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Hindusthan National Glass and Industries Directors Report, Hind Nat Glass Reports by Directors
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Hindusthan National Glass and Industries
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Download Annual Report PDF Format 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '13    Mar 12
Dear Members,
 
 The hereby present Annual Report together with the Audited Accounts of
 our business and operations for the year ended March 31, 2013.
 
 Financial Highlights
 
                                               Rs.in lacs
 
                                       For the 
                                       year ended    For the 
                                                     year ended 
 Particulars                           March 31, 
                                       2013          March 31, 
                                                     2012
 
 Gross sales (including 
 excise duty)                           198,430       203,205
 
 Profit before interest, 
 depreciation and tax                    15,569        30,390
 
 Interest and finance charges            20,357         9,233
 
 Profit / (Loss) before 
 depreciation and tax                    (4,788)       21,157
 
 Depreciation                            19,831        11,652
 
 Profit / (Loss) before tax             (24,619)        9,505
 
 Provision for tax                       (7,439)          419
 
 Profit / (Loss) after tax              (17,180)        9,086
 
 Balance brought forward 
 from previous year                      10,287         5,961
 
 Provision for proposed 
 dividend including Dividend
 
 Distribution Tax written back  
 Forgo of right to
 receive Dividend by HNG 
 Trust and Ace Trust                        255          255
 
 Transfer from Debenture Redemption Reserve            2,500
 
 Transfer from General Reserve            6,740 
 
 Amount available for appropriation         102       17,803 
 
 Appropriation
 
 Amount transferred to General Reserve                 1,000
 
 Amount transferred to 
 Debenture Redemption Reserve             5,000
 
 Proposed dividend                           87        1,310
 
 Tax on dividend                             15          206
 
 Balance carried forward to the next year             10,287
 
 
 Review
 
 The financial year under review was mixed year for your Company. The
 Company has successfully commissioned the world''s largest container
 glass furnaces with a capacity of 650 TPD at its Nashik and Naidupeta
 units but the financial performance of the Company suffered due to
 challenging environment.  The year saw GDP dropping to ~5% and people
 have started cutting on discretionary spending which has affected the
 consumption and also had an impact on demand for glass. The performance
 was further impacted due to higher interest and depreciation cost
 coupled with initial stabilisation cost for the new plants. In this
 challenging environment, your Company reported a total income of Rs.
 183,188 lacs in 2012-13 compared to Rs. 189,474 lacs in 2011-12. Your
 Company recorded an EBIDTA of Rs. 15,569 lacs and a net loss of Rs. 17,180
 lacs during the year under review.
 
 During the current financial year, your Company has given major thrust
 on strengthening its existing internal control and on implementation of
 various cost saving measures, the effect of which would be visible in
 coming quarters. Your Company will continue to give importance to the
 same in the coming years also.  Some of the main initiatives proposed
 for the financial year 2013-14 are as follows:
 
 (i) Development of alternate source for electricity;
 
 (ii) Increase in production efficiency;
 
 (iii) Development of alternate source and vendors for procurement of
 raw materials;
 
 (iv) Increasing usage of cullet;
 
 (v) Waste reduction;
 
 (vi) Enforce quality checks;
 
 Dividend
 
 Your Directors recommend a dividend of 5% i.e. Rs. 0.10 per equity share
 of Rs. 2 each for the year 2012-13 . The total outgo as dividend,
 including applicable tax, this year is Rs. 101.75 lacs.
 
 Outlook
 
 Despite economic turmoil in many parts of the world, the global market
 for glass packaging continues to ride on the back of the brisk consumer
 demand. A report published by Visiongain in December 2012 puts the size
 of the global glass packaging industry at $ 36.8 billion and predicts
 that this will nearly double over the next twenty years growing at an
 annual rate of 5.8%.  Growing affluence, high disposable income and
 increase in consumption of alcoholic beverages is expected to drive the
 glass packaging sector, particularly in developing markets.
 
 Glass packaging currently accounts for only about 8%
 
 of overall Indian packaging demand. However, it is one of the fastest
 growing segments due to its popularity in some of the fastest growing
 consumer sectors. As per CRISIL''s Report, Glass Industry will grow at a
 CAGR of over 16-17% and it is expected to reach Rs. 104 billion by
 2014-15. The beverages segment is the largest end- user of glass
 bottles, accounting for over two-thirds of total demand, with alcoholic
 beverages alone accounting for half. Except in the last year, when
 economic activity slowed significantly, the demand for glass containers
 has been enjoying double digit growth as part of the Great Indian
 Consumption Story. On the supply side, 80% of the production is
 controlled by top 8 players, with HNGIL as the leader.
 
