 113889 3719.43

3914.85 Others MT 85813 1855.08

28998.72 Total 14812.75

* Excluding Rs 60.73 Lac (Previous Year Rs 61.50 Lac) being raw material processing charges.

c. Details of Purchases and Sales of General Merchandise: (Rs in Lac)

2007-2008

Description Unit Opening Purchase Sales Closing Stock

Qty Value Qty Value Qty Value Qty Value

Float Glass Sq Mt. – – 26580.74 97.46 14560.24 57.23 12020.54 44.16

Roop Cap ‘000 pcs 90 1.67 90 2.44 – –

Glass Bottle ‘000 pcs 3057 93.03 3057 103.36

Total – – – 192.16 – 163.03 44.16

2006-2007

Description Unit Opening Purchase Sales Closing Stock

Qty Value Qty Value Qty Value Qty Value

Glass Bottles '000 pcs. – – 26 1.59 26 1.80 – –

Roop Cap ‘000 pcs. 90 1.50 90 2.01 – –

Total – – – 3.10 – 3.81 – –


32. Amalgamation of Ace Glass Containers Limited(i) Pursuant to Scheme of Amalgamation and reorganisation of capital (the Scheme) under Section 391 to 394 of the Companies

Act 1956, with effect from April 1, 2006 (the Appointed Date), Ace Glass Containers Limited (AGCL) has been merged with theCompany. The erstwhile AGCL is engaged in manufacturing and sale of container glass.

The Scheme was sanctioned by the Hon’ble High Court at Calcutta vide its Order dated April 7, 2008 and by the Hon’ble HighCourt at Delhi vide its Order dated March 19, 2008. The Scheme became effective on April 28, 2008.

The amalgamation has been accounted for under the purchase method as prescribed by Accounting Standard 14 on“Accounting for Amalgamation” as notified by Companies (Accounting Standards) Rules, 2006. Pursuant to the Scheme:

a) The assets, liabilities, rights and obligations of erstwhile AGCL have been vested with the Company with effect from April1, 2006. All assets and liabilities (other than fixed assets and investments) of erstwhile AGCL have been recorded at theirrespective values as appearing in the books of the erstwhile AGCL as on March 31, 2006. All fixed assets and investmentsof the erstwhile AGCL have been recorded at their fair values as of the appointed date.



b) Value of raw materials, Spare Parts and components consumed (As certified): (Rs in lac)

2007-2008 2006-07

Raw Materials Spare Parts * Raw Materials Spare Parts *

Value % Value % Value % Value %

6502.61 22.42 1219.43 27.08 Imported 5201.30 35.11 670.23 27.36

22496.11 77.58 3282.81 72.92 Indigenous 9611.45 64.89 1779.64 72.64

28998.72 100.00 4502.24 100.00 Total 14812.75 100.00 2449.87 100.00

* Excluding Rs 1265.59 lac (Previous Year Rs 921.98 lac) being Stores consumption.(Rs in Lac)

2007-2008 2006-2007

E C.I.F. Value of Imports Raw Materials 5698.52 4335.33Components, Spare Parts and Stores etc. 1497.50 895.57Capital Goods (including CWIP) 1939.26 3231.02

F Expenditure in Foreign CurrencyTravelling Expenses 29.07 28.04Selling Commission 46.85 50.30Finance Charges 164.83 81.54Consultancy Charges 5.34 –Repairs 6.47 3.63Professional Charges 19.62 5.94Others 0.06

G Earnings in Foreign CurrencyF.O.B. Value of Exports 4032.46 2203.03

b) Following adjustments have been carried out in respect of assets and liabilities of erstwhile AGCL

Rs lac Rs lac

Assets (other than Fixed Assets and Investments) taken over at book value 45073.95

Fixed Assets and Investments taken at Fair Value 41415.13

Total Assets as recorded in the books of the Company 86489.08

Less : Book value of Liabilities as on 31.03.2006 23074.66

Excess of Assets over liabilities taken over by the Company (a) 63414.42


Rs lac Rs lac

Debit Balance in Profit and Loss Account as on 31.03.2006 23977.55Less : Capital Reserve 5046.30Balance of Loss adjusted from (a) above (b) 18931.25Net Balance after adjustment as above (a – b) 44483.17Less: Issue of Equity Shares (Share Suspense Account) 642.43

Securities Premium Account vested 12449.54 13091.97Balance Transferred to General Reserve of the Company 31391.21



c) (i) Out of 149901400 Equity Shares held in erstwhile AGCL 74950700 equity shares were cancelled as provided in the schemeand carrying cost of such shares amounting to Rs 7.55 lac has been adjusted against the General Reserve of the Company.

(ii) The erstwhile AGCL had carried on all its businesses and activities for the benefit of and in trust for, the Company from 1stApril 2006. Thus the Profit or Income accruing or arising to erstwhile AGCL, or expenditure or losses arising or incurred byit from 1st April 2006 are treated as expenditure or loss, as the case may be of the Company.

The losses of the erstwhile AGCL for the year ended 31st March 2007 have been deducted from the General Reserve ofthe Company. Current year’s transactions of the erstwhile AGCL have duly been incorporated in the current year under therespective heads of accounts of the Company.

d) 6424345 number of Equity Shares of Rs 10 each of the Company relating to the Equity Share Capital of the erstwhile AGCLas on 01.04.2006 have been issued 1(one) equity share as fully paid up against 35 fully paid Equity Shares held by the membersof the erstwhile AGCL. The face value of such shares issued subsequent to the Balance Sheet date have been shown asShare Capital Suspense.

e) 2141448 numbers of Equity Shares to be issued by the Company in lieu of 74950700 number of Shares held by the Companyin the erstwhile AGCL, will be transferred to a trust for the sole benefit of the Company. Accordingly, the cost of the aforesaidinvestments of the Company has been included in “ Beneficial Interest in Shares held by HNG Trust” under “Investments”.

f) i) 1368872 numbers of Shares of the Company held by the erstwhile AGCL have been transferred to a trust for the benefitof the Company. Accordingly, Rs 6009.35 lac being the fair value of the aforesaid shares have been included in “BeneficialInterest in Shares held by Ace Trust” under “Investments”.

ii) Pursuant to the sanctioned scheme Rs 31391.21 lac has been transferred to General Reserve. The said amount as pergenerally accepted accounting practices would otherwise had been added to the Capital Reserve.

iii) In view of the aforesaid amalgamation with effect from 01.04.2006, the figures for the previous year are not comparablewith figures for the Current Year.

iv) In terms of the Scheme, Rs 83.19 lac being expenses attributable to the implementation of the Scheme incurred by theCompany have been adjusted against the General Reserve of the Company.

33. Figures are expressed in Rupees lac and have been rounded off to the nearest thousand.

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

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




H. K. Verma



June 25, 2008


Signature to Schedule ‘A’ to ‘S’




H. K. Verma



June 25, 2008

Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956Balance Sheet Abstract and the Company’s General Business Profile

2 1 - 1 3 2 9 4

3 1 0 3

Registration No. State Code

Balance Sheet Date

I. Registration Details

II. Capital Raised during the year (amount in Rs ’000)

III. Position of Mobilisation and Deployment of Funds (amount in Rs ’000)

2 0 0 8

2 1

Total Assets

Private Placement

N I L

Sources of Funds

Application of Funds

Reserves and Surplus

IV. Performance of the Company (amount in Rs ’000)

Item Code No. (ITC code) Product descriptions

V. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)

Rights Issue

N I L

Bonus Issue

N I L

Public Issue

N I L

1 4 8 8 8 2 4 4

Total Liabilities

1 4 8 8 8 2 4 4

8 4 6 1 2 5 5

Unsecured Loans

1 3 1 2 7 6 1

Paid–up Capital

1 7 4 6 7 7

Secured Loans

2 8 7 4 2 9 6


1 8 0 7 5 2

Net Fixed Assets

8 9 2 2 5 3 8Net Current Assets

2 9 3 5 3 5 3

Accumulated Loss

N I L

Net Income

1 0 2 8 1 8 7 9

Earnings per Share in Rs

9 1. 7 9

7 0 1 0 9 0 - 0 1

Total Expenditure

9 0 7 1 1 3 1

Dividend %

4 0 . 0 0

Profit / Loss Before Tax

1 2 1 0 7 4 8

Profit / Loss After Tax

1 6 0 3 3 8 9

G L A S S B O T T L E S

Investments

1 1 4 5 8 5 0Miscellaneous Expenditure

N I L


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.


Statement Regarding Subsidiary Companies Pursuant to Section 212 ofCompanies Act, 1956

1. Name of the Subsidiary Company Glass Equipment (India) Ltd. Quality Minerals Ltd.

2. The Financial Year of the Subsidiary Company. Year ended on Year ended on

31st March, 2008 31st March, 2008

3. Holding Company’s interest Entire Subscribed Capital 9,384 Equity Shares of Rs 100/-

comprising of 26,400 each out of the Subscribed and

Equity Shares of paid up Capital of 9,410 Equity

Rs 100/- each. Shares of Rs 100/-each.

4 Extent of holding 100% 99.72%

5 Net Profit of the subsidiary Rs 12656304/- Rs 1052548/-

6 For the financial year of the Subsidiary

A] Profits/(Losses) so far as it concerns the Rs 12656304/- Rs 1049601/-

members of the holding company and

not dealt with in the holding company’s

accounts.

B] Profits/(Losses) so far as it concerns the Rs 2640000/- Nil

members of the holding company and

dealt with in the holding company’s accounts.

7 For previous financial years since it

becomes a subsidiary.

A] Profits/(Losses) so far as it concerns the Rs 124498262/- Rs 11314004/-

members of the holding company and not

dealt with in the holding company’s accounts.

B] Profits/(Losses) so far as it concerns the Rs 4974263/- Nil

members of the holding company and dealt

with in the holding company’s accounts.

Mukul Somany Sanjay Somany

Jt. Managing Director Managing Director

Kolkata Priya Ranjan Ram Raj Soni

June 25, 2008 Company Secretary Chief Financial Officer

Glass Equipment (India) Limited | 85

Directors’ ReportTo the Members

Your Directors have the pleasure to place before you the Thirty

Eighth Annual Report together with Audited Accounts of the

Company, for the year ended 31st March, 2008.

Financial Performance Rupees

2008 2007

Total Income 17,84,32,363 12,11,23,492

Profit before Interest,

Depreciation & Tax 3,48,79,803 2,05,12,271

Less : Interest 25,02,550 39,54,550

Gross Profit 3,23,77,253 1,65,57,721

Less : Depreciation 84,10,910 88,01,093

Taxation 93,20,000 56,07,000

Fringe Benefit Tax 1,29,000 1,24,000

Profit before Exceptional Items 1,45,17,343 20,25,628

Add : Exceptional Items (Net) (7,44,179) (1,11,437)

Profit after Exceptional Items 1,37,73,164 19,14,191

Add: Deferred Tax Assets

Created (Net) 19,71,808 26,99,446

Taxation adjustment of

previous years (Net) -- 243

Balance brought forward

from last year 68,32,525 62,49,532

2,25,77,497 1,08,63,412

Less: Provision for Proposed

Dividend 26,40,000 26,400

Tax on Proposed Dividend 4,48,668 4,487

Transfer to General Reserve 1,50,00,000 40,00,000

Balance Carried over 44,88,829 68,32,525

Working ReviewThe Net Sales of the Company was higher at Rs 1790.93 lac as

against Rs 1187.86 lac in the previous year. Your Directors are

optimistic about current year’s performance.

DividendYour Board of Directors recommend payment of Dividend @

Rs 100/- per share on 26,400 Equity Shares of Rs 100/- each for

the Financial Year 2007-2008.

DirectorsShri D.K. Kapoor and Shri A.C. Jain have resigned from the

Directorship of the Company with effect from 19/05/2008. The

Board places on its record appreciation for the valuable services

rendered by them during their association with the Company.

Shri Mukul Somany and Shri Sanjay Somany retire by rotation

and being eligible, offer themselves for re-appointment.

Compliance CertificateIn accordance with Section 383A of the Companies Act, 1956,

and Companies (Compliance Certificate) Rules, 2001, the

Company has obtained a certificate from a Secretary in whole

time practice confirming that the Company has complied with all

the provisions of the Companies Act, 1956 and a copy of such

certificate is annexed to this Report.

AuditorsThe Auditors Messers Krishan Somani & Associates, Chartered

Accountants, retire at the ensuing Annual General Meeting and

are eligible for re-appointment.

Auditors’ ReportThe Notes on Accounts, as referred to in the Auditors Report are

self explanatory and, therefore, do not call for any further

comments.

Particulars Of Employees:Statement of particulars of employees pursuant to section

217(2A) of the Companies Act, 1956, read with Companies

(Particulars of Employees) Rules, 1975 and forming part of

Directors’ Report for the year ended 31st March, 2008 is given in

the Annexure to the Report.

Industrial RelationsIndustrial relations within the Company remained cordial.

86 | Glass Equipment (India) Limited

Particulars required Under Section 217(1)(e) ofthe Companies Act, 1956

A. CONSERVATION OF ENERGY:

a) Energy conservation measures taken: -

The Company continues to give high priority to energy

conservation.

The following significant measures have been taken: -

i) Periodical and preventive maintenance of electrical

equipment to ensure optimum utilisation of electric

energy.

ii) Phased balancing of machines and lighting load.

iii) Maintaining the power factor by installing the required

capacitors.

b) Additional investments and proposals: -

Further energy conservation is planned through

replacement of inefficient equipment and by providing

automatic controls to reduce idle running of equipment.

c) Impact of measures at (a) and (b) for reduction of

energy consumption and consequent impact on cost

of production of goods: The energy conservation

measures have a nominal favourable impact on the cost

of the products.

d) Total energy consumption and energy consumption

per unit of production as per “Form-A”:

Not given, as the Company is not covered under the list

of specified industries.

B. TECHNICAL ABSORPTION:

a) Research and Development(R&D):

The Company is working on development of Import

substitution. The productivity norms and quality of

components are constantly being monitored for

improvement.

No separate account is maintained by the Company for

the expenditure incurred on R&D. However, the

Company is incurring expenditure towards development

activities.

b) Technology Absorption, Adaptation & Innovation:

The Company has not imported technology during the

last 5 years. The Company is constantly engaged in in-

house development activities.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on foreign exchange earnings and outgo is

contained in Schedule S(16) (D,E, F & G)

Directors’ Responsibility Statement Pursuant toSection 217 (2AA) of the Companies Act, 1956.Your Directors hereby confirm :-

• that the financial statements are prepared in conformity with

the accounting standards issued by the Institute of Chartered

Accountants of India and the requirements of the Companies

Act, 1956, to the extent applicable to the Company ; on the

historical cost convention ; as a going concern and on the

accrual basis. There are no material departure from

prescribed accounting standards in the adoption of the

accounting standards.

• that the directors had selected such accounting policies and

applied them consistently and made judgements and

estimates that are reasonable and prudent so as to give a

true and fair view of the state of affairs of the Company at the

end of the financial year and of the profit or loss of the

Company for that period ;

• that the directors had taken proper and sufficient care for the

maintenance of adequate accounting records in accordance

with the provisions of this Act for safeguarding the assets of

the Company and for preventing and detecting fraud and

other irregularities ;


-sd-

Bahadurgarh C. K. Somany

June 11, 2008. (Chairman)


Directors’ ReportAnnexure to the

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of

Employees) Rules, 1975 and forming part of the Directors’ Report for the Company’s financial year ending 31st

March, 2008

a) Employees, who are employed throughout the financial year :-

Name Age in Qualifications Designation/ Commence- Experience Gross Name of

Years Nature of ment of (Years) Remuneration Previous

Duties Employment (Rupees) Employer,

Post held

Sri. C.K. Somany 75 Years I.S.C, FBIM Executive 01/10/2000 55 Years 32,42,635 HNG &(London) Chairman Industries

Limited,Kolkata,

ManagingDirector

Notes:-1) Remuneration as shown above includes Salary, HRA, Company’s contribution to Provident Fund, Provision for Gratuity, LTA and

Medical Expenses reimbursement.2) The above employee is relative of Shri Sanjay Somany, Shri Mukul Somany and Smt. Jaya Kanoria.3) The appointment is on contractual basis.


Compliance CertificateRegistration No. of the Company : 21-65595

Nominal Capital . Rs 4000000/-

To,

The Members,

Glass Equipment (India) Limited,

2, Red Cross Place,

Kolkata - 700001

I have examined the registers, records, books and papers of

Glass Equipment (India) Limited (the Company) as required to

be maintained under the Companies Act, 1956 (the Act) and the

rules made thereunder and also the provisions contained in the

Memorandum and Articles of Association of the Company for the

financial year ended on 31st March, 2008 (financial year). In my

opinion and to the best of my information and according to the

examinations carried out by me and explanations furnished to

me by the Company, its officers and agents, I certify that in

respect of the aforesaid financial year.

1. The Company has kept and maintained all registers as stated

in Annexure À' to this certificate, as per the provisions of the

Act and the rules made thereunder and all the entries therein

have been duly recorded.

2. The Company has duly filed the forms and returns as stated

in Annexure `B' to this certificate, with the Registrar of

Companies, Regional Director, Central Government,

Company Law Board or other authorities within the time

prescribed under the Act and the rules made thereunder

except as otherwise stated.

3. The Company being a public limited company, comments

are not required.

4. The Board of Directors duly met FIVE times respectively on

30.06.2007, 27.07.2007, 06.09.2007, 21.11.2007 and

06.02.2008 in respect of which meetings proper notices were

given and the proceedings were properly recorded and

signed in the Minutes Book maintained for the purpose.

