The Directors present their Eleventh Annual Report and the Statement of
Accounts of the Company for the year ended March 31, 2002.
1 Financial Results
Rs. Lakhs Rs. Lakhs
Sale of products and other income 24,617.95 20,059.72
Gross Profit before Depreciation and Interest 4,812.58 3,749.02
Depreciation 2,779.45 2,699.78
Interest 1,596.06 2,372.96
Profit/(Loss) before Tax 437.07 (1,323.72)
Profit/(Loss) carried forward to the
Balance Sheet 437.07 (1,323.72)
The Company produced 26.60 million converted square metres (mcsqm) of
float glass on an average converted 2 mm basis of various thicknesses
and sizes during the year 2001-2002 as against 22.87 million converted
square metres in the previous year.
3.1 During the year under review, the Company sold a total of 26.15 msm
of float glass on an average converted 2mm basis against 21.99 msm of
glass in the previous year, which also included Bronze/Grey/Green
3.2. The Company's glass both of Clear and Tinted variety has been very
well accepted in the market. Inspite of significant continuing
oversupply situation on account of further addition to glass capacity
and intense competition, the Company registered gross sales growth of
25% over that of the previous year.
3.3 Export sales during the year amounted to around Rs.3568.68 Lakhs as
against Rs.2,133.19 Lakhs in the previous year reflecting an increase
of 67%. The international prices of float glass remained stable during
the year. M/s. ASAHI GLASS SINGAPORE PTE LTD, Singapore has assured us
of their continued support in exporting of glass to the extent
4.0 Turnover and Profits:
The income for the year 2001-2002 was higher at Rs. 24,617.95 Lakhs as
against Rs. 20,059.72 Lakhs for the previous year on account of higher
volume of export sales and better sales realisation in domestic market.
The profit after depreciation and interest was Rs. 437.07 Lakhs as
against loss of Rs.1323.72 Lakhs for the previous year, mainly on
account of better realisation in domestic market, improved product-mix,
reduction in interest/finance costs and aggressive cost cutting
measures in all areas of operation.
4.2 The accumulated losses of the Company as at March 31,2002, stood at
Rs.13, 311.52 Lakhs. As such, in terms of Section 23 of the Sick
Industrial Companies (Special Provisions) Act 1985 (SICA), the Company
remains a 'Potentially Sick' Company as its accumulated losses continue
to be more than 50% of its peak net worth during the immediately
preceding five financial years. Notwithstanding the heavy accumulated
losses, as also the erosion of more than 50% of its net worth, as a
result of measures taken in hand, such as reduction in Preference Share
Capital through financial restructuring by way of restructuring of
foreign currency loans and cost reduction measures, substitution of
high cost borrowings with low cost funds, better operational
efficiency, etc. FGI has now emerged as a strong player in float glass
5.0 Share Capital
With a view to improve the financial position of the company, the
company in consultation with Asahi Glass Co. Ltd., (AGC), Japan has
cancelled Rs.143.5 crores of Preference Share Capital held by Asahi
Glass Co. Ltd., Japan out of the existing Preference Capital of
Rs.149.50 crores thereby reducing the accumulated losses by a similar
amount. The entire Preference Share Capital is held by AGC. AGC has
agreed for cancellation of Preference Share Capital of Rs.143.50 crores
and write off the entire amount of cumulative dividend since the issue
of Preference Shares. AGC has further agreed to reduce rate of dividend
to 0.01% on the balance 6,00,000 Preference Shares of Rs.1 00/- each,
aggregating to Rs.6 crores on non-cumulative basis.
5.1 The members in the Extraordinary General Meeting held on November
5, 2001, approved the cancellation of Preference Share Capital of
Rs.143.5 crores from Rs.149.5 crores. Subsequently, the company made a
petition before the High Court, Mumbal and which was confirmed by the
High Court on January 16,2002,confirming the reduction of above said
Preference Share Capital. As a result of this, now the Preference Share
Capital is reduced to Rs.6 crores from Rs.149.5 crores. The remaining
Preference Shares of Rs.6 crores will carry a nominal dividend of 0.01%
on a Non cumulative basis and will be redeemable on their respective
dates of redemption in the year 2007 - 2008.