 Directors & Company Secretary
 
 Shri Chandra Kumar Somany and Shri Ratna Kumar Daga, Directors of the
 Company are liable to retire by rotation at the ensuing Annual General
 Meeting and being eligible, have offered themselves for re-
 appointment. Your Directors recommend the re-appointment of aforesaid
 Directors.
 
 Shri Venkatesan Sridar, has resigned from the Directorship of the
 Company w.e.f. May 30, 2013. The Board of Directors placed its deep
 appreciation for the valuable guidance and assistance rendered by him
 during his tenure as Director of the Company.
 
 Shri L. N. Mandhana, CFO & Company Secretary relinquished the post of
 Company Secretary on the close of business hours on December 31, 2012.
 Mr. Mandhana will continue to work as CFO of the Company. Shri Ajay
 Kumar Rai was appointed as Company Secretary of the Company w.e.f.
 January 1, 2013.
 
 Shri Sanjay Somany & Shri Mukul Somany are re- appointed as Vice
 Chairmen & Managing Directors of the Company for a period of three
 years w.e.f. April 1, 2013 and Shri Rakesh Kumar Sharma is re-appointed
 as Executive Director of the Company w.e.f. March 1, 2013 for a period
 of two years as per the provisions of Schedule XIII and shall be paid
 remuneration subject to the approval of Shareholders and Central
 Government.
 
 Trust Shares
 
 Pursuant to amalgamation of Ace Glass Containers Limited with the
 Company, 21,41,448* shares and 13,68,872* shares having face value of Rs.
 10 each (corresponding to 1,07,07,240 and 68,44,360 shares having face
 value of Rs. 2 each) were issued to HNG Trust and Ace Trust respectively.
 At present HNG Trust & Ace Trust are holding 7,797,240 & 6,844,360
 shares respectively. In terms of an undertaking given to the Bombay
 Stock Exchange, the Company is required to make disclosures pertaining
 to utilisation of proceeds of shares allotted to the said Trusts until
 they are extinguished. During the financial year 2012-13, 143,35,000
 shares in aggregate were pledged by both the Trusts for the loan
 availed by the Company of Rs. 190 crores from Axis Bank Ltd., L&T Finance
 Ltd. and Aditya Birla Finance Ltd. for meeting its capital expenditure.
 
 *The Company''s shares were sub-divided from Rs.10 per share to Rs. 2 per
 share w.e.f. November 13, 2009.
 
 Fixed Deposits
 
 Your Company did not accept any deposits from the public within the
 meaning of section 58A of the Companies Act, 1956 during the financial
 year 2012-13.
 
 Consolidated Financial Statements
 
 Consolidated Financial Statements have been prepared in accordance with
 Accounting Standard 21 read with Accounting Standard 23 issued by the
 Institute of Chartered Accountants of India and forms part of this
 Annual Report and accounts in accordance with disclosure made in
 respect thereto in the Notes on Financial Statements No. 2.1 to 2.38.
 
 Auditors'' Report
 
 The Auditors Report contains the following observation:
 
 As stated in Note no. 2.35.1 of the financial statements regarding
 remuneration paid/payable to the Vice Chairmen & Managing Directors and
 Executive Director in excess of the limits laid down in the Companies
 Act, 1956 aggregating to Rs. 579.43 lacs awaiting Central Government
 approval and further the appointment / remuneration of Rs. 4.76 lacs of
 the Executive Director for the period March 1, 2013 to March 31, 2013
 is subject to approval of Shareholders in the ensuing General Meeting
 and Central Government.
 
 Due to inadequate profit during the financial year the Company has paid
 Rs. 4.76 lacs as excess remuneration to its Executive Director. The
 necessary application has already been made to the Central Government
 for obtaining approval for the payment of remuneration to Shri Rakesh
 Kumar Sharma for the period April 1, 2012 to February 28, 2013 and to
 Shri Sanjay Somany & Shri Mukul Somany for the period April 1, 2012 to
 March 31, 2013. The application is pending for approval and your
 Directors presume that the necessary approval will be received during
 the financial year 2013-14.
 
 Annual Listing Fees
 
 The Company''s shares continue to be listed at the
 
 National Stock Exchange of India Limited, the Bombay Stock Exchange
 Limited and The Calcutta Stock Exchange Limited. The annual listing fee
 for the year 2013-14 has been paid to all these exchanges.
 
 Auditors
 
 M/s Lodha & Company, Chartered Accountants, Registration No. 301051E,
 Statutory Auditors of the Company are retiring at the conclusion of the
 ensuing Annual General Meeting and have confirmed their eligibility and
 willingness to accept the office of the Statutory Auditors, if
 re-appointed. It has been confirmed by M/s Lodha & Company that they
 have subjected themselves to peer review process of the Institute of
 Chartered Accountants of India (ICAI) and they hold a valid certificate
 issued by the Peer Review Board of the ICAI.
 