5. The Company has not closed its Register of Members during

the financial year.

6. The Annual General Meeting for the financial year ended on

31st March, 2007 was held on 28th September, 2007, after

giving due notice to the members of the Company and the

resolutions passed there at were duly recorded in Minutes

Book maintained for the purpose.

7. No Extra-ordinary General Meeting was held during the

financial year.

8. The Company has not advanced any loans to its directors or

persons or firms or Companies referred to under Section 295

of the Act.

9. The Company has duly complied with the provisions of

section 297 of the Act in respect of contracts specified in that

section.

10. The Company has made necessary entries in the register

maintained under section 301 of the Act.

11. As there were no instances falling within the purview of

section 314 of the Act, the Company has not obtained any

approvals from the Board of Directors Members or Central

Government.

12. The Company has not issued any duplicate share Certificate

during the financial year.

13. i. There was no allotment/transfer/transmission of securities


ii. The Company has not deposited the amount of dividend

declared in a separate Bank Account as the Company

has issued a Cheque to the holding Company for

dividend on 1st October, 2007 which is within five days

from the date of declaration of such dividend.

iii. The Company has paid dividend to the holding Company

within a period of 30 (Thirty) days from the date of

declaration and therefore it has not transferred any

amount to Unpaid Dividend Account.

iv. There is no amount lying in unpaid dividend account,

application money due for refund and there are no

deposits, debentures etc. as on 31st March, 2008.

v. The Company has duly complied with the requirements

of section 217 of the Act.


14. The Board of Directors is duly constituted. There was no

appointment of directors, additional directors, alternate

directors and directors to fill casual vacancy made during the

year.

15. The Company has not appointed any Managing Directors /

Whole-time Directors / Manager during the financial year.

16. The Company has not appointed any sole selling agents


17. The Company was not required to obtain any approvals of

the Central Government, Company Law Board, Regional

Director, Registrar and/ or such authorities prescribed under

the various provisions of the Act during the Financial year.

18. The Directors have disclosed their interest in the other

firms/companies to the Board of Directors pursuant to the

provisions of the Act and the rules made there under.

19. The Company has not issued any shares, debentures or

other securities during the year.

20. The Company has not bought back any shares during the

financial year.

21. The Company has not issued any Preference Shares or

Debentures.

22. There were no transactions necessitating the Company to

keep in abeyance any rights to dividend, rights shares and

bonus shares pending registration of transfer of shares.

23. The Company has not invited/accepted any deposits during

the financial year except some temporary amount borrowed

during the year which has been repaid within the year.

24. The amount borrowed by the Company from directors,

members, public, financial institutions, Banks or other during

the financial year ended 31st March, 2008 are within the limits

prescribed under Section 293(1)(d) of the Act have been

passed in duly convened Annual General Meeting held on

23rd September, 1996.

25. The Company has made loans and investments and given

guarantees to other bodies corporate in compliance with the

provisions of the Act and has made necessary entries in the

register kept for the purpose.

26. The Company has not altered the provisions of the

Memorandum with respect of situation of the Company's

registered office from one state to another during the year

under scrutiny.


Memorandum with respect to the objects of the Company

during the financial year under scrutiny.


Memorandum with respect to name of the Company during

the year under scrutiny.


Memorandum with respect to share capital during the year

under scrutiny.

30. The Company has not altered its Articles of Association


31. I have been informed by the management that there was no

prosecution initiated against or show cause notice received

by the Company and no fines or penalties or any other

punishment was imposed on the Company during the

financial year, for the offences under the Act.

32. The Company has not received any money as security from

its employees during the financial year.

33. The Company has generally deposited both employees' and

employer's contribution to Provident Fund generally in time

with prescribed authorities pursuant to Section 418 of the Act.

Signature

Babu Lal Patni

Place: Kolkata Practicing Company Secretary

Dated : June 11, 2008 C.P.No : 1321


ANNEXURE À'

ANNEXURE `B'

LIST OF REGISTERS MAINTAINED BY THE COMPANY

Forms and Returns as filed by the Company with Registrar of Companies Regional Director, Central Government

or other authorities during the financial year ended 31st March, 2008.

S.N. Form No./Return Filed Under For Date of Whether If delay in

Section filing filed within filing whether

prescribed requisite

Time additional fee paid

YES/NO YES/NO

01. Form No 23AC 220 Balance Sheet as at 09.10.07 YES N.A.

31.03.2007

02. Form No 66 Proviso to Section Compliance Certificate 09.10.07 YES N.A.

383A (1)

03. Form No 20B 159 Annual Return made upto 19.11.07 YES N.A.

28.09.07

S.N Particulars Under Section

01. Register of Charges 143

02. Register of Members 150

03. Index of Members 151

04. Directors' Minute Book 193

05. Shareholders' Minute Book 193

06. Register of Contracts (Part I) 301

07. Register of Contracts (Part II) 301

08. Register of Directors 303

09. Register of Directors Shareholdings 307

10. Register of Investments 372A

11. Register of Allotment.

12. Register of Transfer.


Auditors’ Report To the Members of

Glass Equipment (India) Limited

1. We have audited the attached Balance Sheet of GLASS

EQUIPMENT (INDIA) LIMITED, as at 31st March, 2008, the

Profit and Loss Account and also the Cash Flow Statement

of the Company for the year ended on that date annexed

thereto. These financial statements are the responsibility of

the Company’s management. Our responsibility is to express

an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing

standards generally accepted in India. Those Standards

require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements

are free of material misstatement. An audit includes

examining, on a test basis, evidence supporting the amounts

and disclosures in the financial statements. An audit also

includes assessing the accounting principles used and

significant estimates made by management, as well as

evaluating the overall financial statement presentation. We

believe that our audit provides a reasonable basis for our

opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003

as amended to-date, issued by the Central Government in

terms of Section 227 (4A) of the Companies Act, 1956, we

enclose in the Annexure a statement on the matters specified

in paragraph 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to above,

we report that:

a) We have obtained all the information and explanations,



b) In our opinion, proper books of accounts as required by

law, have been kept by the Company so far as appears

from our examination of such books.

c) The Balance Sheet and Profit & Loss Account dealt with

by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet and the Profit and Loss

Account dealt with by this report comply with the

Accounting Standards referred to in sub-section (3C) of

Section 211 of the Companies Act, 1956 to the extent

applicable.

e) On the basis of the written representations received from

the Directors of the Company as at 31st March, 2008,

and taken on record by the Board of Directors, we report

that none of Directors is disqualified from being

appointed as a Director of the Company under clause (g)

of sub-section (1) of section 274 of the Companies Act,

1956.

f) In our opinion, and to the best of our information and

according to the explanations given to us, the said

accounts subject to note no 8 regarding change in

method of providing liability of leave salary and note no

9 regarding revaluation of plant and machinery and read

together with other notes thereon, give the information

required by the Companies Act, 1956, in the manner so

required and give a true and fair view in conformity with

the accounting principles generally accepted in India :-

i) In the case of the Balance Sheet, of the state of affairs

of the Company as at 31st March, 2008 and

ii) In the case of the Profit & Loss Account, of the

PROFIT of the Company for the year ended on that

date.

iii) In the case of the Cash Flow Statement, of the Cash

Flows for the Year ended on that date.

For Krishan Somani & Associates

Chartered Accountants,

-Sd-

(Krishan Somani)

Place : Delhi, Proprietor

Date : June 11, 2008 Membership No : 089879


Annexure to the Auditors’ Report(Referred to in paragraph (3) of our report of even date on the statement of accounts of Messrs. GLASS EQUIPMENT(INDIA) LIMITED for the year ended 31st March, 2008.)

1. a) The Company has maintained proper records showing

full particulars, including quantitative details and

situation of fixed assets.

b) The fixed assets have been physically verified by the

management during the year. In our opinion, the

frequency of verification is reasonable having regard to

the size of the Company and the nature of its assets.

The discrepancies reported on such verification were

not material and have been properly dealt with in the

books of account.

c) In our opinion, the disposals of fixed assets during the

year does not affect the going concern assumption.

2. a) The management has conducted the physical

verification of inventory at reasonable intervals, except

for inventories lying with outside parties, which have,

however, been confirmed by them.

b) In our opinion, the procedure followed by the

management for such physical verification are

reasonable and adequate in relation to the size of the

Company and nature of its business.

c) The Company is maintaining proper records of

inventory. The discrepancies noticed on verification

between physical inventories and the book records

were not material in relation to the operation of the

Company and the same have been properly dealt with

in the books of account.

3. a) The Company has granted an unsecured loan to One

Body corporate covered in the register maintained

under Section 301 of the Companies Act, 1956. The

maximum balance outstanding during the year was

Rs 516.51 lacs and the amount was repayable on

demand.

b) In our opinion, the rate of interest and other terms and

conditions of the loan given by the Company, are prima

facie not prejudicial to the interest of the Company.

c) The payment of principal amount and interest was

regular.

d) There are no overdue amounts of more than rupees one

lakh.

e) The Company had taken an unsecured loan from a

Company listed in the register maintained under

Section 301 of the Companies Act, 1956. The maximum

balance outstanding during the year was Rs 70.29 lacs

and the amount was repayable on demand.

f) In our opinion, the rate of interest and other terms and

conditions of the loan taken by the Company, are prima

facie not prejudicial to the interest of the Company.

g) The repayment of principal amount and interest was

regular.

4. In our opinion and according to the information and

explanations given to us, there are adequate internal control

procedures commensurate with the size of the Company

and the nature of its business for the purchase of inventory

and fixed assets and for the sale of goods and services.

During the course of our audit no major weakness has been

observed in the internal controls.

5. a) Based on the audit procedures applied by us and

according to the information, explanations and

representations given to us, we are of the opinion that

all transactions that need to be entered into the register

in pursuance of Section 301 of the Companies Act,

have been so entered.

b) Based on the information and explanations given to us,

it is our opinion that the transactions exceeding the

value of Rs Five Lakhs in respect of any party during

the year have been made at a prices which are prima

facie, reasonable, having regard to the prevailing

market prices at the relevant time where such prices are

available.


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.

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.


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.


Chartered Accountants,

-Sd-

(Krishan Somani)

Place : Delhi, Proprietor

Date : June 11, 2008 Membership No : 089879


As per our report attached



-sd- -sd- -sd-

Krishan Somani Sanjay Somany C.K.Somany

Proprietor Director Chairman

417, Laxmi Tower, Commercial Complex,

Azadpur, Delhi – 110033

June 1, 2008

Balance Sheet As at 31st March, 2008Amount in Rupees


SOURCES OF FUNDS

Shareholders' Funds

Share Capital A 26,40,000 26.40,000

Reserves & Surplus B 19,21,24,582 12,94,72,525

19,47,64,582 13,21,12,525

Loan Funds

Secured Loans C 2,14,74,337 2,95,29,207

Un-secured Loans D 65,00,000 70,29,347

2,79,74,337 3,65,58,554

Deferred Tax Liability (Net) 37,19,789 56,91,597

Refer Note – 12 of Schedule ‘S’

Total 22,64,58,708 17,43,62,676


Fixed Assets

Gross Block E 20,41,35,292 15,33,02,720

Less : Depreciation 11,65,79,286 11,04,87,907

Net Block 8,75,56,006 4,28,14,813

Investments F – –

Current Assets, Loans & Advances

Inventories G 9,93,48,598 8,65,85,411

Sundry Debtors H 6,65,22,013 81,10,910

Cash & Bank Balances I 10,50,047 1,64,891

Loans & Advances J 44,43,990 6,12,00,770

17,13,64,648 15,60,61,982

Less: Current Liabilities & Provisions

Liabilities K 2,00,19,892 1,66,34,281

Provisions L 1,24,42,054 78,79,838

3,24,61,946 2,45,14,119

Net Current Assets 13,89,02,702 13,15,47,863

Total 22,64,58,708 17,43,62,676

Notes S





-sd- -sd- -sd-





June 11, 2008


SCHEDULES 2007-2008 2006-2007

INCOME

Sales & Services (Gross) M 20,41,14,416 13,64,10,623

Less: Excise Duty recovered on Sales 2,50,21,303 1,76,24,276

Sales & Services (Net) 17,90,93,113 11,87,86,347

Interest N 10,68,639 58,09,077

Other Income O 18,41,888 8,32,298

Increase / (Decrease) in stocks R (35,71,277) (43,04,230)

17,84,32,363 12,11,23,492

EXPENDITURE

Manufacturing, Administrative and Other Expenses P 14,35,52,560 10,06,11,221

Interest N 25,02,550 39,54,550

Depreciation E 84,10,910 88,01,093

15,44,66,020 11,33,66,864

Profit before Tax and Exceptional items 2,39,66,343 77,56,628

Less / Add: Exceptional items

- Prior Period adjustments (Net) 3,02,538 –

- Fixed Assets written off/ loss on sale of assets (10,46,717) (1,11,437)

Profit before Tax 2,32,22,164 76,45,191

Less: Provision for Taxation 93,20,000 56,07,000

Less: Provision for Fringe Benefit Tax 1,29,000 1,24,000

Profit after Tax 1,37,73,164 19,14,191

Less / Add: Deferred Tax Assets / Liabilities Created (Net) 19,71,808 26,99,446

Less / Add: Taxation adjustments of previous years (Net) – 243

1,57,44,972 46,13,880

Add: Balance brought forward from last year 68,32,525 62,49,532

Balance Available for Appropriation 2,25,77,497 1,08,63,412

Less: Provision for Proposed Dividend 26,40,000 26,400

Less: Tax Payable on Proposed Dividend 4,48,668 4,487

Less: Transfer to General Reserve 1,50,00,000 40,00,000

Balance Carried to Balance Sheet 44,88,829 68,32,525

Basic / Diluted earning per share

(Refer Note – 11 of Schedule ‘S’) 596 175

Notes S

Amount in Rupees


Cash Flow Statement For the year ended 31st March, 2008Amount in Rupees

2007-2008 2006-2007

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 2,32,22,164 76,45,191

Adjustments for:

Depreciation 84,10,910 88,01,093

Interest (Net) 14,33,911 (18,54,527)

Fixed Assets written back / loss on sale of Fixed Assets 10,46,717 1,11,437

Profit on Sale of Fixed Assets / Investment (36,442) --

Operating Profit before working capital changes 3,40,77,260 1,47,03,194

Adjustments for:

Loans and Advances 5,67,56,780 (5,16,53,417)

Trade receivables (5,84,11,103) 4,21,63,171

Inventories (1,27,63,187) (71,55,611)

Trade and other payables 79,47,827 81,71,208

Cash generated from operations 2,76,07,577 62,28,545

Direct Taxes paid (94,49,000) (57,30,757)

Net Cash from Operating activities 1,81,58,577 4,97,788

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (50,36,625) (65,39,695)

Sale of Fixed Assets 8,70,000 63,000

Interest received 10,68,639 58,09,077

Net Cash used in Investing Activities (30,97,986) (6,67,618)

C. CASH FLOW FROM FINANCING ACTIVITIES

(Repayment) / Proceeds from Long term borrowings (Net) (85,84,217) 20,50,279

Dividend Paid (26,40,000) (26,400)

Corporate Dividend Tax (4,48,668) (4,487)

Interest paid (25,02,550) (39,54,550)

Net Cash from Financing Activities (1,41,75,435) (19,35,158)

NET CHANGES IN CASH AND CASH EQUIVALENTS 8,85,156 (21,04,988)

CASH AND CASH EQUIVALENTS – OPENING BALANCE 1,64,891 22,69,879

CASH AND CASH EQUIVALENTS – CLOSING BALANCE 10,50,047 1,64,891

(represents Cash in hand and Bank balances)




-sd- -sd- -sd-





June 11, 2008




As at 31.03.2008 As at 31.03.2007

Authorised

40,000 Equity Shares of Rs 100 each 40,00,000 40,00,000

Issued, Subscribed & Paid Up

26,400 Equity Shares of Rs 100 each fully paid up & held by the holding company,

Hindusthan National Glass & Industries Limited and its nominees.

