hindusthan national glass & industries limited report 2008-09.pdf · schedules and notes 57...

Hindusthan National Glass & Industries Limited 63rd Annual Report 2008-09

Hindusthan National Glass & Industries Limited 2, Red Cross Place, Kolkata – 700001

www.hngindia.com

A [email protected]

Across the pages

Corporate identity 04 How we progressed in 2008-09 08 Growth of our numbers 10Chairman’s thoughts 12 Management statement 20 Corporate responsibility and sustainability 22Directors’ Report 24 Management Discussion and Analysis 32 Report on Corporate Governance 40Auditors’ Report 51 Balance Sheet 54 Profit and Loss Account 55 Cash Flow Statement 56Schedules and Notes 57 Balance Sheet Abstract 77 Section 212 78 Subsidiary Accounts 79Consolidated Accounts 115

This document contains statements about expected future events and

financial and operating results of Hindusthan National Glass & Industries

Limited, which are forward-looking. By their nature, forward-looking

statements require the Company to make assumptions and are subject

to inherent risks and uncertainties. There is significant risk that the

assumptions, predictions and other forward-looking statements will not

prove to be accurate. Readers are cautioned not to place undue reliance

on forward-looking statements as a number of factors could cause

assumptions, actual future results and events to differ materially from

those expressed in the forward-looking statements. Accordingly this

document is subject to the disclaimer and qualified in its entirety by the

assumptions, qualifications and risk factors referred to in the

Management’s Discussion and Analysis Statement of the Annual Report,

2008-09 of Hindusthan National Glass & Industries Limited.

Disclaimer

Corporate information ChairmanC. K. Somany

Managing Director Sanjay Somany

Joint Managing Director Mukul Somany

Executive Director R. R. Soni

Directors Kishore Bhimani

Sujit Bhattacharya

R. K. Daga

Dipankar Chatterji

S. K. Bangur

I. K. Saha (Dr.)

Late Supriya Gupta (upto February 7, 2009)

Chief Financial OfficerNirmal Khanna

Company Secretary Priya Ranjan

AuditorsLodha & Co., Chartered Accountants

Registered office 2, Red Cross Place

Kolkata – 700 001

Phone: 033 2254 3100

Registrar & Share Transfer AgentMaheshwari Datamatics Pvt. Ltd

6, Mangoe Lane (Surendra Mohan Ghosh Sarani)

Second floor, Kolkata – 700 001

WorksRishra

Bahadurgarh

Rishikesh

Puducherry

Nashik

Neemrana

Banks/Financial institutionsState Bank of India

HDFC Bank Limited

The Hongkong & Shanghai Banking Corporation Limited

ICICI Bank Limited

Bank of Baroda

State Bank of Hyderabad

Export Import Bank of India

Life Insurance Corporation of India

Each time our customers are

REPLENISHED.Each time our consumers are

REFRESHED.Each time our employees are

REJUVENATED.Each time our suppliers are

REVITALISED.Each time our shareholders are

REASSURED.

2 | Hindusthan National Glass & Industries Limited

Each time someone turns to… A cola bottle for a drink. A jam bottle for a serving. A medicine bottle for a dose. A champagne bottle for a toast. A health supplement bottle for a dollop.

For being protected by a product designed andmanufactured by HindusthanNational Glass & Industries Limited.The bottle.

Hindusthan National Glass & Industries Limited | 3


A status reflected in its Indian market share of about 65 percent.

A respect reflected in a number of multinational and domestic

customers.

A customer orientation reflected in a sectoral coverage of the

food, pharmaceuticals, liquor, beer and beverage industries.

A robustness of business model reflected in a post-tax profit in

a challenging 2008-09.

HNG is India’s largest containerglass packaging solutionprovider (and among the world’sfastest growing).


VisionTo create a world-class glass

manufacturing plant that pursues

quality, cost reduction and

productivity improvement measures in

a truly holistic manner, leading to

customers’, shareholders’, employees’

and suppliers’ satisfaction; this

integrated effort will result in the

Company becoming an industry

benchmark and a role model for its

systems, processes and results.

PotentialThe world’s population of 6.60 billion

is expected to cross 8 billion in 12

years.

Two things will result.

One, a billion people will graduate to

the robustly consuming middle-class.

Two, urban migration will increase to

nearly 900 million.

The result: An enhanced market of

bottled products.

At HNG, we are preparing for this

growing market through proactive

investments in capacity, portfolio,

presence and efficiency.