6.1 Asahi Glass Co. Ltd., Japan has extended fresh loan to finance the
repayment of the existing high cost foreign currency loans. The Loan
Agreement has been executed on November 12,2001. As per the terms of
the said Loan Agreement, the said loan will be for a period of 10 years
and will be interest free for the first eight years. This has resulted
in substantial reduction in interest costs in the current year and
helped in improving its financial position.
7. Transfer of Shares by Asahi Glass Co. Ltd. (AGC) Japan to Asahi
India Safety Glass Limited (AIS).
AGC., Japan has entered into an agreement with AIS for sell of 75%
stake in Equity Shares of the company to consolidate its Indian
Operations under AIS. Accordingly, the said shares were transferred by
AGC to AIS on February 6,2002 after completion of Cash Offer of
Equity Shares in accordance with SEBI's Takeover Code. Consequently,
the company has become a subsidiary of AIS and AIS is responsible for
the management of the company. AIS is an existing profit making company
and is the market leader in the Autoglass Industry. AGC holds 24%
equity stake in AIS.
8. Particulars of Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo:
As required 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, the particulars in respect of Conservation of
energy, technology absorption and foreign exchange earnings and outgo
are set out in Annexure 'A' to the Directors' Report.
9. Particulars of Employees
In terms of revised limits set in the Notification dated April 17,2002
of the Department of Company Affairs, no disclosures are required to be
made under section 217 (2A) of the Companies Act, 1956 and Rules made.
10. Personnel During the year under review, industrial relations at all
units of the Company were by and large satisfactory.
11.1 Mr. T.M.M.Nambiar, Mr. N.H.ltalia and Mr. H.H.Malgham, Directors
have resigned from the Board with effect from June 22,2001. Mr.
M.Ichinose, Director has resigned from Board with effect from June
29,2001. The Board has placed on record its sincere appreciation of the
advice and guidance given by all these Directors.
11.2 In the meeting of the Board of Directors held on June 29,2001, Mr.
R.M.Kunzru and Mr. H.D.Daffary were appointed as Directors on Board of
the company with effect from June 29,2001 designated as Executive
Director (T&O) and Executive Director (F&A) respectively for the period
of five years with effect from June 29,2001.
11.3 Mr. H.Moroo has resigned from the Board with effect from August
30,2001. The Board has placed on record its sincere appreciation of the
advice and guidance given by Mr. H.Moroo.
11.4 In the meeting of the Board of Directors held on September
20,2001, Mr. P.L.Safaya was appointed as Additional Director and
subsequently appointed him as Executive Director and Chief Operating
Officer in the meeting of the Board of Directors held on February
6,2002 for the period of five years with effect from February 6,2002.
11.5 Mr. T.Shiraishi, Mr. K.Shikii, Mr. T.Matsuzawa have resigned from
the Board with effect from February 6,2002. The Board has placed on
record its sincere appreciation of the advice and guidance given by all
these Directors. Consequently, Mr. Y.Ohta and Mr. H.Nitta, Alternate
Director to Mr. T.Matsuzawa and Mr. K.Shikii respectively resigned from
the Board with effect from February 6,2002.
11.6 In the meeting of the Board of Directors held on February 6,2002,
Mr. SKawakami, Managing Director was re-designated as the Executive
Director (Corporate Planning, Japanese Affairs and Consultation) in
terms of Share Purchase Agreement dated September 22,2001 between AGC
11.7 In the meeting of the Board of Directors held on February 6,2002
the following appointments were also made.
(1) Mr. Sanjay Labroo was appointed as Additional Director and
subsequently appointed him as Managing Director and Chief Executive
Officer for the period of five year with effect from February 6,2002.