(Of the above, 1500 Equity Shares of Rs 100 each have

been issued for consideration other than cash). 26,40,000 26,40,000

Amount in Rupees


Share Premium Account 26,40,000 26,40,000

General Reserve

As per last Balance Sheet 12,00,00,000

Add : Transferred from Profit & Loss Account 1,50,00,000 13,50,00,000 12,00,00,000

Revaluation Reserve 4,99,95,753 -

Profit & Loss Account

As per Annexed Account 44,88,829 68,32,525

19,21,24,582 12,94,72,525


From Banks:

a) Cash Credits : Secured by hypothecation of stock of finished goods,

semi-finished goods, raw materials, stores and spares including packing

material, book debts, other current assets, entire plant & machinery and

other fixed assets and guaranteed by the holding company. 2,14,74,337 2,93,28,956

b) Car Loan : Secured by way of first charge on the Vehicle (s) financed

(Installment due within one year Rs Nil, Previous year Rs 2,00,251) - 2,00,251

2,14,74,337 2,95,29,207


From a Corporate Associate 65,00,000 70,29,347

65,00,000 70,29,347



Schedule - F I INVESTMENTS (at cost)

As at 31.03.2008 As at 31.03.2007

(Unquoted – in fully paid shares) – Other than Trade

• 47,100 equity shares of Rs 10 each in Hasow Automation Ltd. 4,73,355

Less :- Provision for diminution in value of investment 4,73,355 - -

- -

Amount in Rupees

Schedule - E I FIXED ASSETSSchedule - E I FIXED ASSETSGROSS BLOCK DEPRECIATION NET BLOCK

Particulars As at Addition Reval. Adj. Sales or As at Up to For the Written Upto As at As at

01/04/07 During the As on Adjustment 31/03/08 31/03/07 Year Back 31/03/08 31/03/08 31/03/07

Year 31/03/08

Building 4,52,350 -- -- 4,52,350 -- 1,10,601 5,535 1,16,136 -- -- 3,41,749

Plant & Machinery 14,33,64,850 19,16,858 4,99,95,753 -- 19,52,77,461 10,67,07,598 72,06,600 -- 11,39,14,198 8,13,63,263 3,66,57,252

Computer Software 55,24,427 15,38,967 -- 29,84,529 40,78,865 22,39,979 9,14,400 19,37,812 12,16,567 28,62,298 32,84,448

Technical Know How 1,40,000 -- -- -- 1,40,000 1,33,000 -- -- 1,33,000 7,000 7,000

Office & Other Equip. 4,67,881 25,900 -- -- 4,93,781 2,21,511 15,812 -- 2,37,323 2,56,458 2,46,370

Furniture & Fittings 11,19,675 5,859 -- -- 11,25,534 3,62,438 56,699 -- 4,19,137 7,06,397 7,57,237

Vehicles 22,33,537 5,09,041 -- 7,62,927 19,79,651 7,12,780 2,11,864 2,65,583 6,59,061 13,20,590 15,20,757

Total 15,33,02,720 39,96,625 4,99,95,753 41,99,806 20,30,95,292 11,04,87,907 84,10,910 23,19,531 11,65,79,286 8,65,16,006 4,28,14,813

Capital Work in Progress -- 10,40,000 -- -- 10,40,000 -- -- -- -- 10,40,000 --

Total 15,33,02,720 50,36,625 4,99,95,753 41,99,806 20,41,35,292 11,04,87,907 84,10,910 23,19,531 11,65,79,286 8,75,56,006 4,28,14,813

Previous Year 14,72,65,764 65,39,695 -- 5,02,739 15,33,02,720 10,20,15,116 88,01,093 3,28,302 11,04,87,907 4,28,14,813

Amount in Rupees

Schedule - G I INVENTORIES

(As taken, valued & certified by the Management)

Finished Goods 1,43,17,069 1,64,02,021

Work-in-Process 1,36,61,072 1,51,47,397

Raw Materials & Components (including in transit Rs Nil, Previous year Rs 1,074.) 6,83,96,161 5,23,06,836

Stores & Spares 29,74,296 27,29,157

9,93,48,598 8,65,85,411

Schedule - H I SUNDRY DEBTORS

(Unsecured, considered good)

Debts outstanding for a period exceeding six months 64,611 64,611

Other debts 6,64,57,402 80,46,299

6,65,22,013 81,10,910



Schedule - I I CASH & BANK BALANCES

As at 31.03.2008 As at 31.03.2007

Cash in Hand 59,095 98,599

Balance in Post Office Saving Bank Account 1,000 1,000

(Pass Book pledged with Central Excise Department)

Balance with Scheduled Banks :

• In Current Account (Including Cheques in Hand Rs Nil, Previous year Rs Nil) 9,29,952 65,292

• In Short Term Deposits 60,000 -

10,50,047 1,64,891

Amount in Rupees

Schedule - J I LOANS & ADVANCES

(Unsecured, considered good, unless otherwise specified)

LOANS

ICD given -- 5,16,50,920

ADVANCES

Advances recoverable in cash or in kind or for value to be received 23,30,935 34,36,843

Balance in Current Account with Central Excise (Net) 5,02,419 6,02,501

Advance Payment of Income Tax

(Net of provision Rs 3,15,71,000, Previous year Rs 2,22,51,000) 8,15,305 47,13,325

Advance Payment of Fringe Benefit Tax

(Net of Provision Rs 3,85,730, Previous year Rs 2,56,730) 22,541 24,391

Deposits with Government Departments 7,66,790 7,66,790

Other Deposits 6,000 6,000

44,43,990 6,12,00,770


Sundry Creditors 1,41,00,095 1,12,78,673

Other Liabilities 57,87,680 51,02,532

Temporary Bank Overdraft 1,32,117 2,53,076

2,00,19,892 1,66,34,281

Opening Addition Deletion 31.03.2008 31.03.2007

Bonus 22,34,733 26,12,844 22,34,733 26,12,844 22,34,733

Gratuity 48,29,711 15,78,503 2,14,154 61,94,060 48,29,711

Leave 7,84,507 64,513 3,02,538 5,46,482 7,84,507

Proposed Dividend 26,400 26,40,000 26,400 26,40,000 26,400

Tax on Proposed Dividend 4,487 4,48,668 4,487 4,48,668 4,487

1,24,42,054 78,79,838




Schedule - M I SALES & SERVICES

2007-2008 2006-2007

Sales of I.S. Machines & Spare Parts (Gross)• Domestic 19,75,92,252 13,23,65,355• Export 22,44,319 22,02,808Service Revenue (Tax deducted at source Rs 1,08,632, previous year Rs 46,306) 42,77,845 18,42,460

20,41,14,416 13,64,10,623

Amount in Rupees

Schedule - N I INTERESTReceived (Gross)

On Bank Deposits (Tax deducted at source Rs 1,795) 19,181 4,697From Others (Tax deducted at source Rs 2,26,200, pervious year Rs 12,87,760.) 10,49,458 58,04,380

10,68,639 58,09,077Paid

To Bankers & Others 25,02,550 39,54,55025,02,550 39,54,550

Schedule - O I OTHER INCOMEProfit on sale of fixed assets 36,442 –Liabilities no longer required, written back 1,46,478 70,349Miscellaneous Receipts 16,58,968 7,61,949

18,41,888 8,32,298

Schedule - P I MANUFACTURING, ADMINISTRATIVE & OTHER EXPENSES

Purchases of Products for resale 1,79,42,810 92,57,032Raw Materials & Components consumed – Schedule ‘Q’ 6,72,36,653 4,84,60,777Stores & Spares consumed 1,40,63,376 95,41,625Power Charges 12,64,333 12,14,660Salaries, Wages, Gratuity & Bonus 2,42,24,539 2,07,85,351Contribution to Employees Provident Fund, Family Pension & Other Funds 18,24,991 15,04,921Workmen & Staff Welfare Expenses 18,77,255 14,53,521Excise Duty Provided on Stocks (80,361) 7,74,805Rates & Taxes 1,01,973 76,909Insurance 2,77,410 5,35,818Hire Charges 16,00,000 16,00,000Miscellaneous Expenses 92,97,339 28,76,102Repairs :Plant & Machinery 5,15,306 5,21,790Others 1,19,821 1,98,970Payment to Auditors :Audit Fee 31,000 31,000Tax Audit Fee 10,000 10,000Other Services – 10,900Reimbursement of Expenses 2,280 12,840

Directors’ Remuneration 32,43,835 17,44,20014,35,52,560 10,06,11,221



Schedule - Q I RAW MATERIALS & COMPONENTS CONSUMED

Schedule - S I NOTES

2007-2008 2006-2007

Opening Stock 5,23,06,836 4,10,20,969Add : Purchases 7,00,77,487 5,09,50,946

Processing Charges 1,32,48,491 87,95,69813,56,32,814 10,07,67,613

Less : Closing Stock 6,83,96,161 5,23,06,8366,72,36,653 4,84,60,777

Amount in Rupees

Schedule - R I DECREASE / INCREASE IN STOCKOpening Stocks :Finished Goods 1,64,02,021 1,32,56,532Work-in-Process 1,51,47,397 2,25,97,116

3,15,49,418 3,58,53,648Less : Closing Stocks :Finished Goods 1,43,17,069 1,64,02,021Work-in-Process 1,36,61,072 1,51,47,397

2,79,78,141 3,15,49,418Decrease / Increase in Stocks (+)35,71,277 (+) 43,04,230

1. Statement on Accounting Polices

I) Accounting Convention

The Company prepares its accounts under the historical cost convention, except for certain fixed assets which are revalued on

accrual basis, except otherwise stated in accordance with normally accepted accounting principles and applicable Accounting

Standards in India.

II) Fixed Assets

Fixed Assets are shown at cost of acquisition (net of MODVAT credit w.e.f. 01/04/96) or cost of construction or at revalued amount

where such assets have been revalued less depreciation.

All expenses including interest on funds borrowed specifically for the acquisition, construction and Commissioning of new assets

/ projects are capitalised up to the date of putting the assets to use.

Expenditure related to and incurred during implementation of new / expansion or modernisation project is included under capital

work in process.

VIII) Impairment

Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,

recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assets

either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater

of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets

are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the

recoverable amount and such loss either no longer exists or has decreased. Impairment loss / reversal thereof is adjusted to the

carrying value or the respective assets, which in case of CGU, are allocated to its assets on a prorate basis.



Schedule - S I NOTES (Contd.)

IV) Depreciation

Tangible Assets

i) Depreciation on tangible assets is provided on Straight Line Method (SLM) at the rates and in the manner prescribed in Schedule

XIV to the Companies Act, 1956.

ii) Depreciation on increase in value of fixed assets due to revaluation is provided on the basis of remaining useful life on Straight

Line Method (SLM) and is transferred from Revaluation Reserve to Profit and Loss Account.

Intangible Assets

i) Intangible Assets :- 95% value of the Computer Software and Technical Know How is amortised. Computer Software is amortised

by 16.21% per year.

V) Investments

Long Term Investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary in the

value.

VI) Inventories

Finished Goods and Work-in-process are valued at lower of cost or net realisable value. Cost for own Manufactured goods

comprise of materials, labour and other appropriate overheads and is calculated on the basis which is appropriate to the business

carried on by the Company.

Raw materials, components, stores and spares are valued at lower of cost or net realisable value. Cost of inventory is arrived at

on Weighted Average Method.

Scrap and unserviceable and obsolete stocks are valued at estimated realisable value.

Excise duty is considered as an element of cost.

VII) Foreign Currency Transactions

Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign

currency monetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon

and also on the exchange differences on settlement of the foreign currency transaction during the year are recognised as income

or expenses and are adjusted to the profit and loss account or capitalised as the case may be.

VIII) Revenue Recognition

a) Revenue from sale of goods and services is recognised upon passage of title and rendering of services to the customers

which generally coincides with delivery.

b) Insurance and other claims to the extent considered recoverable are accounted for in the year of claim. However, claims and

refunds whose recovery can not be ascertained with reasonable certainty are accounted for on acceptance / actual receipt

basis.

c) Sales are inclusive of Excise Duty less Return / Shortage / Rebates, if any and net of Sales Tax.

IX) Employee Benefits (see note – 8)

Liabilities in respect of employee benefits are provided for as follows :-

A) Deferred Benefit Plans

Leave salary of employees on the basis of actuarial valuation by adopting Unit Credit Method as at the year end. Gratuity

Liability is provided for as per actuarial valuation by adopting Projected Unit Credit Method at the year end. This scheme is

maintained and administered by an Insurer to which the trustees make periodic contributions.

B) Deferred Contribution Plans

Provident Fund and ESI on the basis of actual liability accrued and paid to trust/authority.

C) Actuarial gain / losses, if any, are immediately recognised in the profit and loss account.


X) Borrowing Costs

Borrowing cost that are attributable to the acquisition / construction of fixed assets are capitalised as part of the cost of respective

assets. Other borrowing costs are recognised as an expense in the year in which they are incurred.

XI) Earning per Share (EPS)

The earnings considered in ascertaining the Company’s EPS comprises the net profit after tax (and includes the post tax effect

of any extra ordinary items). The number of shares used in computing basic EPS is weighted average number of shares

outstanding during the year.

XII) Taxation

Tax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the year.

A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A

provision is made for deferred tax for all timing differences arising between taxable income and accounting income at currently

enacted tax rates.

Deferred tax assets are recognised only if there is virtual certainty that they will be realised and are reviewed for the

appropriateness of their respective carrying values at each balance sheet date.

XIII) Provision, Contingent Liabilities and Contingent Assets

i) The preparation of financial Statements require management to make estimates and assumption that affect the reported

amount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and

the reported amounts of income and expenses during the year. Difference between the actual results and the estimates are

recognised in the year in which the results are known / materialised.

ii) Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as

a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised

nor disclosed in the financial statements.



2. Contingent Liabilities not provided for in respect of :

2007-2008 2006-2007

a) Income Tax demand against which company has preferred an appeal 5,87,260 7,22,722b) Surety given to sales tax department on behalf of :

– Hasow Automation Limited. 75,000 75,000– Holding Company, Hindusthan National Glass & Inds. Ltd. 50,00,000 50,00,000

c) Bonds executed in favour of Central Excise Department 1,000 1,000d) Pending Capital Orders 9,49,296 5,60,398

– Advance Given 6,05,354 –e) Corporate Guarantee given on behalf of Somany Foam Limited 32,35,00,000 32,35,00,000

Amount in Rupees

4. Sundry Debtors include :

- Due from holding company, Hindusthan National Glass & Industries Limited. 6,58,57,690 52,17,991(Maximum balance: Rs 8,07,72,459)

3. a) Income Tax assessment have been completed up to financial year 2004-2005.Appeals have been preferred against various assessment order and anyliability / refund shall be provided in the year of final determination.

b) Haryana Sales Tax assessment have been completed up to financial year2004-2005.


6. Miscellaneous Expenses include :

a) Directors’ Travelling Expenses 1,54,089 1,59,319

b) Professional Fees 63,36,988 4,16,090

7. a) Directors’ Remuneration include :

i ) Salary 17,25,000 15,00,000

ii) HRA 10,35,000 –

iii) Contribution to Provident Fund & other Funds 2,07,000 1,80,000

iv) Provision for Gratuity 1,28,125 62,500

v) Medical Expenses Reimbursement 1,35,629 –

vi) LTA 11,881 –

vii) Directors’ Fee 1,200 1,700

32,43,835 17,44,200

7. b) Computation of Net Profit under Section 198 read with Section 349of the Companies Act, 1956 and commission payable to Directors :

Net Profit as per Profit & Loss Account 2,32,22,164 76,45,191

Add: Depreciation 84,10,910 88,01,093

Directors’ Remuneration 32,43,835 17,44,200

3,48,76,909 1,81,90,484

Less: Depreciation under Section 350 of the Companies Act, 1956 84,10,910 88,01,093

2,64,65,999 93,89,391

5. Salaries, Wages, Bonus include :

2007-2008 2006-2007

a) Provision for Bonus 26,12,844 22,34,733

b) Gratuity paid 14,57,565 27,02,888

Amount in Rupees5. Salaries, Wages, Bonus include :

2007-2008 2006-2007

a) Provision for Bonus 26,12,844 22,34,733

b) Gratuity paid 14,57,565 27,02,888

Amount in Rupees



8. As per Accounting Standard 15 “Employee Benefits”, the disclosures of employee benefits as defined in the Accounting Standard

are given below :

i) The Company during the year has changed the method of providing liability for leave salary from actual amount payable

against leave due at the year end to actuarial valuation by adopting unit credit method and accordingly excess liability as on

01/04/2007 amounting to Rs 3,02,538/- was written off and credited to profit and loss account as prior period adjustments.

If the leave salary liability provided as per last year method, the profit for the year would be lower by Rs 4,964/- and provisions

would be higher by Rs 3,07,502/-.

ii) The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards)

Rules, 2006, are given below :


Contribution to Defined Contribution Plan, recognised for the year are as under : (Rs in lac)








by the employer needs to be treated as “Defined Benefit Plan”. According to the Management, in consultation to the actuary

it is not practical or feasible to actuarially value the provident liability in the absence any guidance from Actuarial Society of India

and also due to the fact that the rate of interest as notified by the Government can vary annually. Accordingly, the Company

is currently not in a position to provide other related disclosure as required by the aforesaid AS-15 read with ASB guidance.

However, with regard to the position of the fund and confirmation to the trustees of such fund, there is no shortfall as at year

end.


The Employee’s gratuity fund scheme managed by Birla Sun Life Insurance is a defined benefit plan. The present value of

obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period

of service as giving rise to additional unit of employee benefit entitlement and measures is unit separately to build up the final

obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

I) Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances

thereof are as follows :

Rupees in lac

Gratuity Leave Encashment

Funded Unfunded

Liability at beginning of the year 86.12 4.82

Current Service Cost 5.68 2.27

Interest Cost 7.03 4.82

Actuarial (Gain) / Loss -1.11 -4.86

Benefits Paid 6.94 1.58

Liability at the end of the year 90.78 5.47

II) Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:

Rupees in lac

Gratuity (Funded)



Actuarial Gain / (Loss) -6.61


Benefits paid 6.94

Fair value of plan assets at the end of the year 87.56


III) Expense recognised in the Income statement (Under the head “Salaries, Wages, Gratuity & Bonus” – Refer Schedule – P.

Rupees in lac


Funded Unfunded

Current Service Cost 5.68 2.27

Interest Cost 7.03 4.82

Expected Return on Plan Assets 7.02 --

Net Actuarial (Gain) / Loss to be recognised 5.50 -4.86

Expenses recognised in Profit and Loss Account 11.19 2.23




IV) Balance Sheet reconciliation

Rupees in lac


Funded Unfunded

Opening Net Liability (1.66) --

Expenses as above 11.19 2.23

Employers contribution 6.31 --

Amount Recognised in Balance Sheet 3.22 2.23

V) Compensated Absences

The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the

Company as at March 31, 2008 is Rs 5.47 lac.

VI) Principal Actuarial assumptions at the Balance Sheet (Rs in lac)


Funded Unfunded

Mortality Table LICI 1994-1996 LICI 1994-1996

Discount Rate (per annum) 8.50% 8.50% / 7.50%

Expected rate of return on plan assets (per annum) 8.00% –

Rate of escalation in salary (per annum) – 5.00%

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion

and other relevant factors including supply and demand in the employment market. The above information is certified by the

actuary.