Enhancing value for consumers,

community and the country.

IdentityThe HNG Group was promoted by the

Kolkata-based Somany family in 1952

following the commissioning of

India’s first fully-automated glass

manufacturing plant at Rishra (near

Kolkata).

The Company is now the undisputed

leader in India’s container glass

industry with about 65 percent

market share and several global

multinationals among its brand-

enhancing customers.

SpreadThe Company’s pan-India

manufacturing operations are spread

over Rishra, Bahadurgarh, Rishikesh,

Puducherry, Nashik and Neemrana; its

headquarter is located in Kolkata. Its

products are also available in more

than 20 countries.

Asset quality The Company possesses an

operational capacity of 11 furnaces

and 43 production lines with fully-

automated IS machines, sourced

from respected global centres of glass

manufacturers like Europe

and the US.

This asset versatility translated into a

container glass portfolio ranging from

5 ml to 3,200 ml on the one hand

and diverse colours (amber, flint and

green) on the other.


Plant location Installed capacity (MT per day)

Rishra, West Bengal 740

Bahadurgarh, Haryana 655

Nashik, Maharashtra 320

Rishikesh, Uttarakhand 356

Neemrana, Rajasthan 180

Puducherry 290

CertificationsThe Company’s ISO 9000:2000 quality certification resulted in

a dependable product and process consistency. Besides, it is

pursuing ISO 14000/18000/22000 certifications for

comprehensive environmental compliance.

ListingOur shares are listed on the National Stock Exchange, the

Bombay Stock Exchange and the Calcutta Stock Exchange. Our

Company enjoyed a Rs. 724.91 cr market capitalisation as on

March 31, 2009.

Global partnersBatch houses from Zippe (Germany); furnaces from Sorg and

Horn (Germany); Forehearths from Emhart (USA) and PSR

(UK); IS machine control system from Botterro (Italy) and

Futronics (UK); bottle transfer machines from Sheppee (UK)

and Pennekamp (Germany); annealing lehrs from Pennekamp

(Germany) and Carmet (USA); laboratory inspection machinery

from AGR (USA) and bottle printing equipment from Strutz

(USA) and Rosario (the Netherlands).

Key financial metrics* Rs. 1,344.19 cr Rs. 235.91 cr Rs. 107.75 cr

Total income Operating profit Post tax profit

11.68 percent Rs. 475.97 Rs. 5ROCE (average) Book value Proposed dividend

per share per share

*Figures pertaining to 2008-09

CustomersHindustan Unilever, GlaxoSmithKline, Nestle, Koeleman,

Global Green, Heinz and Dabur (foods); Pfizer, Cipla,

GlaxoSmithKline, Reckitt Benckiser, Ranbaxy and Himalaya

(pharmaceuticals); United Breweries, SABMiller, Asia Pacific

Breweries and South Asia Breweries (beer); United Spirits,

Pernod Ricard, Diageo, Radico and Bacardi (liquor) and Coca

Cola and Pepsi (soft drinks).

RANBAXYLABORATORIES LIMITED

8

In the plants Undertook process improvements by upgrading

technology to narrow-neck-press-and-blow (NNPB)

technology to reduce production costs and wastages

on the one hand and strengthen capacity utilisation

on the other

Deployed ERP and SAP to reduce costs and minimise

disruptions in operations

Developed CAD/CAM facilities to design a variety of

bottles in different sizes, customised to the precise

requirements of pharmaceutical, processed foods,

liquor and soft drink industries

In the marketplace Enlisted customers like InBev, Carlsberg and John

Distilleries, among others

Strengthened average realisations through

reengineering and superior service

In the numbers Turnover increased 25.28 percent from

Rs. 1,148.34 cr in 2007-08 to Rs. 1,438.60 cr

Net sales escalated 28.37 percent from

Rs. 1,021.30 cr in 2007-08 to Rs. 1,311.04 cr

EBIDTA strengthened 9.89 percent from

Rs. 214.67 cr in 2007-08 to Rs. 235.91 cr

HOW WEPROGRESSEDIN 2008-09


OUR GLOBALOPERATINGFRAMEWORK

The big picture Emerge as one of the world’s foremost container glass

packaging solution providers

Blueprint to realise the big picture •Strategic priority 1: Grow value of the HNG brand and

widen product portfolio

•Strategic priority 2: Transform our go-to-market model

to improve efficiency and effectiveness

•Strategic priority 3: Attract, develop and retain a highly

talented and diverse workforce

Values

•Accountability

•Customer-focused

•Team-driven

Drive long-termconsistent

sustainable growth

World-class capabilities

•Revenue growth

management

•Supply chain

•Sales and customer

service


Challenging times. Declining offtake.