 M/s Singhi & Company, Chartered Accountants, Branch Auditors of the
 Company''s three units namely Nashik, Puducherry and Rishikesh will also
 retire at the conclusion of the ensuing Annual General Meeting and have
 confirmed their eligibility and willingness to accept the office of the
 Branch Auditors, if re-appointed.
 
 The Board of Directors recommend re-appointment of the aforesaid
 Auditors.
 
 Cost Auditors
 
 In respect of financial year 2012-13, your Company had appointed M/s N.
 Radhakrishnan & Co., Cost Accountants as Cost Auditors of the Company
 for maintenance of cost records. The Cost Auditor Report was filed by
 the Cost Auditor within the due date.
 
 Directors'' Responsibility Statement pursuant to Section 217(2AA) of the
 Companies Act, 1956
 
 The Directors hereby confirm that:- I) In preparation of the annual
 accounts for the financial year 2012-13, applicable Accounting
 Standards have been followed along with proper explanations relating to
 material departures.
 
 II) They 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 for the year ended on March 31, 2013 and of the profits of
 the Company for the said financial year.
 
 III) They took proper and sufficient care to maintain adequate
 accounting records in accordance with the provisions of the Companies
 Act, 1956 for safeguarding the assets of the Company and for preventing
 and detecting fraud and other irregularities.
 
 IV) They prepared the annual accounts on a going concern'' basis.
 
 Corporate Governance
 
 The Company has been practising the principles of good governance with
 a view to achieve transparent, accountable and fair management. The
 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 forms a part of this Annual Report.
 
 Subsidiary Companies
 
 As on March 31, 2013, your Company has three subsidiaries namely:
 Quality Minerals Limited, Glass Equipment (India) Limited and HNG
 Global GmbH.
 
 Pursuant to the General Circular No. 2/2011 issued by Ministry of
 Corporate Affairs, granting general exemption to the companies from
 attaching annual accounts of the subsidiary companies, the Board of
 Directors in its meeting held on May 30, 2013 has given its consent for
 not attaching the Balance Sheet of its subsidiaries.
 
 Shareholders of the Company as well as of the Subsidiary Companies who
 are interested in obtaining annual accounts of the Subsidiary Companies
 and related detailed information may write to the Company Secretary at
 the Registered Office of the Company.  These documents will be
 available during business hours for inspection by the Shareholders of
 the Company and of the Subsidiary Companies at the Registered Office of
 the Company and at the Registered Offices of its subsidiaries.
 
 Consolidated Financial Statement of the Company and its three
 subsidiaries duly audited for the year ended March 31, 2013 forms part
 of the Annual Report of the Company.
 
 Exports
 
 During the year, direct export turnover was Rs. 14,031 lacs compared to Rs.
 7,687 lacs during the preceding year.
 
 Personnel and Industrial Relations
 
 Your Company is consolidating the human resource operations and the
 internal systems to enhance the operations of the Company. The Human
 Resource team is very active as it recruits and retains the existing
 talent pool of the Company. It is continuously involved in manpower
 planning, forecasting and conducting regular workshops to enhance the
 skill sets. Cordial industrial relations resulted in efficient
 production at all the plants of your Company.
 
 Statement of employees
 
 Statement of particulars of employees as required under section 217(2A)
 of the Companies Act, 1956 and rules framed there under forms a part of
 this Annual Report.
 
 Conservation of energy, technology absorption and foreign exchange
 earnings and outgo
 
 The statements 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 a part of this report.
 
 Corporate Social Responsibility
 
 Sustainable development is an integral part of HNGIL Group''s business
 philosophy. The Group has always believed in creation of wealth for its
 stakeholders. As a responsible Corporate, HNGIL is focused on the
 happiness of people living in its larger neighboring communities. We
 are also committed to the best industry standards in Health, Safety and
 Environment. The best safety equipment has been deployed at the
 critical locations and constant supervision is also done to maintain
 the highest safety standards. Our CSR team works towards improving the
 living conditions of the underprivileged and makes a positive
 difference in their lives. A number of focused initiatives have been
 implemented near the plant locations.
 
 Acknowledgments
 
 Your Directors wish to express their gratitude and appreciation for
 assistance, co-operation and encouragement extended by all Investors,
 Financial Institutions, Banks, Government Authorities, Customers,
 Vendors and Employees during the year and place on record their deep
 sense of appreciation for the committed services of their executives,
 staff and workers for an overall performance of the Company.
 
                               For and on behalf of the Board
  
                               Chandra Kumar Somany
 
                               Chairman
 
 Place: Kolkata 
 
 Date: May 30, 2013
Source : Dion Global Solutions Limited
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