9. During the year the plant and machinery as on 31/03/2007 have been revalued by an approved valuer on 31/03/2008 by using

residual replacement value method and the resultant surplus of Rs 4,99,95,753/- arising thereon as compared to net book value

has been transferred to Revaluation Reserve.

No depreciation is provided on increase value of plant and machinery since revaluation is done on 31/03/2008.

10. To the extent information is available with the Company, there is no overdue amount as on 31st March, 2007 to Small Scale

Industries and / or Ancillary Industrial Suppliers on account of principal.

11. Stores and Spares consumption includes partly for repairs and replacement less directly capitalised.

12. Profit and / or Loss on sales of raw materials and stores remains adjusted in consumption.

13. Earning per Share

2007-2008 2006-2007

Net Profit attributable to Shareholders 1,57,44,972 46,13,880

Weighted average number of equity shares 26,400 26,400

Basic earning per share of Rs 100/- each 596 175

The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and diluted earning pershare of the Company are same.

Amount in Rupees




14. Deferred Tax :Break up of deferred tax assets / liabilities and reconciliation of current year deferred tax charge:

Opening Set off ClosingRupees Rupees Rupees


Tax impact of difference between carrying amount of fixed 91,54,044 -18,50,598 73,03,446

assets in the financial statements and income tax return (1,04,35,005) (-12,80,961) (91,54,044)

Total (A) 91,54,044 -18,50,598 73,03,446

(1,04,35,005) (-12,80,961) (91,54,044)

Deferred Tax Assets

Tax impact of difference between valuation of inventories 21,73,995 9,79,462 31,53,457

in the financial statements and income tax return (14,16,732) (7,57,263) (21,73,995)

Tax impact of expenses charged in the financial

statements but allowable as deductions in future

years under income tax :

Expenditure of the nature mentioned in 12,88,452 -8,58,252 4,30,200

Section 43-B of the Income Tax Act, 1961. (6,27,230) (6,61,222) (12,88,452)

Total (B) 34,62,447 1,21,210 35,83,657

(20,43,962) (14,18,485) (34,62,447)

Net Deferred Tax Liability 56,91,597 19,71,808 37,19,789

(83,91,043) (26,99,446) (56,91,597)

15. The Company’s exclusive business is manufacturing and selling of I.S. Glass Forming Machines and its Spares & Accessories and

as such in the opinion of the management this is the only reportable segment, as per Accounting Standard – 17 on Segment

Reporting, issued by the “The Institute of Chartered Accountants of India”.

16. Information pursuant to paragraphs 3 & 4 of Part II of Schedule VI of the Companies Act, 1956.A) Capacity & Actual Production

Class of Goods Units (a) *Licenced Capacity Installed Capacity Actual Production

Glass Manufacturing Machine Nos 10 7 –

(10) (7) (–)

Feeder, Accessories & Spares (b) Nos 15 7 –

(15) (7) (–)

Glass Ceramic Decorating Machines, Nos 12 12 –

Accessories & Spare Parts (12) (12) (-)

Fully Automatic Tile Press Nos 10 10 –

(10) (10) (–)

Tile Loading Equipment Nos 10 10 –

(10) (10) (–)

Tile Sorting & Packing Equipment Nos 15 15 –

(15) (15) (–)

I.S. Machine Conversion Nos 10 10 3

(10) (10) (5)

Bottle Inspection & Packing Machine Nos 10 10 –

(10) (10) (–)




Class of Goods Units (a) *Licenced Capacity Installed Capacity Actual Production

Conveyor, Single Liners, Ware Transfer, Nos 10 10 7

Accessories & Spares (10) (10) (12)

Annealing / Decorating Lehr Nos 5 5 –

(5) (5) (–)

Motor Driven Press & Fire Finishing Machine Nos 5 5 –

(5) (5) (–)

(a) Company has been further permitted to manufacture Filter Presses and Ball Mills (Ceramic Machinery) Worth Rs 30 lac per

annum within its total licenced capacity of 10 Glass Manufacturing Machine and 15 Feeders and Spares and Accessories.

(b) The Industrial Licence covers manufacturing of accessories and spares. Since capacity thereof has not been specified in the

industrial licence, information of installed capacity and actual production are not given.

* As Certified by the management

B) Purchases, Stocks and Sales :

Class of Goods Unit Opening Stock Purchases Closing Stock Sales ***

Qty Value in Qty Value in Qty Value in Qty Value in

(Rupees) (Rupees) (Rupees) (Rupees)

Feeder, Accessories & Spares Nos – – – – – – – –

(–) (–) (–) (–) (–) (–) (–) (–)

I.S. Machine / Conversion Nos – – – – – – 3 4,47,64,564

(–) (–) (–) (–) (–) (–) (5) (5,20,09,962)

Conveyor, Single Liners, Ware Nos – – – – – – 7 83,72,285

Trfr, Accessories & Spares (–) (–) (–) (–) (–) (12) (1,23,78,607)

* * **

Spares & Accessories Nos – 5,19,76,432 – 6,84,66,579 – 6,43,45,924 – 14,66,99,722

(–) (4,03,83,380) (–) (4,54,45,829) (–) (5,19,76,432) (–) (7,01,79,594)

Service Revenue – – – – – – – 42,77,845

(–) (–) (–) (–) (–) (–) (–) (18,42,460)

Others – – – – – – – 5,54,038

(–) (–) (–) (–) (–) (–) (–) (4,66,020)

* Includes cost of spares and accessories Rs 3,62,42,145, (Previous year Rs 2,73,93,374) taken for departmental use.

** Includes finished stock of spares and accessories Rs1,43,17,069, (Previous year Rs 1,64,02,021).

*** Sales are inclusive of Excise Duty

C) Raw Material & Components consumed :

Items Unit Quantity Rupees

Castings Pcs 23,455 73,38,720

(24,122) (63,52,189)

Steels M.Ton 111 1,05,81,190

(101) (59,22,347)

Accessories & Components – – 5,40,11,062

(3,65,92,740)

Note: Consumption is including of Sales Rs 1,78,04,752 (Previous year Rs 92,02,197 ).




D) Value of Raw Materials, Components & Spare Parts consumed (Including Sales)

(As certified by the Management)

2007-2008 2006-2007

Raw Material Spare Raw Material Spare

& Components Parts & Components Parts

Rupees % Rupees % Rupees % Rupees %

Imported 1,28,54,341 18 -- -- 83,99,078 17 -- --

Indigenous 5,90,76,630 82 72,56,211 100 4,04,68,198 83 43,47,972 100

Total 7,19,30,971 100 72,56,211 100 4,88,67,276 100 43,47,972 100

2007-2008 2006-2007

E) CIF Value of Imports– Spares / Components 2,05,08,532 92,31,563

F) Expenditure in Foreign Currency– Travelling 8,270 1,88,891– Trade Promotion -- 1,48,019

G) FOB Value of Export 14,27,639 24,52,749

H) Figures in brackets represent previous year figures.

J) Related Party Disclosure :-Related Party disclosure as identified by the management in accordance with the Accounting Standard 18 issued by theInstitute of Chartered Accountants of India (“ICAI”) and effective from 1st April, 2001.

a) Name of the related parties where control exists – Holding Company

• Hindusthan National Glass & Industries Limited

b) Other related parties and nature of relationship with whom the Company had transactions

• Fellow Subsidiary :-

– Quality Minerals Limited

• Associates

– Ace Glass Containers Limited

– Mould Equipment

• Entities over which Directors and their relatives have influence

– Hasow Automation Limited

– Somany Foam Limited

– Segment Mercantile Pvt. Ltd.

• Directors and Relatives

– Mr C.K.Somany – Chairman

Disclosure of Transactions between The Group & Related parties and status of outstanding balances as on 31st March, 2008.

Amount in Rupees




i) Current Year Rs In lac

Holding Fellow Associates Entities over which Directors andCompany Subsidiary Directors and their their relatives

relatives have influence

INCOME

Sales 1616.42 – 442.74 – –

Sale of Assets – – – – –

Services 4.85 – 43.21 – –

Interest Received – – – 9.98 –

EXPENSES

Purchases 8.90 – – – –

Purchase of Assets – – – – –

Hire Charges 16.00 – – – –

Remuneration – – – – 32.43

Sitting Fees – – – – 0.01

Interest Paid – 6.83 – – –

Dividend Paid 0.26 – – – –

Rendering of Services – – 0.03 – –

Borrowings – 65.00 – – –

ICD Given – – – – –

Investments – – – 4.73 –

Guarantee/Corporate Guarantee :-

- Given 50.00 – – 3235.75 –

- Taken 381.00 – – – –

Out standings :-

- Receivables 658.58 – – – –

- Payables – – – – –

- Dividend Payable 26.40 – – – –




ii) Previous Year Rs In lac

Holding Fellow Associates Entities over which Directors andCompany Subsidiary Directors and their their relatives

relatives have influence

INCOME

Sales 1071.52 – 308.42 – –

Sale of Assets – – – – –

Services 19.15 – 1.53 – –

Interest Received – – – 57.39 –

EXPENSES

Purchases 13.01 – – – –

Purchase of Assets – – – – –

Hire Charges 16.00 – – – –

Remuneration – – – – 17.42

Sitting Fees – – – – 0.02

Interest Paid – 6.83 – – –

Dividend Paid 0.26 – – – –

Rendering of Services – – 0.50 – –

Borrowings – 70.29 – – –

ICD Given – – – 516.51 –

Investments – – – 4.73 –

Guarantee/Corporate Guarantee :-

- Given 50.00 – – 3235.75 –

- Taken 381.00 – – – –

Out standings :-

- Receivables 52.18 – – – –

- Dividend Payable 0.26 – – – –

17. Previous year figures have been re-grouped or re-arranged where ever considered necessary.

18. Schedule A to S form an integral part of Balance Sheet and Profit & Loss Account.

Signature to Schedule A to S




-sd- -sd- -sd-





June 11, 2008


Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956I) Balance Sheet Abstract and general Company’s General Business Profile

0 6 5 5 9 5

3 1 0 3


Balance Sheet Date


II. Capital Raised during the year (amount in Rs ’000)

III. Position of Mobilisation and Deployment of Funds (Amount in Rs Thousands)

2 0 0 8

2 1

Total Assets

Private Placement

N I L

Sources of Funds



IV. Performance of the Company (Amount in Rs Thousands)

Item Code No. (ITC code) Product descriptionsV. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)

Rights Issue

N I L

Bonus Issue

N I L

Public Issue

N I L

2 5 8 9 2 1

Total Liabilities

2 5 8 9 2 1

1 9 2 1 2 5

Unsecured Loans

6 5 0 0

Paid–up Capital

2 6 4 0

Secured Loans

2 1 4 7 4


3 7 2 0

Net Fixed Assets

8 7 5 5 6Net Current Assets

1 3 8 9 0 3

Accumulated Loss

N I L

Net Income

1 7 8 4 3 2


(Please tick Appropriate box + for Profit, - for Loss)

5 9 6

8 4 7 5 1 0 0 0

Total Expenditure

1 5 5 2 1 0

Dividend %

1 0 0

+ – Profit / Loss Before Tax

√ 2 3 2 2 2

+ – Profit / Loss After Tax

√ 1 3 7 7 3

G L A S S F O R M I N G M A C H I N E

Investments

N I LMiscellaneous Expenditure

N I L


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


O V E R H A U L I N G & S E R V I C E S

Quality Minerals Limited | 113

Directors’ Report

To the Shareholders of Quality Minerals Ltd.

Working ReviewThe Company is solely in the business of supply of Feldspar

Powder. The Feldspar Lumps purchased from mines are grinded

through job workers and the powder so produced is supplied.

The Company has achieved the Total Income of Rs 244.73 lac

against Rs 180.02 lac in the previous year.

DividendThe Directors do not recommend any dividend for the year and

the entire profit is to be carried forward.

Fixed DepositThe Company has not accepted any deposits from the public

within the meaning of Section 58A of the Companies Act, 1956

and as such no amount of principal or interest was outstanding

as of the Balance Sheet date.

DirectorsSri. Arun Kataruka retires by rotation from the Board of Directors

of the Company at the ensuing Annual General Meeting and

being eligible offers himself for re-appointment.

Auditors’ ReportThe Notes on Accounts, as referred to in the Auditors’ Report

are self explanatory and therefore, do not call any further

comments.

AuditorsThe Auditors M/s J.M.Vyas & Company, Chartered Accountants,

Jaipur, the auditors of the Company retire at the ensuing Annual

General Meeting and being eligible, offer themselves for re-

appointment.

Your Directors have pleasure in presenting the Thirty Fourth Annual Report together with Audited Accounts for the year ended

31st March, 2008.

Financial Results (Rs in lac)

Year ended 31.03.2008 Year ended 31.03.2007

Total Income 244.73 180.02

Profit before Interest, Depreciation & Tax 17.27 17.79

Less:

Depreciation 0.20 0.22

Taxation - Current 5.81 5.26

Deferred - Income Tax

- Earlier Years 0.71 –

- Deferred Income Tax 0.02 0.01

- Fringe Benefit Tax 0.01 –

Net Profit 10.52 12.30

Add: Balance brought forward from last year 112.60 100.30

Balance carried forward 123.12 112.60

114 | Quality Minerals Limited

Particulars of Employees There are no employees covered under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees).

Conservation of Energy & Technology Absorption & Foreign Exchange Earnings & Outgo.A) Conservation of Energy

Our Operations are not energy intensive, The Company has no direct consumption of Power and Fuel.

B) Technology Absorption

Not Applicable

C) Foreign Exchange Earnings & Outgo

The Company has neither any Foreign Exchange earning nor outgo.

Your Directors hereby confirm :

- That in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation

relating to material departures.

- That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that

are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended

on March 31, 2008 and of the profit of the Company for the year ended March 31, 2008.

- That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the

provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- That the Directors had prepared the Annual Accounts on a going concern basis.

AcknowledgementYour Directors place on record their grateful appreciation for the continued support , assistance and co-operation received from Central

& State Governments,Banks,Suppliers, Customers and Business Associates.

Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company’s employees.

Registered Office On behalf of the Board of Directors

W-27, Greater Kailash II,

New Delhi – 110048.

Place : Delhi (Amita Somany ) ( D.D.Taparia)

Date : May 19, 2008 Managing Director Director

DIRECTORS’ RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THECOMPANIES ACT, 1956.


Auditors’ Report The MembersQUALITY MINERALS LIMITED

1. We have audited the attached Balance Sheet of M/s Quality

Minerals Limited as at March 31, 2008 and Profit & Loss

Account for the year ended on that date. These financial

statements are the responsibility of the Company's

management. Our responsibility is to express an opinion on

these financial statements based on our audit.

2. We conducted our audit in accordance with accounting

standards generally accepted in India. Those standards

require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of

material misstatement. An audit includes examining, on test

basis, evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by

the management, as well as evaluating the overall financial

statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003

issued by the Central Government in terms of Section 227

(4A) of the Companies Act, 1956 we annex hereto a

statement on the matters specified in paragraphs 4 and 5 of

the said Order.

4. Further to our comments in the Annexure referred to above,

we report that:

a) We have obtained all the information and explanations



b) In our opinion proper books of account as required by

law have been maintained by the Company so far as

appears from our examination of such books.

c) The Balance Sheet and Profit & Loss Account dealt with

by this report are in agreement with the books of

accounts.

d) In our opinion, the Balance Sheet, the Profit & Loss

Account dealt with by this report comply with the

Accounting Standards referred to in sub-section (3C) of

Section 211 of the Companies Act, 1956 to the extent

possible.

e) On the basis of written representations received from the

Directors as on March 31, 2008 and taken on record by

the Board of Directors, we report that none of the

Directors is disqualified as on March 31, 2008 from being

appointed as a Director in terms of clause(g) of sub-

section (i) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and

according to the explanations given to us the said

accounts give the information required by the Companies

Act, 1956 in the manner so required and read with 'Notes

On Accounts' (Schedule K) give a true and fair view in

conformity with the accounting principles generally

accepted in India.

g) There is no amount of Cess payable under section 441A

of the Companies Act., 1956.

(i) in the case of Balance Sheet of the state of affairs of

the Company as at March 31, 2008

(ii) in the case of Profit and Loss Account of the PROFIT

of the Company for the year ended on the date.

For & On behalf of

J. M Vyas & Co.,


Jaipur J.M Vyas

May 19, 2008 Partner


Statement of matters specified by the Companies (Auditors Report) Order 2003 relating to the financial yearended March 31, 2008QUALITY MINERALS LIMITED

(i) a) The Company has maintained proper records showing

full particulars, including quantitative details and

situation of fixed assets.

b) The fixed assets have been physically verified by the

management during the year. In our opinion, the

frequency of verification is reasonable having regard

to the size of the Company and the nature of its assets.

The discrepancies reported on such verification were

not material and have been properly dealt with in the

books of account,

c) None of the fixed assets have been sold during the

year.

(ii) a) The management has conducted physical verification

of inventory at reasonable intervals.

b) In our opinion, the procedures followed by the

management for such physical verification are

reasonable and adequate in relation to size of the

Company and nature of its business.

c) The Company is maintaining proper records of

inventory. The discrepancies noticed on verification

between physical inventories and the book records

were not material in relation to the operation of the

Company and the same have been properly dealt with

in the books of account.