Total income (Rs. in cr) EBIDTA (Rs. in cr) Post-tax profit (Rs. in cr) Cash profit (Rs. in cr) 20

04-0

5

2005

-06

2006

-07

2007

-08

2008

-09

434.

36

426.

70

521.

84

1,02

8.19

1,34

4.19

75.5

9

73.9

5

103.

25

214.

67

235.

91

31.5

1

23.9

5

34.2

4

160.

34

107.

75

61.4

1

56.7

0

69.2

7

203.

83

182.

49

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09


HNG selected a difficult year to post record numbers.

EBIDTA margin (Percent) Consistent dividendpayout (Percent)

Earnings per share(basic) (Rs.)

Rising book value pershare (Rs.)

Debt-equity ratio (on

long term loans)

16.0

6

15.5

7

17.3

4

18.6

9

16.4

0

0.51

0.58

0.43

0.18

0.36

125.

04

145.

93

175.

80

433.

70

475.

97 7 7 10 40 50

28.5

3

21.6

9

31.0

1

91.7

9

61.6

8

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

12

CHAIRMAN’STHOUGHTS

HNG enjoyed another year of growth and success. We

are proud to be regarded as India’s largest and one of

the world’s leading container glass packaging

companies, manufacturing products that are highly

respected in the marketplace. The HNG brand’s

presence is spread across the Far East, Middle East,

Africa and America. We have worked hard to ensure

that our brand stands for quality and value and

represents the collective teamwork of our employees

worldwide.


Today, HNG is an industry vanguard, thanks to our decades-

rich dedication to the simple principles of giving our

customers what they want, when they want and how they

want. This is what our corporate success has done to us: it has

broadened our mission; it has made us more responsible and

sensitive to customer demands; it has enabled us to firmly

integrate with customer product innovation and development

cycles, and in doing so, deeply embrace the relationship.

This enhanced customer-centricity strengthened our

organisational focus towards market-driving innovations and

transformation. This constancy of purpose will accelerate

global leadership and consequent wealth creation, benefiting

all stake owners.

Changing faster for the betterAt HNG, we believe in a simple dictum: transcendence

through transformation. Transformation as in challenging

conventions; transformation as in embracing business-

impacting change as a condition for forward movement;

transformation as in inculcating a culture of innovation,

defying all odds. At HNG, transformation has brought success

– and success for us necessitates further transformation.

Our transformation has done one more important thing to

us: it has enhanced our commitment quotient – commitment

to our customers, commitment to our employees, and

commitment to the communities around our operational

areas. Our customers have come to expect great products and

services from us, which we are determined to deliver. Our

employees have come to expect a fertile environment in which

they can perform and a management structure that

encourages, nurtures, values and rewards the creative process.

Exploration of the possible – and sometimes the impossible –

will always be encouraged.

There is much uncertainty and unpredictability in the current

global economic scenario, which has adversely affected

people’s lives and ways in which business is being conducted.

As a responsible and conscientious corporate, we are

committed to harness the best available resources for our

products, while upholding the highest standards of quality,

integrity and customer-centricity.

One of our most visible customer-centric achievements in

2008-09 comprised the creation of light-weight container

glass bottles. This was in view of our customers’ need to lower

cost structures in an economy marked by declining consumer

spends. Operational excellence lowered glass intake per tonne

of bottles. A lighter and thinner bottle also offered our

customers several advantages: one, optimum space utilisation

during transportation; two, low transportation and handling

costs; three, better asset and capacity utilisation through

faster bottling operations, reflected in increased frequency of

bottles filled per minute; four, lower wastage and bottle

breakages owing to higher glass strength; and five,

One of our most visible customer-centric achievements in 2008-09comprised the creation of

light-weightcontainer glassbottles.


accelerated product roll-out to meet customer deadlines. Over

2009-10, a complete switchover to the state-of-the-art NNPB

(narrow-neck-press-and-blow) technology will enable us to

further reduce glass consumption per tonne of bottles,

strengthening customer relationships.

Conscientious corporate As we worked towards our goals, we relied on our core

strengths – people, operational excellence, innovation and

integrity – to respond to the rapidly evolving market realities.