(2) Mr. Arvind Singh was appointed as Additional Director.
(3) Mr. Rajesh Mukhija was appointed as Additional Director.
11.8 In the meeting of the Board of Directors held on March 28,2002 the
following appointments were made.
(1) Mr. Ratish Ramanujam was appointed as Additional Director.
(2) Mr. Narinder Mohan Thapar was appointed as Additional Director.
(3) Mr. Yashpal Gupta was appointed as Additional Director.
(4) Mr. Narendra Kumar Sharma was appointed as Additional Director.
11.9 Mr. SKawakami and Mr. H.Shioi, Executive Directors resigned from
the Board with effect from July 29,2002. The Board has placed on record
its sincere appreciation of the advice and guidance given by them.
11.10 In accordance with the provisions of the Companies Act, 1956 and
the Company's Articles of Association Mr. R.M.Kunzru, retire by
rotation and being eligible, offer himself for reappointment. 12.
The shareholders are requested to appoint Auditors for the current
year. M/s. Deloitte Haskins & Sells - Chartered Accountants, Mumbai,
the existing Auditors have under Section 224(1 B) of the Companies Act
1956 furnished a certificate of their eligibility for the appointment.
13. Depository Details:
As at March 31,2002, 84.67% of Shares of the company are
14. Director's Responsibility Statement Your Directors confirm:
i) that in the preparation of accounts for the year ended March 31,
2002, the applicable Accounting Standards had been followed and there
are no material departures;
ii) that the selected accounting policies have been applied
consistently and judgements and estimates have been reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2002 of the profits of the Company for the
year ended on that date;
iii) that proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and
preventing and detecting fraud and other irregularities;
iv) that the accounts for the year ended March 31, 2002 are on a
15. Corporate Governance: Your company and its Board has been complying
with Corporate Governance to the extent set out in this respect as a
separate report, in pursuance of requirements of Clause 49 of the
Listing Agreement. The Management Discussion and Analysis Report forms
part of this report. Auditors Certificate regarding compliance of the
conditions of Corporate Governance is also attached to the report.
16. Acknowledgment Your Directors take this opportunity to express
their grateful appreciation for the excellent assistance and
co-operation received from Shareholders, Asahi Glass Company Limited,
Asahi India, Bankers and other Agencies. The Directors also thank all
the employees of the Company for their valuable services and continued
support during the year. Annexure 'A' to Directors' Report
STATEMENT PURSUANT TO 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. A) Conservation of Energy:
(a) Energy Conservation measures taken:
1) In house development of circuit for Auto operation of Roller mill.
2) In house development of Electronic circuit in place of conventional
3) Stopping of large dust collector in the Batch house by providing
small dust collector near equipments
4) Modification of Crushing house dust collector.
5) Running of only one rectifier instead of two rectifiers.
6) Running of only one misc. transformer instead of two misc.
7) Running of only one utility transformer instead of two utility
8) Installation of special device on cooling fan to control air flow.
9) Continuous running of two smaller capacity compressors by proper
10) All office air conditioner units controlled through timer from the
month of October to March.
(b) Additional Investments and proposals if any, being implemented for
reduction of energy consumption:
1. Replacement of conventional indication lamp with LED's.
2. Installation of Energy Monitoring System.
3. Installation of Speed control device on Air compressor.
4. Installation of Speed control device on Bottom cooling fan.
(c) Impact of above measures on consumption of energy:
1. Savings in both Thermal & Electrical energy will be achieved.
B. Technology Absorption
Technology for manufacture of clear and tinted Float Glass was
provided by Asahi Glass Co. Ltd., Japan and has been successfully
C. Foreign Exchange Earnings and Outgo.
Current year Previous Year
(1) Foreign Exchange earned 3,568.66 2,133.19
(2) Foreign Exchange used 1,284.78 1,375.57
For and on behalf of the Board
Managing Director &
Chief Executive Officer
Gurgaon: July 29,2002.