(iii) a) The Company has not granted loans, secured or

unsecured to companies, firms or other parties

covered in the register maintained under section 301 of

the Companies Act, 1956. There is One party and

amount involved is Rs 65,00,000/- (previous year

Rs 70,29,347/-)

b) In our opinion, the rate of interest and other terms and

conditions of the loan granted by the Company, are

prima facie not prejudicial to the interest of the

Company.

c) The receipt of interest and principal amount was

regular.

d) The overdue amount is not more than rupees one lakh,

reasonable steps have been taken by the Company for

recovery of the principal and interest.

e) The Company has not taken any loans, secured or

unsecured to companies, firms or other parties

covered in the register maintained under section 301 of

the Companies Act, 1956.

f) The rate of interest and other terms and conditions of

loans taken by the Company, secured or unsecured,

are not prima facie prejudicial to the interest of the

Company; and

g) Payment of the principal amount and interest are also

regular.

(iv) There is an adequate internal control system

commensurate with the size of the Company and the

nature of its business, for the purchase of inventory and

fixed assets and for the sale of goods and services. There

is no continuing failure to correct major weakness in

internal control system.

(v) a) Based on the audit procedures applied by us and

according to the information and explanations

provided by the management, we are of the opinion

that all transactions that need to be entered into the

register in pursuance of Section 301 of the Companies

Act, 1956 have been so entered.

b) Based on the information and explanation given to us,

it is our opinion that these transactions have been

made at a reasonable prices having regard to the

prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and

explanations given to us, the Company has not accepted

any deposits from the public within the meaning if Section


58A and 58AA of the Companies Act, 1956 and the rules

frame there under.

(vii) The Company has an internal audit system, which in our

opinion commensurate the size and nature of its business.

(viii) As informed to us, the maintenance of cost records has

not been prescribed by the Central Government u/s

209(1)(d) of the Companies Act, 1956, in respect of the

activities carried on by the Company.

(ix) a) The Company is regular in depositing the statutory

dues including Provident Fund, Investor Education and

Protection Fund, Employees State Insurance, Income

tax, Sales tax, Wealth tax, Customs duty, Excise duty

and other statutory dues with the appropriate

authorities.

b) According to the information and explanations given

to us , there are no dues of Sales tax, Income tax,

Customs duty, Wealth tax, Excise duty outstanding on

account of any dispute.

(x) The Company has no accumulated losses at the end of

financial year and it has not incurred any cash losses in

the current and immediately preceding financial year.

(xi) The Company has not defaulted in the repayment of dues

to any financial institution, bank or debenture holders.

(xii) The Company has not granted any loans and advances

on the basis of security by way of pledge of shares,

debentures and other securities.

(xiii) The provisions of any special statue applicable to chit are

not applicable in respect of nidhi/ mutual benefit fund/

societies:-

(xiv) In our opinion the Company has maintained proper

records of transactions and contracts of the investments

dealt in by the Company and timely entries have been

made therein. The investments made by the Company are

held in its own name.

(xv) The Company has not given any guarantees for loans

taken by others from banks or financial institutions.

(xvi) As informed to us, that the Company has not obtained the

term loans.

(xvii) On the basis of an overall examination of the balance sheet

and the information and explanations given to us, we report

that the Company has not utilised any funds raised on

short term basis for long term investments and vice-versa.

(xviii) The Company has not made any preferential allotment of

shares to the parties or companies covered under Section

301 of the Companies Act, 1956, during the year.

(xix) The Company has not issued any debentures.

(xx) The Company has not raised any money through a public

issue during the year.

(xxi) Based upon the audit procedures performed and the

information and explanations given to us by the

management, we report that no fraud on or by the

Company has been noticed or reported during the year.

For & On behalf of

J. M Vyas & Co.,


Jaipur J.M Vyas

May 19, 2008 Partner


The Schedules referred to above form integral part of Balance Sheet


For J.M. Vyas & Co. For Quality Minerals Ltd.


JM Vyas D.D. Taparia Amita Somany

Partner Director Managing Director

Jaipur

May 19, 2008

Balance Sheet As at 31st March, 2008Amount in Rupees

Schedules As at As at

March 31, 2008 March 31, 2007

SOURCES OF FUNDS

Shareholders' Funds

Share Capital A 941,000 941,000

Reserves & Surplus B 12,369,647 11,317,100

13,310,647 12,258,100

Deferred Tax Liability (Net)

(Refer note 'B-5' of Schedule 'K') 32,057 29,569

Total 13,342,705 12,287,669


Fixed Assets C

Gross Block 537,529 537,529

Less: Depreciation 298,332 278,181

Net Block 239,196 259,349

Investments D 120,000 120,000

Current Assets, Loans & Advances

Inventories E 434,520 461,936

Sundry Debtors F 5,695,224 3,951,974

Cash & Bank Balances G 1,199,759 605,923

Loans & Advances H 10,567,145 9,857,819

17,896,648 14,877,652

Less: Current Liabilities & Provisions

Current Liabilities I 3,091,725 1,800,307

Provisions J 1,821,415 1,169,024

4,913,141 2,969,331

Net Current Assets 12,983,507 11,908,321

Total 13,342,705 12,287,669

Significant Accounting Policies and Notes on Accounts K


The Schedules referred to above form integral part of Profit & Loss Account






Jaipur

May 19, 2008


SCHEDULES 2007-2008 2006-2007

INCOME

Sales & Services 23,705,689 17,445,337

Miscellaneous Receipt 461 611

Increase/(Decrease) in Stock 1 (27,416) (201,726)

Total 23,678,734 17,244,222

EXPENDITURE

Materials 15,216,771 10,411,816

Manufacturing, Administrative and other Expenses 2 7,528,220 5,811,909

Interest (Net) 3 (793,615) (757,500)


Total 21,971,527 15,488,658

Profit before Tax 1,707,207 1,755,564

Less: Provision for Income Tax

- Current 580,856 526,669

- Earlier Years 70,757 –

- Deferred 2,488 1,331

- Fringe Benefit Tax 558 –

Profit after Tax 1,052,548 1,230,226

Add: Balance brought forward from last year 11,260,272 10,070,563

Balance Carried to Balance Sheet 12,312,820 11,260,272

Basic/ Diluted Earning per share 111.85 130.74

(Refer Note ' B-12' of Schedule ' K ')

Significant Accounting Policies and Notes on Accounts K

Amount in Rupees


Cash Flow Statement For the year ended 31st March, 2008

31.03.2008 31.03.2007

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 1,707,207 1,755,564

Adjustment for :


Interest (Net) (793,615) (757,500)

Profit on sale of Fixed Assets – –

Operating Profit before working capital changes 933,743 1,020,497

Adjustment for :

Loans and advances (709,326) (1,742,221)

Trade receivables (1,743,250) (2,315,072)

Inventories 27,416 201,725

Trade and other payables 1,943,849 2,063,977

Cash generated from operations 452,432 (771,094)

Direct Taxes paid (652,211) (526,669)

Net Cash from Operating activities (199,779) (1,297,763)

B. CASH FLOW FROM INVESTING ACTIVITIES

Interest received 793,615 757,500

(Purchase)/Sale of Fixed Assets – –

Net Cash used in Investing Activities 793,615 757,500

C. CASH FLOW FROM FINANCING ACTIVITIES

(Repayment)/Proceeds from short term borrowings (net) 0 0

Miscellaneous Expenditure 0 0

Net Cash from Financing Activities 0 0

NET CHANGES IN CASH AND CASH EQUIVALENTS 593,836 (540,263)

CASH AND CASH EQUIVALENTS-OPENING BALANCE 605,923 1,146,185

CASH AND CASH EQUIVALENTS-CLOSING BALANCE 1,199,759 605,923

(Represents Cash in hand and Bank balances)

Amount in Rupees






Jaipur

May 19, 2008


Schedules to the Balance Sheet as at March 31,2008


2007-2008 2006-2007

AUTHORISED10,000 Equity Shares of Rs 100 each 1,000,000 1,000,000 Issued, Subscribed & Paid Up9,410 Equity Shares of Rs 100 each fully paid up 941,000 941,000

941,000 941,000

Amount in Rupees

Schedule - D I INVESTMENTS (At Cost)(In fully paid shares) - Other than Trade

2007-2008 2006-2007

12,000 Equity Shares of Rs 10/- each in Surendra Khanij (P) Ltd. 120,000 120,000 120,000 120,000


Schedule - C I FIXED ASSETS

Investment Allowance Reserve

As per Last Balance Sheet 56,828 56,828

Profit & Loss Account

As per Annexed Account 12,312,820 11,260,272

Total 12,369,647 11,317,100


As at Sales/adj. As at Upto For the Written back Upto As at As atPARTICULARS 01.04.2007 during the 31.03.2008 31.03.2007 Year during the 31.03.2008 31.03.2008 31.03.2007

year year

Building 355,338 355,338 176,624 8,936 – 185,560 169,778 178,714

Electrical fitting 9,182 9,182 7,370 252 – 7,622 1,560 1,812

Plant & Machineries 173,009 173,009 94,188 10,964 – 105,152 67,857 78,821

Vehicle – – – – – – – –

Total 537,529 537,529 278,182 20,151 – 298,332 239,196 259,348

Previous Year 1,267,564 1,267,564 708,829 85,973 – 794,802 472,761

Schedule - E I CURRENT ASSETS, LOANS & ADVANCES

Inventories

(As taken, valued & certified by the Management)

Feldspar Lumps 434,520 461,936

434,520 461,936

Schedule - F I SUNDRY DEBTORS(Unsecured, considered good)

Debts outstanding for a period exceeding six months – –

Other Debts 5,695,224 3,951,974

5,695,224 3,951,974


Schedules to the Balance Sheet as at March 31,2008

Schedule - G I CASH & BANK BALANCES

2007-2008 2006-2007

Cash in hand 173,813 258,098 Balance with Scheduled Banks:In Current Account 1,025,946 347,825

1,199,759 605,923

Amount in Rupees

Schedules to the Profit & Loss Account for the year ended March 31, 2008

Schedule - 1 I INCREASE/(DECREASE) IN STOCK

2007-2008 2006-2007

Closing Stock:Feldspar Lumps 434,520 461,935

434,520 461,935 Less : Opening StockUnwashed Silica Sand –Feldspar Lumps 461,935 663,661

(27,416) (201,726)

Amount in Rupees

Schedule - H I LOANS & ADVANCES(Unsecured, considered good, unless otherwise specified)

Loans

Deposited with a Company 6,500,000 7,029,347

Deposit in Bank 1,500,000 1,500,000

Advances

Advances recoverable in cash or for value to be received 2,567,145 1,328,472

10,567,145 9,857,819

Schedule - I I CURRENT LIABILITIES & PROVISIONS

Sundry Creditors 2,548,295 1,130,904

Other Liabilities 543,430 669,403

3,091,725 1,800,307

Schedule - J I PROVISIONS

For Taxation 1,815,229 1,163,616

Unavailed Leave 5,628 5408

Fringe Benefit Tax 558 –

For Proposed Dividend

For Tax on Proposed Dividend

1,821,415 1,169,024


Schedules to the Profit & Loss Account for the year ended March 31, 2008

Schedules to the Balance Sheet and Profit & Loss Account

Schedule - 2 I ADMINISTRATIVE & OTHER EXPENSES

2007-2008 2006-2007

Salaries, Bonus & LTA 219,759 186,353 Insurance - - Miscellaneous Expenses 226,487 163,493 Grinding Charges 6,705,789 5,096,018 Freight Charges 69,443 59,311 Director's Remuneration 300,000 300,000 Payment to Auditors :Audit Fees 6,742 6,734 Other Services – –

7,528,220 5,811,909

Amount in Rupees

Schedule - 3 I INTEREST

Interest Paid – –

Less: Interest Received/Receivable 793,615 757,500

(793,615) (757,500)

Schedule - K I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

A. Significant Accounting Policies

(1) Basis of Accounting

The Company prepares its accounts under the historical cost convention on accrual basis, except otherwise stated in accordance

with normally accepted accounting principles and applicable Accounting Standards in India.

(2) Sales

Sales are recognised on dispatch of goods by the Company and are reflected in accounts at net realisable value.

(3) Fixed Assets & Depreciation

Fixed Assets are shown at cost less depreciation. Depreciation has been charged at the rates specified in Schedule XIV to the

Companies Act, 1956.

(4) Valuation of Inventory

Raw material is valued at lower of cost or net realisable value.

(5) Earning per Share

The earnings considered in ascertaining the Company's earning per share comprises of the net profit after tax. The number of

shares used in computing basic earning per share is weighted average number of shares outstanding during the year.



Schedule - K I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)

B. Notes on Accounts

(1) Taxation

Tax expenses for the year, comprising current tax and deferred tax is included in determining the net profit for the year. A provision

is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws.

31.03.2008 31.03.2007

(2) Sundry Debtors include :- Due from holding company 5541637 3570135

(3) Amount paid or credited to the Auditors :Audit Fee 6742 6734

6742 6734

(4) In consonance with Accounting Standard - 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants

of India, during the year the Company has accounted for deferred tax.

(5) Deferred Tax:

Opening Balance Charged to P/L A/c Closing Balance

(Rupees) (Rupees) (Rupees)

Breakup of deferred tax assets/liabilities and reconciliation of current year deferred tax charge:Deferred Tax Liabilities:The impact of difference between carrying amount of fixed 33922 575 34497assets in the financial statements and income tax return Total (A) 33922 575 34497Deferred Tax Assets:The impact of difference between carrying amount of fixed assets in the financial statements and income tax return – – –Tax impact of expenses charged in the financial Statement but allowable as deductions in future year under Income Tax Act:Provision of leave encashment 4352 1913 2439Total (B) 4352 1913 2439Net Deferred Tax Liability Total (A - B) 29569 2488 32057

(6) Related Party Transactions:

The Company is controlled by Hindusthan National Glass & Industries Limited which owns 99.73% of the Company's shares.

The following related party transactions were carried during the year:

Name of the Related Party Nature of Nature of 31.03.2008 31.03.2007

Relationship Transaction Rupees Rupees

Receivable

1. Hindusthan National Glass Holding Company Income:

& Industries limited Sales 23,705,689 17,445,337

Re-imbursement of expenses

Expenses:

Re-imbursement of expenses

3. Glass Equipment (India) Ltd. Under common control Income:

Interest on loan 682,500 682,500

4. Smt. Amita Somany Managing Director Remuneration 300,000 300,000



Schedule - K I ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)

(7) The Company's exclusive business is dealing in minerals and as such in the opinion of the management this is the only reportablesegment, as per Accounting Standard 17 on Segment Reporting, issued by the Institute of Chartered Accountants of India.

(8) In view of the applicability of the provisions of Section 43 A (i) of the Companies Act, 1956, the Company has become a deemed publiccompany and Registrar of Companies, Rajasthan, Jaipur has already made necessary endorsement in the Certificate of incorporation.

(9) Previous year figures have been re-grouped or re-arranged wherever considered necessary.

(10) Schedule A to K and 1 to 3 form an integral part of Balance Sheet as at March 31, 2008 and Profit & Loss Account for the yearended on that date respectively.

(11) Figures have been rounded off to the nearest rupee.

(12) Earning Per Share

31.03.2008 31.03.2007Rupees Rupees

Net Profit attributable to Share Holders 1052548 1230226Weighted average number of equity shares 9410 9410Basic earning per share of Rs 100/- each 111.85 130.74

The Company does not have any outstanding diluted potential equity shares.

Consequently the basic and diluted earning per share of the Company are the same.

C. Information pursuant to paragraphs 3 & 4 of Part II of Schedule VI of the Companies Act, 1956.

(1) Capacity & Actual Production:

Class of Goods Units Licensed Capacity Installed Capacity Actual Production

Feldspar Powder M.T. N A N A 13,038.28 (2,811.91)

Opening Stock Purchases Closing Stock Sales/Consumption

(2) Purchase, Stock and Sales:Feldspar Powder (Normal Grade) Unit (MT) – – – 13,038.28

(2,811.91)Value (Rupees) – – – 23705689Feldspar LumpsUnit (MT) 649.150 18,471.030 509.290 18,611 M.T. 0.000 0.000 – (4,794.110)Value (Rupees) 461,935 15,216,771 434,520 15,244,186 Rupees 0 0 – (3,308,086)Unit (MT) 0M.T.Value (Rupees) 0Rupees

(3) Raw Material Consumed:

31.03.2008 31.03.2007 Units (MT) Value (Rupees) Units (MT) Value (Rupees)

Feldspar Lumps 18610.90 15,244,185 14879.076 10,613,542

As per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants

JM Vyas D.D. Taparia Amita SomanyPartner Director Managing DirectorJaipurMay 19, 2008


Schedules to the Balance Sheet and Profit & Loss AccountD. Balance Sheet Abstract and general profile of the Company under Part IV to Schedule VI of the Companies Act, 1956

1 5 7 6

3 1 0 3


Balance Sheet Date


II. Capital Raised during the year (Amount in Rs '000)

III. Position of Mobilisation and Deployment of Funds (Amounts in Rs '000)

2 0 0 8

1 7

Total Assets

Private Placement

N I L

Sources of Funds



IV. Performance of the Company (Amount in Rs '000)


V. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)

Rights Issue

N I L

Bonus Issue

N I L

Public Issue

N I L

1 3 3 4 3

Total Liabilities

1 3 3 4 3

1 2 3 7 0

Unsecured Loans

N I L

Paid–up Capital

9 4 1

Secured Loans

N I L


3 2

Net Fixed Assets

2 3 9Net Current Assets

1 2 9 8 4

Accumulated Loss

N I L

Turnover

2 3 6 7 9


1 1 1 . 8 5

N. A. N. A.

Total Expenditure

2 1 9 7 2

Dividend %

N I L

Profit / Loss Before Tax

1 7 0 7

Profit / Loss After Tax

1 0 5 3

Investments

1 2 0Miscellaneous Expenditure

N I L






Jaipur

May 19, 2008


Auditors’ Report To the Board of Directors ofHindusthan National Glass & Industries Limited on the Consolidated Financial Statement of Hindusthan National Glass& Industries Limited and its Subsidiaries

1. We have examined the attached Consolidated Balance Sheet

of Hindusthan National Glass & Industries Limited ("the

Company") and its subsidiaries and associates as at 31st

March, 2008, the Consolidated Profit and Loss Account and

also the Consolidated Cash Flow Statement for the year then

ended on that date, annexed hereto. These consolidated

financial statements are the responsibility of the Company's

management. Our responsibility is to express an opinion on

these financial statements based on our audit.