Our growth and future prospects depend on customer loyalty,

which we have earned through hard work in the past and

which will continue to determine our road ahead.

In a significant development in 2008-09, which will have a

substantial bearing in 2009-10, the Glass Manufacturers

Association of India, led by HNG, advocated greater consumer

awareness by stamping the glass bottle’s year of manufacture

on the bottle itself, quite similar to information labels stuck

around bottles. This social initiative in terms of strengthening

health and hygiene standards will have a two-fold impact on

our business:

One, enhance cullet (broken glass) availability through

improved old bottle recycling. This initiative will enable

conscious consumers to dispose of old bottles for

recycling, enhancing overall critical raw material

availability.

Two, shorten the bottle reusability cycle substantially

from around 25 times now, growing product demand and

accelerating profitable business growth.

Outlook To retain market leadership, we will continue to cultivate

a culture that does not fear failure. In 2009-10, we are

undertaking container glass capacity increments through a

sizeable expansion in installed capacity.

We invite you to be a part of a Company that is not only

India’s largest, but is strategising to emerge as one of the

world’s largest container glass packaging companies.

Sincerely

CK Somany

Chairman

15

Our growth andfuture prospectsdepend on customerloyalty, which wehave earned throughhard work in the pastand which willcontinue to determineour road ahead.


LOCALLYMANUFACTUREDBOTTLES. GLOBALLYBENCHMARKEDSTANDARDS.

CustomerThe Global Green Company Limited (GGCL) is a part of the

diversified USD 3 billion Avantha Group. GGCL possesses

multiple plants across India and Europe to process gherkins.

Customer objectives GGCL desired to evolve its product sourcing with the following

objectives in mind: indigenise jars complying with

international standards on the one hand and reduce costs on

the other.

Our response HNG designed and developed customised jars in line with the

customer’s needs. It imported new hot-end coating

equipment for the first time in India and revamped its cold-

end coating technology. These proactive investments

translated into a number of benefits: a compliance with

international bottling standards and requirements, coat layer

permanence, enhanced scratch resistance, increased bottle

strength and improved bottle surface lubrication.

Customer benefits The improved product immediately translated into a superior

performance at the customer’s packaging line in the following

ways:

Accelerated production by nearly 40 jars per minute

Enhanced packing line efficiency by over 22 percent

Reduced wastages/bottle loss from 1 percent to less than

0.5 percent

Customer satisfaction“The gherkin jars developed by HNG, helped us achieve

the desired objectives — the quality of jars continues to meet

international standards and line performance has seen a

substantial improvement. We are eager to maintain a steady

long-term relationship with HNG, not only for this line

of products, but other SKUs as well!” Santosh Nair,

17

Vice President, Procurement, Global Green Company Limited*

* Global Green is a multinational food company, engaged in

the growth, manufacture, distribution and sale of pickled

cucumbers (gherkins, cornichons, pickles and relish), sweet-

corn, silverskin onions, peppers (jalapeño and paprika),

cherries, capers and mixed vegetables.

HNG imported new hot-endcoating equipment for the

first timein India and revamped its cold-endcoating technology.

18

ENHANCINGAESTHETICS. OPTIMISINGCOSTS. CustomerThe Coimbatore-based Shiva Distilleries Limited is engaged in the production

of a range of India Made Foreign Liquor with an annual production capacity of

6.6 million cases, leading to a Rs. 405-cr turnover.


Customer objectivesSome time ago, a company approached HNG with the

following needs:

To graduate to a fresh bottle design, optimise line

speeds, improve productivity and reduce marketing time

To strengthen brand equity in a competitive marketplace

Our response HNG responded with the following initiatives: it designed a

180 ml bottle with its principal axis set to enhance bottle

compactness, improved glass distribution, enhanced tensile

strength, reduced breakages and augmented line efficiencies.

Customer benefitsOur customer enjoyed the following benefits:

Improved overall line efficiencies

Reduced wastages

Aesthetically differentiated product, leading to a

competitive edge

Customer speak“The 180 ml bottle developed by HNG helped us meet our

desired objectives. The breakage level for this bottle vis-à-vis a

standard bottle reduced substantially with an overall

improvement in line performance. We look forward to

working on more designs with HNG to improve our brand

equity and achieve cost optimisation benefits.

Dr. S.V. Balasubramaniam, Chairman, Bannari Amman

Group*

*Shiva Distilleries Limited, a part of the Bannari Amman

Group, was established in 1983 at Coimbatore, Tamil Nadu.