2. We conducted our audit in accordance with the generally

accepted auditing standards in India. These standards

require that we plan and perform the audit to obtain

reasonable assurance whether the financial statements are

prepared, in all material respects, in accordance with an

identified financial reporting framework and are free of

material misstatements. An audit includes, examining, on a

test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing

the accounting principles used and significant estimates

made by the management, as well as evaluating the overall

financial statements. We believe that our audit provides a

reasonable basis for our opinion.

3. We did not audit the financial statements of subsidiary

companies Glass Equipment (India) Ltd., and Quality

Minerals Limited for the year ended 31st March, 2008,whose

financial statements reflects total assets of Rs 2771.76 lac as

at 31st March, 2008 , total revenues of Rs 2021.11 lac and

cash flows amounting to Rs 14.79 lac for the year ended as

on 31st March, 2008. These financial statements have been

audited by other auditors whose report(s) has (have) been

furnished to us, and in our opinion, insofar as it relates to the

amounts included in respect of the subsidiaries, is based

solely on the report of the other auditors.

4. Attention is invited to Note 2(i) of Schedule S regarding non-

ascertainment and recognition of derivative transactions. The

consequential impact of the above for the reasons mentioned

in the said note could not be ascertained and therefore cannot

be commented upon by us.

5. Subject to Para 4 above, impact of which on the Consolidated

Financial Statements could not be ascertained and

commented upon by us, we report that:

(i) the consolidated financial statements have been

prepared by the Company in accordance with the

requirements of Accounting Standard 21 "Consolidated

Financial Statements", Accounting Standard 23

"Accounting for Investment in Associates in Consolidated

Financial Statements", issued by the Institute of Chartered

Accountants of, India and on the basis of the individual

financial statements of the Company and its subsidiary

companies and associates included in the consolidated

financial statements.

(ii) In our opinion, based on our audit and the report of other

auditors, the Consolidated Financial Statements referred

to above give a true and fair view of the financial position

of the Company and its subsidiary companies and

associates as at 31st March, 2008 ; and of the results of

their operations for the year then ended in conformity with

the accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the

consolidated state of affairs of the Company and its

subsidiary companies and associates as at 31st

March, 2008; and

(b) in the case of the Consolidated Profit and Loss

Account, of the consolidated results of operations of

the Company and its subsidiary companies and

associates for the year then ended on that date ; and

(c) in the case of Consolidated Cash Flow Statement, of

the consolidated cash flows of the Company and its

subsidiary companies and associates for the year

then ended on that date,

For Lodha & Co


H. K. Verma

Place: Kolkata Partner

Date: June 25, 2008 Membership No.: 55104


The Schedules referred to above form an integral part of Balance Sheet




H. K. Verma



June 25, 2008

Consolidated Balance Sheet As at 31st March, 2008Rs in lac


SOURCES OF FUNDS

Shareholders' Funds

Share Capital A 1746.77 1104.35

Reserves and Surplus B 86244.22 22856.86

87990.99 23961.21

Loan Funds

Secured Loans C 28957.70 18182.91

Unsecured Loans D 13127.61 6883.77

42085.31 25066.68

Deferred Tax Liabilities (Net) 1845.04 4589.31

Total 131921.34 53617.20


Fixed Assets

Gross Block 127459.54 57306.21

Less : Depreciation 42181.15 23567.02

Net Block E 85278.39 33739.19

Capital Work-In-Progress 4510.60 3652.61

Investments F 11394.50 1023.21

Current Assets, Loans and Advances

Inventories G 17343.27 10165.31

Sundry Debtors H 16456.51 9009.65

Cash and Bank Balances I 1701.48 86.67

Loans and Advances and Other Current Assets J 14059.66 5589.23

49560.92 24850.86

Less:

Current Liabilities and Provisions

Current Liabilities K 14399.63 7200.63

Provisions L 4423.44 2448.04

18823.07 9648.67

Net Current Assets 30737.85 15202.19

Total 131921.34 53617.20

Significant Accounting Policies & Notes on Accounts S


The Schedules referred to above form an integral part of Profit & Loss Account




H. K. Verma



June 25, 2008

Consolidated Profit and Loss Account For the year ended 31st March, 2008

SCHEDULES 31.03.2008 31.03.2007

INCOMESales M 115867.01 60543.68 Less : Excise Duty 12954.42 7829.83

102912.59 52713.85 Other Income N 1122.98 657.58 Increase / (Decrease) in Stock O (460.84) (368.43)

103574.73 53003.00 EXPENDITUREMaterials P 30018.52 15443.46 Manufacturing and Other Expenses Q 51908.76 27066.92

81927.28 42510.38 Profit before Depreciation, Interest and Tax 21647.45 10492.62 Depreciation 7371.65 3638.66 Transfered From Revaluation Reserve (281.21) (237.98)

7090.44 3400.68 Interest and Finance Expenses R 2365.07 1942.39

9455.51 5343.07 Profit before Tax 12191.94 5149.55 Less : Provision for Income Tax

- Current Tax 99.01 1531.13 - Minimum Alternate Tax 1367.20- Less: MAT Credit Entitlement 1367.20- Fringe Benefit Tax 38.20 19.25 - Deferred Tax (2683.19) 163.48 - Earlier years (1300.18)

Profit after Tax 16038.10 3435.69 - Concern Share 16038.74 3435.99 - Minority (0.64) (0.30)Add: Balance brought forward from last year 620.23 850.44 Amount Available for Appropriation 16658.97 4286.43 APPROPRIATIONGeneral Reserve 15000.00 3539.98 Interim Dividend on Equity Shares 110.43 Tax (including cess) on Interim Dividend 15.49 Proposed Dividend on Equity Shares 725.11 0.26 Tax(including Cess) on Proposed Dividend 123.24 0.04 Balance carried to the Balance Sheet 810.62 620.23

16658.97 4286.43 Basic and Diluted Earning per Share of Rs 10/- each 91.82 31.11 (Refer Note No.10 of Schedule 'S')Significant Accounting Policies and Notes on Accounts S

Rs in lac


Consolidated Cash Flow Statement For the year ended 31st March, 2008

2007-08 2006-07A CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax and extraordinary items 12191.94 5,149.55 Adjustments to reconcile profit before tax to cash provided by operating activitiesDepreciation 7090.44 3,400.68 Bad Debts and Provision for Doubtful Debts 239.25 231.28 Interest Expenses (Net) 2,365.07 1,942.39 Dividend Income (0.26) (0.26)Liability no longer required written back (97.38) (104.49)Unrealised Foreign Exchange Loss/(Gain) (Net) – (91.21)Realised Foreign Exchange Loss/(Gain) on Term Loans (Net) – 29.39 Provision for Diminution in Investments 0.17 –Prior Period Income (3.03) –Interest received (132.09) (246.39)Loss / (Profit) on sale of Fixed Assets (Net) 71.56 37.26 Loss / (Profit) on sale of current Investments (Net) (8.15) (4.84)Operating Profit before working capital changes 21,717.52 10,343.36 Changes in current assets and liabilitiesLoans and Advances (4,600.86) (1,727.71)Trade and other Receivables (4,030.18) 376.22 Inventories (537.45) 738.64 Trade and other Payables 3,853.33 346.78 NET CASH GENERATED BY OPERATING ACTIVITIES 16,402.36 10,077.29 Adjustments for :Direct Taxes Paid (149.63) (1,015.20)Refund of Income Tax – 81.87 Interest received on Income Tax Refund – 8.03 Fringe Benefit Tax Paid (38.27) (20.53)NET CASH FROM OPERATING ACTIVITIES 16,214.46 9,131.46

B.CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Fixed Assets (12,927.73) (7,005.82)Sale of Fixed Assets 169.82 512.95 Sale of Long Term Investments 42.93 –Purchase of Long Term Investment (4,367.93) (1,000.00)Purchase of Current Investments (5794.44) (4,380.00)Sale of Current Investments 5802.59 4,384.84 Dividend received 0.26 0.26 Interest received 59.53 281.13 NET CASH USED IN INVESTING ACTIVITIES (17,014.97) (7,206.64)

C.CASH FLOW FROM FINANCING ACTIVITIES:Proceeds/(Repayment) from long term borrowing (Net) 810.38 (1,833.67)Proceeds/(Repayment) from short term borrowings (Net) 3,035.44 1,937.20 Dividend paid including Corporate Dividend Tax – (209.68)Interest paid (2,349.58) (1,915.83)NET CASH FROM FINANCING ACTIVITIES 1,496.24 (2,021.98)NET CHANGES IN CASH AND CASH EQUIVALENTS 695.73 (97.16)OPENING CASH AND CASH EQUIVALENTS 1,005.75 183.83 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 1,701.48 86.67(represents Cash in Hand and Bank balances)

Note:1. The above cash flow Statement has been prepared under the "Indirect Method" as set out in the Accounting Standard 3 (AS-3) - Cash

Flow Statements issued by The Institute of Chartered Accountants of India.2. Previous Years figure's have been regrouped wherever necessary to conform to the Current years

Rs in lac




H. K. Verma



June 25, 2008


Schedules forming part of the Consolidated Accounts


31.03.2008 31.03.2007

AUTHORISED5115,00,000 Equity Shares of Rs 10/- each. 51150.00 1150.00(Previous Year 11500000 shares of Rs 10/ each)

51150.00 1150.00ISSUED,SUBSCRIBED AND PAID UP1,10,43,368 Equity shares (Previous Year 1,10,43,368 shares) of Rs 10/- each 1104.34 1104.34 fully paid up of which 58,10,360 Equity Shares of Rs 10/- each were allottedas fully paid up Bonus shares by Capitalisation of General ReserveShare Suspense Account (pending allotment pursuant to the Scheme of Arrangement 642.43 (Refer Note No. 26(d) of Schedule S)Add : Forfeited Shares (Amount Originally paid up @Rs 5/- on 280 Equity Shares) 0.01(Transferred to General Reserve during the year)

1746.77 1104.35

Rs in lac


31.03.2008 31.03.2007

Capital Reserve


Less: Transfer to General reserve 0.04 0.02 0.04

Capital Reserve on Consolidation 2.90 2.90

Investment Allowance Reserve 0.57 0.57

General Reserve


Add: Adjustment consequent upon amalgamation of erstwhile ACE 31391.22

Glass Container Ltd [Refer Note No. 26(1)(b) of Schedule S]

Add: Transfer from Capital Reserve 0.04 0.02

Add: Transfer from Profit and Loss Account 15000.00 3539.98

Less: Adjustment on account of Transitional provision under 118.63

AS-15 [Refer Note No.17 of Schedule S]

Less: Loss of erstwhile ACE Glass Containers Ltd for the year 3146.66

ended 31.03.2007 [Refer Note No. 26(1)(c)(ii) of Schedule S]

Less: Carrying Cost of shares held in erstwhile Ace 7.55

Glass Containers Ltd. pursuant to the Scheme of Amalgamation

[Refer Note No. 26(1)(c)(i) of Schedule 'S']

Less: Merger expenses and others 83.19


Less: Minority Interest 0.56 60774.76 17740.09

Revaluation Reserve


Add: Revaluation of Land and Buildings 8054.76

[Refer Note No. 7(ii) of Schedule S]

Less: Transfer to Profit and Loss A/c 281.21 237.98


Less: Adjustment on account of Sale / Discard of Assets 60.75 11101.53 430.50 3388.73


Schedule - B I RESERVES AND SURPLUS (Contd.)

31.03.2008 31.03.2007

Share Premium


Add: Adjustment consequent upon amalgamation of erstwhile ACE 12449.54 13553.84 1104.30

Glass Container Ltd (Refer Note No. 26(1)(b) of Schedule S)

Profit and Loss Account

Surplus as per Profit and Loss Account 810.62 620.23

86244.22 22856.86

Rs in lacSchedules forming part of the Consolidated Accounts


Notes 31.03.2008 31.03.2007

I. Rupee term Loans

From Financial Institution

Export Import Bank of India 1 6327.78 2038.89

From Banks

IDBI Bank Limited 750.00

State Bank of India 2 2432.00 4166.67

The Honkong & Shanghai Banking Corporation Limited 3 4562.50

II. Foreign Currency Loans

From Banks

- State Bank of India

Foreign Currency Term Loan - I 229.00

Foreign Currency Term Loan - II 169.82

The Honkong & Shanghai Banking Corporation Limited PCFC 4 599.16

- ICICI Bank - External Commercial Borrowing 5 2005.50 2158.50

III. Working Capital Borrowing from Banks 6 12709.54 8334.13

IV. Loans under Finance Schemes

From Banks 7 293.05 324.77

From Others 7 7.13 11.13

V. Interest accrued and due 21.04

28957.70 18182.91

Notes:1) The loans are secured by first charge ranking pari-passu with charges created and/or to be created on all immovable properties

by way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.

2) The loans are secured by first charge ranking pari-passu with charges created and/or to be created on all immovable propertiesby way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders. These loans are alsocollaterally secured by second charge on Current Assets of the said plants.

3) This includes term loan of Rs 1562.50 lac taken for Nashik plant and is secured by first charge ranking pari-passu with chargescreated and/or to be created on all immovable properties by way of equitable mortgage and hypothecation of all moveableproperties both present and future of Rishikesh, Pondicherry and Nashik Plants, save and except specific assets exclusivelyhypothecated in favour of respective lenders. Balance Rs 3000 lac are secured by first charge ranking pari-passu with chargescreated and/or to be created on all immovable properties by way of equitable mortgage and hypothecation of all moveableproperties of Neemrana Plant, save and except specific assets exclusively hypothecated in favour of respective lenders.




Schedule - E I FIXED ASSETS

31.03.2008 31.03.2007

Short Term Loans

From Banks 8555.45 1750.80

Non Convertible Debentures * 3000.00 2000.00

From Others 27.04 1313.10

Others

Interest Free Loans 1000.00

Trade Deposits 100.10 100.10

Deferment Loan 1445.02 719.77

13127.61 6883.77

Note: *

* Represents Mibor linked Non-Convertible Debentures privately placed with - JM Mutual Fund: (Previous year - Canbank Mutual Fund)

4) This loan is secured by hypothecation of inventories (both present and future) and book debts and second charge on allimmoveables, moveable properties including land and building of Rishra, Bahadurgarh and Neemrana plants.

5) This loan is secured by first charge ranking pari-passu with charges created and/or to be created on all immovable properties byway of equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh andNeemrana Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.

6) This includes Rs 3893.25 lac secured by hypothecation of inventories (both present and future) and book debts and second chargeon all immoveables, moveable properties including land and building of Rishikesh, Pondicherry and Nashik plants. Rs 214.74 lacis secured by hypothecation of stock of finished goods, semi finished goods, raw materials, stores and spares including packingmaterials, book debts, other current assets, entire plant and machinery and other fixed assets of Glass Equipment (India) Limited.The balance of Rs 8601.55 lac is secured by hypothecation of inventories (both present and future) and book debts and secondcharge on all immoveables, moveable properties including land and building of Rishra, Bahadurgarh and Neemrana plants.

7) Secured by hypothecation of vehicles financed in favour of respective lenders.

Rs in lac


PARTICULARS Cost at Acquired on Additions Deductions Cost at Upto Acquired on For the Less on Upto As on As on

01.04.07 Amalgamation 31.03.08 01.04.07 Amalgamation Year Sale/ 31.03.08 31.03.08 31.03.07

as on Addition Deductions /

01.04.06 during Adjustments

2006-2007

TANGIBLE

1. Land 1102.50 5908.70 7220.59 14231.79 3.23 2.37 5.60 14226.19 1102.50

2. Buildings 5116.33 5521.71 1.85 2742.77 7.03 13375.63 1385.31 682.91 393.88 1.16 2460.94 10914.69 3731.02

3. Leasehold Buildings 9.18 9.18 0.03 0.15 0.18 9.00 9.15

4. Plant and Machinery 49910.33 37597.55 1314.98 10711.74 1796.35 97738.25 21750.72 11880.86 6796.66 1547.06 38881.18 58857.07 28159.61

5. Furniture and Fixtures 123.18 198.86 14.41 26.92 3.10 360.27 55.34 83.35 15.65 0.77 153.57 206.70 67.84

6. Railway Siding 2.09 2.09 2.09 2.09

7. Office and Other 72.89 248.50 53.64 1.09 373.94 28.27 140.23 26.65 0.26 194.89 179.05 44.62

Equipments

8. Vehicles 930.79 110.04 44.54 289.22 68.00 1306.59 321.43 32.36 123.58 34.66 442.71 863.88 609.36

INTANGIBLE

9. Computer Software 38.92 37.16 26.47 40.75 61.80 23.83 33.73 12.71 30.28 39.99 21.81 15.09

57306.21 49622.52 1375.78 21071.35 1916.32 127459.54 23567.02 12856.67 7371.65 1614.19 42181.15 85278.39 33739.19

Previous Year 54721.23 5074.75 2489.77 57306.21 21437.42 3638.66 1509.06 23567.02 33739.19


Face Value 31.03.2008 31.03.2007

Rs Nos.

(A) Long Term

Trade


Unquoted

Ace Glass Containers Ltd. (PY 149901400 shares) 10 15.10

Capexil Agencies Ltd. 1000 5 0.05 0.05

Ceramic Decorators Ltd. 10 7

HNG Float Glass Ltd. 10 10000 4201.00 1.00

Other than Trade

Unquoted

Units of CAN FMP 13M-SRI (Close Ended) 10 10000000 1000.00 1000.00

Fully Paid up Equity Shares

Hasow Automation Ltd. 10 47100 4.73 4.73

Less: Provision for diminution in Investments 4.73 4.73

The Calcutta Stock Exchange Association Limited 1 8364 167.28

Surendra Khanij Pvt Ltd. 10 12000 1.20 1.20

GOVERNMENT SECURITIES

Unquoted

Deposit With Govt. Authorities @

(a) 12 Years National Savings Certificate 0.01 0.01

(b) 7 Years National Savings Certificate 0.01 0.01

(c) 6 Years National Savings Certificate 6.49 5.84

Beneficial Interest in Shares held in HNG Trust 7.55

(Refer Note No. 26(e) of Schedule 'S')

Beneficial Interest in Shares held in Ace Trust 6009.35

(Refer Note No. 26(f) of Schedule 'S')

(B) Current

Other than Trade

Quoted Shares

Kajaria Ceramics Ltd. 2 5470 1.56

@ Rs 0.42 lac since matured but not encashed 11394.50 1023.21

Aggregate amount of Quoted Investments 1.56

Aggregate amount of Unquoted Investments 11392.94 1023.21

11394.50 1023.21

Note: Market Value of Quoted shares Rs 1.56 lac (Previous Year NIL)

Rs in lac


Schedule - F I INVESTMENTS



Schedule - G I INVENTORIES(As taken, valued and certified by the Management)

31.03.2008 31.03.2007

Raw Materials 3299.50 1273.88

Stores,Spare parts,Fuel and Building Materials

(Including in Transit Rs 172.48 lac, Previous Year Rs 146.14 lac) 7189.34 3475.79

Packing Materials 423.81 225.96

Stock in Process 546.37 424.07


17343.27 10165.31

Rs in lac

Schedule - H I SUNDRY DEBTORS(Unsecured, considered good unless otherwise stated)

Debts due for a period exceeding six months

Considered good 939.95 670.03

Considered doubtful 991.53 392.80

1931.48 1062.83

Less: Provision for doubtful debts 991.53 392.80

939.95 670.03

Other Debts 15516.56 8339.62

16456.51 9009.65

Schedule - I I CASH AND BANK BALANCES

Cash balance on hand 31.52 19.42

Cheques in hand 1078.26

Balances With Scheduled Banks

in Current Accounts 533.41 52.25

in Fixed Deposit Accounts* 18.25 15.00

in Margin Money Accounts* 40.03

Balances With Post Office in Saving Bank Account 0.01

1701.48 86.67

* (Receipts pledged with the banks and government authorities for Rs 57.18 lac, PY Rs NIL)


Schedule - J I LOANS AND ADVANCES AND OTHER CURRENT ASSETS (Unsecured and Considered good)

31.03.2008 31.03.2007

Loans

To Bodies Corporate 4724.00

(Advances Recoverable in cash or in kind or for value to be received) 2109.63 1117.69

(Net of Doubtful Advances Rs 240.65 lac, Previous Year: Rs NIL)

VAT Credit (Inputs) Account 613.24 393.59

Advance towards equity participation 517.69

Advance Income Tax 3190.26 1672.24

Tax Deducted at Source 175.80 71.54

Advance Fringe Benefit Tax 41.75

MAT Credit Entitlement 1367.57

Deposits and balances with Government Authorities and Other Departments 1586.35 1212.94

Other Deposits 155.10 602.91

13963.70 5588.60

Other Current Assets

Interest Receivable 85.72

Fixed Assets Held for disposal 10.24 0.63

(at lower of net book value or estimated net realisable value)

14059.66 5589.23



Sundry Creditors

Dues to Small scale undertaking(s) 121.66

Dues to Micro, Small & Medium Enterprises 55.68

Others 14121.28 6885.48

Interest accrued but not due on Loans 104.25 88.76

Commission to Directors 118.40 100.00

Unclaimed dividend 0.02 4.73

* This is not due for payment to Investor Education & Protection Fund. 14399.63 7200.63


For Taxation 2445.13 2271.48

For Gratuity and Unavailed Leave 1088.01 175.99

For Fringe Benefit Tax 41.95 0.27

For Proposed Dividend 725.11 0.26

For Tax on Proposed Dividend 123.24 0.04

4423.44 2448.04


Schedule - M I SALES

31.03.2008 31.03.2007

Finished Goods 115000.57 60356.10

Others 703.41 183.77

General Merchandise Sale 163.03 3.81

115867.01 60543.68

Less: Excise Duty 12954.42 7829.83

102912.59 52713.85


Schedule - N I OTHER INCOME

Hire charges and Lease Rental 24.54 30.09

Dividends On Trade and Long Term Investments 0.26 0.26

Interest received from Banks and Others 72.91 246.39

Rent 34.38 40.57

Insurance Claims 1.98 0.90

Miscellaneous Receipts 483.53 192.46

Liabilities / Provisions no longer required written back 97.38 104.49

Income from derivatives 71.29

Profit on Assets Sold/Discarded 15.46 34.41

Profit on Sale of Current Investment - Other than Trade 8.15 4.84

Foreign Exchange Fluctuations (Net) 310.07 3.17

Prior Period Income 3.03

1122.98 657.58

Schedule - O I INCREASE / (DECREASE) IN STOCK

Closing Stock


Work-in-Process 546.37 424.07

6430.62 5189.68

Less :

Opening Stock :

Finished Goods 4765.61

Add: Transfer pursuant to Scheme of Amalgamation 1648.06 6413.67 5054.79

Work-in-Process 424.07

Add: Transfer pursuant to Scheme of Amalgamation 53.72 477.79 503.32

6891.46 5558.11

Increase / (Decrease) (460.84) (368.43)

Schedule - P I MATERIALS

Raw Materials Consumed 29646.93 15347.79

Purchase of Trading Material 371.59 95.67

30018.52 15443.46


Schedule - Q I MANUFACTURING AND OTHER EXPENSES

31.03.2008 31.03.2007

Stores and Spare Parts Consumed 5111.74 3097.61

Power and Fuel 27200.22 13522.48

Packing Material Consumed and Packing Charges 7605.62 3868.28

Salaries,Wages,Bonus and Gratuity, etc 4514.95 2185.78

Contribution to Provident and Other Funds 741.04 280.96

Workmen and Staff Welfare Expenses 439.01 251.92

Rent (Including Lease Rent) 95.43 29.92

Rates and Taxes 58.85 25.16

Repair and Maintenance:-

Building 132.87 30.66

Plant and Machinery 1061.60 663.80

Others 210.98 93.27

Freight outwards, Transport and Other Selling Expenses

(Net of realisation of Rs 983.56 lac, PY Rs 1498.34 lac) 1004.07 855.59

Commission on Sales 116.10 121.29

Cash Discount on Sales 2.18

Insurance 150.22 158.80

Charity and Donation 31.00 4.76

Bad Debts/Advances Written Off 185.81 29.88

Less: Provision for Doubtful Debts / Advances written back 195.92 (10.11) 29.88

Provision for Doubtful Debtors/Advances 249.36 201.40

Miscellaneous Expenses 2476.12 954.03

Excise Duty on Stock (28.93) 335.00

Director's Remuneration 280.43 231.52

Washing and Grinding Charges 67.06 50.96

Provision For Loss on Derivative Transaction 313.94

Loss on sale and discard of fixed assets 87.02 71.67

Provision for diminution in investments 0.17

51908.76 27066.92


Schedule - R I INTEREST AND FINANCE EXPENSES

On Debentures 569.50 515.91

On Term Loans 1510.40 1062.54

Bank and Others 153.39 241.97

Finance Expenses 131.78 121.97

2365.07 1942.39


Schedule - S I NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT OF THE COMPANY AND ITS SUBSIDIARIES.


1. Principle of Consolidation

a. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standard 21 (AS 21) on

“Consolidated Financial Statements” and Accounting Standard 23 (AS 23) on "Accounting for Investments in Associates in

Consolidated Financial Statements" issued by The Institute of Chartered Accountants of India.

a. The Subsidiaries (which along with Hindusthan National Glass & Industries Ltd., the holding company, constitute the group)

have been considered in the preparation of these consolidated financial statements are:

d. Consolidation Procedures

For preparation of consolidated financial statements, the financial statements of the Company and its subsidiaries have been

combined on a line - by - line basis by adding together like items of assets, liabilities, income and expenditures, after eliminating

intra - group balances and transactions and the resulting unrealised profit or losses.

e. Other Significant Accounting Policies

These are set out in the "Significant Accounting Policies and Notes on Accounts" of the Company and its subsidiaries.

Name of Subsidiary Percentage of voting power either

directly or through subsidiaries as at

31.03.2008 31.03.2007

Glass Equipment (India) Ltd. 100.00 100.00

Quality Minerals Ltd. 99.73 99.73

Percentage of voting power held as at

31.03.2008 31.03.2007

c. Investments in Associates:

ACE Glass Containers Limited. (since amalgamated with the Company) – 50.00

2 Contingent Liabilities not provided for (Rs In Lac)

As at As at

31st March 2008 31st March 2007

a) Outstanding Bank Guarantees / Letter of Credits 1384.86 1006.31

b) Income Tax demand under appeal/dispute 9.28 7.23

c) Sales Tax matter under Appeals 214.25 –

d) Excise Duty demand/Show cause notices issued against which the Company 1703.25 349.11

has preferred appeals / replies and which in the opinion of the management

is not tenable.

e) Cases pending with Labour Courts (to the extent ascertainable) 549.60 0.01

f) Claim for increased price of land acquired at Bahadurgarh by the then Punjab 0.30 0.30

Government and given to the Company against which the claimants have

preferred appeal in the Supreme Court against the Order of the High Court.

g) Amount of duty against Export obligation in respect of exemption 4.32 74.48

availed against Advance Licence Scheme.

h) Other Claims against the Company not acknowledged as debt. 26.10 26.40




2007-2008 2006-2007

3. Capital Commitments 1222.37 1369.12

(Net of Advances of Rs 362.51 lac, Previous year Rs 248.65 lac)

4. Capital Work -in-Progress includes pre-operative expenses pending allocation: -

i) Salary and Wages 23.99 1.13

ii) Power & Fuel 23.02 8.03

iii) Miscellaneous Expenses 31.21 0.22

iv) Interest on Term Loan 239.25 121.82

Add Brought Forward from previous year 163.97 32.77

Total carried forward 481.44 163.97

Rs in lac

(Rs In Lac)

As at As at

31st March 2008 31st March 2007

i) In respect of a derivative transaction with Kotak Mahindra Bank Ltd.(the bank) 404.18 Nil

the Company has challenged its validity and legality. The matter is sub-judice.

Based on the legal advice, the contract is void and not tenable.The loss in

respect of above on mark to market basis is indeterminable. The claims

raised (periodic) by the bank is for Rs 404.18 lac.

j) Corporate Guarantee to bank/ government authorities given on behalf of 3235.00 5735.00

Somany Foam Limited. (P.Y. Rs 3235 lac on behalf of Somany Foam

Limited and Rs 2500 lac on behalf of an Associate Company).

k) In respect of Neemrana plant a notice has been received from civil court filed

by creditors of Haryana Sheet Glass Ltd. demanding their outstanding

payments and stating that plant cannot be transferred unless their dues are

paid.However the matter is sub-judice.

l) Counter Guarantee furnished to Government and other authorities on behalf

of following companies:

(i) SPL Ltd. NIL 12.00

(ii) Glass Equipment (India) Ltd. (Subsidiary Company) 381.00 381.00

m) Surety given to Sales Tax department. 50.75 50.75

Notes: On the basis of current status of individual cases and as per the legal advice obtained,wherever applicable the

management is of the view that no provision is required in respect of these cases.

Further cash outflow in respect of b) to k) is dependent upon the outcome of final judgements / decisions.

5. During the year the Company has acquired all the Fixed Assets and Inventories (excepting finished goods) of glass unit situated

at Neemrana of Haryana Sheet Glass Limited for a total consideration of Rs 2500 lac. Allocation of cost on Plant and Machinery

has been carried out on the basis of the value determined by the approved valuer, Land and Buildings on the basis of the

consideration paid and Inventories as estimated by the management.

6. In respect of Fixed Assets acquired from Larsen &Toubro Limited by the erstwhile Ace Glass Containers Limited, under the Business

Transfer Agreement, which are estimated to have lower residual lives than that envisaged as per the rates provided in Schedule

XIV of the Companies Act 1956, depreciation has been provided based on the estimated shorter residual lives as follows:




2007-2008 2006-2007

8. Payment to Statutory Auditors:*

i) Audit Fees 9.38 3.38

ii) Tax Audit fees 1.60 1.30

iii) Management Services and Certification work 2.00 1.75

iv) Reimbursement of Expenses 0.73 0.52

* excluding Service Tax

Rs in lac

Rates as prescribed by Rates of

Particulars of Fixed Assets Schedule XIV to the Depreciation on

Companies Act, 1956 assets applied

Buildings (other than factory buildings) 3.34 5.21

Factory Buildings 1.63 2.04

Plant and Machinery

Used for single shift operations 4.75 11.44

Continuous Process Plant 5.28 11.44

Used for Triple Shift operations 10.34 11.44

Direct Fire Glass Melting Furnace working on Triple Shift Operations 16.21 16.21

Furniture & Fixtures 6.33 17.37

Vehicles 9.50 9.50

Computers 16.21 17.95

These assets originally acquired by the erstwhile Ace Glass Containers Limited

(AGCL) and vested to the Company pursuant to the Scheme of Amalgamation.

The practice of charging depreciation on these assets is consistently followed.

7. (i) Land and Buildings of Rishra and Bahadurgarh unit were revalued by an 3337.19 3337.19


net amount transferred to Revaluation Reserve Account.

(ii) During the year Land and Buildings of Rishra and Bahadurgarh unit were 7554.80 NIL

revalued by an approved valuer on 31.03.06 on current replacement cost

basis. Accordingly, net amount transferred to Revaluation Reserve Account.

(iii) Plant and Machinery of Rishra and Bahadurgarh unit were revalued by an 4831.31 4831.31



(iv) Plant and Machinery of GEIL unit were revalued by an approved valuer 499.96 Nil

on 01.04.2007 on current replacement cost basis. Accordingly,


(v) Depreciation transferred from Revaluation Reserve Account to 281.21* 237.98

Profit and Loss Account.

* Include Rs 116.43 lac for the year ended 31.03.2007




2007-2008 2006-2007

9. Sundry Creditors include Acceptances 392.14 NIL

10. Earning per share

Profit after Tax 16038.10 3435.69

Number of shares outstanding 17467713 11043368

Earning per share (Basic and Diluted) 91.82 31.11

11. Financial and Derivative Instruments

a) The Company has entered into certain currency swap transaction, the cash flows

arising there from are recognised in the books of accounts as and when the

settlements takes place in accordance with the terms of the respective contracts

over the tenure thereof. All derivative and financial instruments acquired by the

Company are for hedging purpose only.However, in pursuance of announcement

dated March 29, 2008 of The Institute of Chartered Accountants of India on

"Accounting for Derivatives" loss on account of derivative transaction as on

March 31, 2008 stood at Rs 313.94 lac as estimated by the management, arising

from hedging transaction undertaken by the Company has been provided for.

b) Outstanding particulars of derivative instruments ( CY: One deal with regard 3993.25 1755.48

to option trade in US $ 4 million, Two deals with regard to Currency Swap in

CHF 5.93 million; PY: One deal with regard to Currency swaps in US$ 2 million,

One deal with regard to option in EURO 1.5 million)

c) Foreign currency exposure outstanding as on March 31, 2008 which has not

been hedged by the derivative instruments

Loans (CY: US $ 23.18 million; PY: US$ 16.92 million ) 9297.11 7372.02

Creditors (CY: US $ 3.47 million, EURO 0.58 million, GBP 0.20 million, 1779.73 1368.24

AUD 0.002 million; PY: US $ 1.97 million , EURO 0.88 million)

Debtors (CY: US $ 1.51 million; PY: US $ 0.32 million) 1069.01 137.92

d) Net Gain / (Loss ) on account of exchange difference adjusted to the carrying Nil 54.80

amount of fixed assets / capital work -in -progress.

e) The amount of Exchange Gain / ( Loss) on foreign currency transaction 310.07 3.17

adjusted to respective heads of accounts of the Profit and Loss Account.

12. a) Electricity duty waiver benefit under West Bengal Incentive Scheme 2004 and Nil 30.52

subsidy received under The West Bengal Incentive to Power Intensive

Industries Scheme 2005 has been credited to Power & Fuel Account.

b) Amount included in VAT Credit Inputs Account shown under Loans and 411.40 301.01

Advances can be utilised only after repayment of corresponding amount of

Sales Tax Deferred Loan.

Rs in lac




14. Disclosure pursuant to clause 32 of the Listing Agreement

Outstanding Maximum balance

as on 31.03.2008 outstanding

during the year

1) No interest or interest below the rates specified in section 372 A 23.88 23.88

of the Companies Act, 1956*

2) Repayment beyond seven years or no repayment schedule Nil Nil

3) Repayment on Demand 4500.00 4528.84

4) Loan to Associate Nil Nil

5) Investment by Associates Nil Nil

* Notes:

1. Pertains to advance to various employees pursuant to general business practice and employees welfare.

2. Interest free advances in the nature of loans and advances given to employees as per general rules of the Company have not

been considered.

13. i) The breakup of deferred tax assets and deferred tax liabilities is as given below : (Rs in lac)

Opening as on (Charge)/ Credit Closing as at

01.04.2007 during the year 31.03.2008

Deferred Tax Assets

Business Losses and Unabsorbed Depreciation 1956.04 1956.04

Expenses Allowable on Payment basis 186.00 668.88 854.88

Difference in valuation of inventories 21.74 9.79 31.53

Total Deferred Tax Assets 207.74 2634.71 2842.45


Depreciation and related items 4797.06 (109.60) 4687.46

Total Deferred Tax Liabilities 4797.06 (109.60) 4687.46

Net Deferred Tax Assets / (Liabilities) (4589.32) 2744.31 (1845.01)

ii) During the year the Company has provided Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and

accordingly, based on evidences MAT Credit of Rs 1367.57 has been recognised in these accounts.

15. Investment by the loanee in the shares of the Company:

None of the loanees have, per se, made investments in shares of the Company. The investments represent share of the

Company held by these companies prior to the loans granted to these companies.

Name of the Company No. of Shares Loans (Rs lac)

1) Noble Enclave and Towers Pvt. Ltd. 1533544 1800.00

2) Topaz Commerce Ltd. 1299816 1800.00


16. During the Year, the Company has incurred Rs 7.91 lac (previous year Rs 3.20 lac on account of Research and Development

expenses, which has been charged to Profit and Loss Account.

17. As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard

are given below:

i. Effective 1.4.2007, the Company has adopted revised Accounting Standard 15 on “Employee Benefits” notified in the

Companies (Accounting Standards) Rules, 2006. The effect of transitional liability of Rs 78.23 lac (net of tax of Rs 40.28 lac)

on account of gratuity and Rs 40.40 lac (net of tax of Rs 20.80 lac) on account of leave pay as required by AS-15 has been

adjusted to opening balance of General Reserve of the Company.

ii. The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards)

Rules, 2006, are given below:


Contribution to Defined Contribution Plan, recognised for the year are as under: (Rs in Lac)



Employer’s Contribution to Superannuation Fund 14.89



by the employers needs to be treated as “Defined Benefit Plan”. According to the management, in consultation to the actuary,

it is not practical or feasible to actuarially value the Provident liability in the absence of any guidance from Actuarial Society of

India and also due to the fact that the rate of interest as notified by the Government can vary annually. Accordingly, the

Company is currently not in a position to provide other related disclosures as required by the aforesaid AS – 15 read with ASB

guidance. However, with regard to the position of the fund and confirmation to the Trustees of such fund, there is no shortfall

as at year-end.


The employees’ gratuity fund scheme managed by Birla Sun Life Insurance is a defined benefit plan. The present value of

obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period

of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the

final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.



I. Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances

thereof are as follows: (Rs in lac)



Liability at beginning of the year 613.63 588.57 153.56


Interest Cost 49.86 52.62 59.65

Actuarial (Gain) / Loss 48.40 59.43 (2.48)

Benefits paid 54.27 26.31 38.52

Liability at the end of the year 710.07 726.88 203.48




IV. Balance Sheet reconciliation (Rs in lac)



Opening Net Liability (11.84) 588.57 150.97

Expenses as above 86.34 164.62 86.21

Employers Contribution 49.36 26.31 36.94

Amount Recognised in Balance Sheet 25.14 726.88 200.24

V. Compensated Absences

The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the

Company as at March 31, 2008 is Rs 203.48 lac.

VI. Principal Actuarial assumptions at the Balance Sheet Date (Rs in lac)



Mortality Table LICI 1994-1996 LICI 1994-1996 LICI 1994-1996

Discount rate (per annum) 8.50% 7.50% 8.50 % / 7.50 %

Expected rate of return on plan assets (per annum) 8.00% 8.00% Nil

Rate of escalation in salary (per annum) Nil 5.00% 5.00%

The estimates of rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion

and other relevant factors including supply and demand in the employment market. The above information is certified by the

actuary.




III. Expense recognised in the Income statement (Under the head “Contribution to provident and other funds” – Refer Schedule Q)

(Rs in lac)




Interest Cost 49.86 52.62 59.65

Expected Return on plan assets 50.04 Nil Nil

Net Actuarial (Gain) / Loss to be recognised 34.07 59.43 (2.48)

Expenses recognised in Profit and Loss account 86.34 164.62 88.44

II. Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:

(Rs in lac)

Gratuity (Funded)



Actuarial Gain / (Loss) 14.33


Benefits paid 54.27

Fait value of plan assets at the end of the year 684.94





18. The accounts of some of the customers are pending reconciliation / confirmation and the same have been taken as per the

balances appearing in the books. A provision of Rs 991.53 Lac is carried in the books against doubtful debts and the management

is of the opinion that the same is adequate and no further provision is required there against.

19. In the opinion of the Management/Board of Directors, the “Current Assets, Loans and Advances” have a value on realisation in

the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

20. Loan to Bodies Corporate include Rs 4500 lac with Companies in which directors of the Company are interested as members/

directors. These loans were given by the erstwhile AGCL and none of the directors of the Company was director in the erstwhile

AGCL and accordingly, as advised legally, the provisions of section 295 of the Companies Act, 1956 are not applicable with regard

to these loans.

21. Export benefits, Insurance and other claims have been accounted for on accrual basis on acceptance / ascertainment of amount

thereof .Profit or loss on sale of raw materials and stores has been adjusted in consumption.

22. Stores and Spare Parts consumption includes materials consumed for repairs and replacement

23. Stores and Spare Parts also includes items, which are lying since earlier years. A provision of Rs 618.03 lac towards obsolescence

is carried in the books and management is of the opinion that the same is adequate and no further provision is required there

against.

24. Related Party disclosure as identified by the management in accordance with the Accounting Standard 18 (AS 18) of Companies

(Accounting Standards) Rules, 2006.

(i) Associates

- Ace Glass Containers Limited (since amalgamated with the Company)

(ii) Directors and Relatives

- Mr C. K. Somany – (key management personnel)

- Mr Sanjay Somany – (key management personnel)

- Mr Mukul Somany – (key management personnel)

- Mrs Amita Somany – (key management personnel)

- Mr Bharat Somany - Management Trainee ( Relative of Key Management Personnel)

(iii) Enterprises over which any person described in (ii) above is able to exercise significant influence:

Ceramic Decorators Limited

HNG Float Glass Limited

Hasow Automation Limited

Microwave Merchants Private Limited

Mould Equipment

Noble Enclave & Towers Private Limited

Rungamattee Trexim Private Limited

Somany Foam Limited

Spotme Tracon Private Limited

Segment Mercantile Pvt. Limited

Topaz Commerce Limited




Disclosure of transaction between the Group and Related parties and status of outstanding balances as on 31st March, 2008

(Rs in lac)

Current Year Previous year

Associates Directors Entities over Associates Directors Entities over

and their which Directors and their which Directors

relatives and their relatives relatives and their relatives

have influence have influence

24(i) 24(ii) 24(iii) 24(i) 24(ii) 24(iii)

Income

Sales of Goods 559.85 0.02

Sales of Investments

Sales of Fixed Assets 1.05 59.79

Rent Received 13.20 9.60

Interest Received 47.27 59.18 57.39

Services 1.53

Expenses

Purchases 25.59 139.67 70.64

Purchase of Assets 1.33 2.94

Services 301.14 158.69 243.31

Remuneration 271.27 225.38

Sitting Fees 0.01 0.02

Interest Paid 9.84

Investments 4.73 4.73

Borrowings and Lendings

Lendings 4500.00 5514.00 516.51

Borrowings 64.00

Trade Deposit

Guarantee / Corporate Guarantee

Given 3235.75 2500.00 3235.75

Taken

Outstandings

Receivables 4528.88 138.54 517.69

Payables 83.66 4.42 1146.43

25. a) The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Block of Buildings

and Vehicles. The lease term is 75 years for Building. The lease term is 3 years for Vehicles, after which the legal title will pass

on to the Company. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum

lease payments payable in future at the balance sheet date and their present value are as under There is no escalation clause

in the lease agreement for vehicles.:

(Rs in lac)

Particulars Lease payments Present value

Not later than one year 18.36 16.39

Later than one year and not later than five year 19.99 63.60

Later than five year 45.24 1.74


b) Assets taken under operating leases:

Office premises and office equipments are obtained on operating lease. There is no contingent rent in the lease agreements.

The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in

the lease agreements. There are no restrictions imposed by lease agreements. There are no sublease and all the leases are

cancelable in nature. The aggregate lease rentals are charged as “ Rent ” in Schedule ‘Q’ of the financial statement.

26. Amalgamation of Ace Glass Containers Limited

(i) Pursuant to Scheme of Amalgamation and reorganisation of capital (the Scheme) under Section 391 to 394 of the Companies

Act 1956, with effect from 1st April 2006 (the Appointed Date), Ace Glass Containers Limited (AGCL) has been merged with

the Company. The erstwhile AGCL is engaged in manufacturing and selling of container glass.

The Scheme was sanctioned by the Hon’ble High Court at Calcutta vide its Order dated 07.04.2008 and by the Hon’ble High

Court at Delhi vide its Order dated 19.03.2008. The Scheme became effective on 28 April 2008.

The amalgamation has been accounted for under the purchase method as prescribed by Accounting Standard 14 on “

Accounting for Amalgamation” as notified by Companies (Accounting Standards) Rules, 2006. Pursuant to the Scheme:

a) The assets, liabilities, rights and obligations of erstwhile AGCL have been vested with the Company with effect from 1st

April 2006. All assets and liabilities (other than fixed assets and investments) of erstwhile AGCL have been recorded at their

respective values as appearing in the books of the erstwhile AGCL as on 31.03.2006. All fixed assets and investments of

the erstwhile AGCL have been recorded at their fair values as of the appointed date..

c) (i) Out of 149901400 Equity Shares held in erstwhile AGCL 74950700 equity shares were cancelled as provided in the

Scheme and carrying cost of such shares amounting to Rs 7.55 lac has been adjusted against the General Reserve

of the Company.

(ii) The erstwhile AGCL had carried on all its businesses and activities for the benefit of and in trust for, the Company from

1st April 2006. Thus the Profit or Income accruing or arising to erstwhile AGCL or expenditure or losses arising or

incurred by it from 1st April 2006 are treated as expenditure or loss, as the case may be of the Company.



b) Following adjustments have been carried out in respect of assets and liabilities of erstwhile AGCL

Particulars Rs in lac Rs in lac

Assets (other than Fixed Assets and Investments) taken over at book value 45073.95

Fixed Assets and Investments taken at Fair Value 41415.13

Total Assets as recorded in the books of the Company 86489.08

Less : Book value of Liabilities as on 31.03.2006 23074.66

Excess of Assets over liabilities taken over by the Company (a) 63414.42

Debit Balance in Profit and Loss Account as on 31.03.2006 23977.55

Less : Capital Reserve 5046.30

Balance of Loss adjusted from (a) above (b) 18931.25

Net Balance after adjustment as above (a - b) 44483.17

Less:

Issue of Equity Shares (Share Suspense Account) 642.43

Securities Premium Account vested 12449.54 13091.97

Balance transferred to General Reserve of the Company 31391.21


The losses of the erstwhile AGCL for the year ended 31st March 2007 have been deducted from the General Reserve of

the Company. Current year’s transactions of the erstwhile AGCL have duly been incorporated in the current year under the

respective heads of accounts of the Company.

d) 6424345 number of Equity Shares of Rs 10 each of the Company relating to the Equity Share Capital of the erstwhile AGCL

as on 01.04.2006 have been issued 1 (one) equity share as fully paid up against 35 fully paid Equity Shares held by the

members of the erstwhile AGCL. The face value of such shares issued subsequent to the Balance Sheet Date have been

shown as “ Share Capital Suspense” .

e) 2141448 numbers of Equity Shares to be issued by the Company in lieu of 74950700 number of Shares held by the Company

in the erstwhile AGCL, will be transferred to a trust for the sole benefit of the Company. Accordingly, the cost of the aforesaid

investments of the Company has been included in “ Beneficial Interest in Shares held by HNG Trust" under Investments..

f) (i) 1368872 numbers of Shares of the Company held by the erstwhile AGCL have been transferred to a trust for the sole

benefit of the Company. Accordingly, Rs 6009.35 lac being the fair value of the aforesaid shares have been included in

“Beneficial Interest in shares held by Ace Trust ' under Investments.”

(ii) Pursuant to the sanctioned scheme Rs 31391.21 lac has been transferred to General Reserve. The said amount as per

generally accepted accounting practices would otherwise had been added to the Capital Reserve.

(iii) In view of the aforesaid amalgamation with effect from 01.04.2006, the figures for the previous year are not comparable

with figures for the Current Year.

(iv) In terms of the Scheme, Rs 83.19 lac being expenses attributable to the implementation of the Scheme incurred by the

Company have been adjusted against the General Reserve of the Company.

27. a) Segments have been identified by the Company in line with the Accounting Standard on Segment Reporting (AS-17), taking

into account the organisational structure as well as the different risk and returns of these segments. Details of these segments

are as below:

Glass Container - Manufacturing and selling of Glass Bottles and Tumblers.

Glass Machines - Manufacturing and selling of Glass Forming Machines, Spares and providing related services.

Minerals - Purchase, Processing and sale of Silica Sand and Feldspar.



Current year

(Previous year) Rs in lac

Reportable Segments Glass Glass Minerals Eliminations Total

Containers Machines

I REVENUE

External Sales/services 102129.69 782.90 102912.59

(51886.09) (768.50) (59.26) (52713.85)

Inter-segment sales/services 1008.03 237.06 (1245.09)

(419.36) (115.19) (-534.55)

Total Revenue 102129.69 1790.93 237.06 102912.59

(51886.09) (1187.86) (174.45) (-534.55) (52713.85)




Current year

(Previous year) Rs in lac

Reportable Segments Glass Glass Minerals Eliminations Total

Containers Machines

II RESULTSegment result 13924.75 228.15 9.14 (164.83) 13997.21

(6697.53) (49.58) (10.01) (-47.20) (6709.92)Other expenses net of unallocable income (486.90)

(-135.63)Operating profit 14484.11

(6845.55)Interest expenses (2371.90)

(-1949.22)Interest income 79.74

(253.22)Profit from ordinary activities 12191.95

(5149.55)Net profit 12191.95

(5149.55)Income Tax-Current (167.47)

(-1531.13)Income Tax-Deferred 2683.19

(-163.48)Income Tax-FIT (38.20)

(-19.25)Mat Credit 1367.57

–Profit after tax 16037.04

(3435.69)III OTHER INFORMATION

Segment assets 132447.86 1862.47 101.37 (1100.24) 133311.46(57469.59) (1883.25) (124.39) (-307.85) (59169.38)

Unallocated corporate assets (130.20) 16388.36(-135.82) (4096.49)

Total assets 149699.82(63265.87)

Segment liabilities 54086.50 896.13 49.46 (715.29) 54316.80(26728.44) (531.92) (24.42) (-87.88) (27196.90)

Unallocated corporate liabilities (65.00) 8436.62(-70.29) (12107.76)

Total liabilities 62753.42(39304.66)

Capital expenditure 20659.67 539.93 (128.25) 21071.35(8696.38) (65.40) (-34.42) (8727.36)

Depreciation 7012.76 84.11 0.20 (6.63) 7090.44(3312.45) (88.01) (0.22) (3400.68)




b) Secondary Segment Reporting (by geographic segment)

The following table shows the distribution of the Company’s Consolidated Sales by geographical market, regardless of

where the goods were produced:

Sales Revenue by Geographical Market (Rs in lac)

Particulars 2007-2008 2006-2007



Total 115000.57 60715.88

Sundry Debtors: The following table shows the distribution of the Company’s Consolidated debtors by geographical

Market: (Rs in lac)

Particulars 2007-2008 2006-2007



Total 16456.51 9009.65

28. Figures are expressed in Rupees lac and have been rounded off to the nearest thousand.

29. Previous Year's figures have been re-grouped and/or re-arranged wherever considered necessary to conform to the current year's

classification.




H. K. Verma



June 25, 2008


Corporate Information

ChairmanC. K. Somany

Managing Director Sanjay Somany

Jt. Managing Director Mukul Somany

Directors Kishore Bhimani

Sujit Bhattacharya

R. K. Daga

Dipankar Chatterji

S. K. Bangur

Supriya Gupta

I.K. Saha (Dr.)

Chief Financial OfficerR. R. Soni

Company Secretary Priya Ranjan

AuditorsLodha & Co., Chartered Accountants

Registered office 2, Red Cross Place

Kolkata 700 001

WorksRishra

Bahadurgarh

Rishikesh

Pondicherry

Nashik

Neemrana

Banks/Financial InstitutionsState Bank of India

HDFC Bank Limited

The Hongkong & Shanghai Banking Corporation Limited

ICICI Bank Limited

Export Import Bank of India

ABN Amro Bank N.V.

Yes Bank

Documents

A BOTTLE INTO A BRAND - Hindusthan National Glass ...A BOTTLE INTO A BRAND Hindusthan National Glass & Industries Limited 2 Red Cross Place, Kolkata- 700 001 ... in connection with