The company is engaged in the production of a range of

Indian Made Foreign Liquor (IMFL) and possesses the largest

market share in Tamil Nadu.

HNG designed a 180 ml bottle withits principal axis set to

enhance bottlecompactness,improved glass distribution,enhanced tensile strength etc.

20

MANAGEMENTSTATEMENT The Management of Hindusthan National Glass & Industries Limited discusses how the Company’scustomer focus helped navigate it through the 2008-09 slowdown as well as the road ahead. At HNG, we reported a successful

2008-09 in an environment offinancial and industrial uncertainties,which makes our performance all themore creditable.

At HNG, we believe that it is customer-centricity

that will align us with evolving market

requirements leading to proactive product

development; we believe that it is customer-

centricity that will protect our existing relationships

leading to the prospect of a stable and sustainable

income; we believe that it is customer-centricity

that will enable us to grow our topline and cover

our fixed costs more effectively, leading to

enhanced margins and profits. As a result, we see

customer-centricity as the basic driver of our

leadership position within India’s container glass

industry.

During the last financial year, the biggest challenge

was a decline in the offtake of products

manufactured by our customers leading to a

greater need for them to reduce costs. As a

responsive organisation, we addressed this reality

directly through the development of the narrow-

neck-press-and-blow-technology (NNPB) for

container glass bottles. This advanced container

glass manufacturing technology helped rationalise

bottle weight from 15 percent to 35 percent

without in any way compromising glass

consistency and tensile strength on the one hand.

Much of this benefit was passed on to the

customer. So we would like to state with

We seecustomer-centricity

as the basic driver ofour leadership positionwithin India’s container

glass industry.

21

satisfaction that in a year when the market environment

turned challenging for most companies, HNG helped its

customer emerge more competitive.

In 2007-08, we merged ACE Glass Containers Limited with our

Company, whose full benefit was reflected in the Company’s

working. ACE Glass Containers Limited was the second largest

Indian container glass manufacturer after us with a capacity of

0.37 million TPA across Rishikesh, Puducherry and Nashik. The

merger widened our margin-accretive product portfolio,

enhanced our economies-of-scale and strengthened our

customer service flexibility. This immediately translated into

enhanced visibility. For instance, our Company was ranked

307th among the top 1,000 companies – ranked on the basis

of net sales and other financial parameters – by Business

Standard in March 2009, the only company from our industry

to figure in the list. Our Company was also rated the best

Indian company in the ‘Glass & Ceramics’ category by Dun &

Bradstreet, strengthening our brand.

As a proactive organisation, we have already commenced the

seed marketing of imported float glass under guided technical

specifications through our existing distributor network in

Gujarat, Rajasthan and Madhya Pradesh. We expect to widen

our presence across the rest of western and northern India as

well as exports.

Container glass enjoys its own importance in the packaging

industry, despite the rapid development of packaging

alternatives for an important reason: established environment

friendliness reflected in its biodegradability and recyclability.

We see an attractive scope in our business on account of the

fact that 10–12 percent of all food and beverages are packed

in glass containers in India, whereas the corresponding figure

is 40–50 percent across developed countries. Besides, the

growing awareness on account of benign and hygienic

packaging demand will drive the demand for container glass

over plastic alternatives.

We are passing through a period of economic uncertainty. In

this environment, there will be some local or global acquisition

opportunities around an attractive price-value. We must

apprise our stakeholders that we will address those

opportunities with adequate prudence and entrepreneurial

alertness but only after we are adequately convinced that the

addition will enhance our overall organisational value.

We also expect to complete the implementation of the NNPB

technology across all our manufacturing units. The total

implementation of SAP across our organisation will enhance

accurate information availability and reinforce our customer-

centricity and market-responsiveness.


CORPORATERESPONSIBILITY AND SUSTAINABILITYAT HNG


Our true wealth at HNG is not what is reflected in thesize of our bottomline but in the respect that we evokeamong the stakeholders and communities associatedwith us. This respect is derived from the broadresponsibility of our actions, which makes our businesstruly sustainable for the benefit of all those associatedwith us. The various initiatives to do so comprise thefollowing: grow the HNG brand; expand the productportfolio; improve efficiency and effectiveness; attract,develop and retain a talented workforce and align ouroperating model with the best environmentalstandards.

For each of these priorities, we have developed corresponding focus

areas and aligned those against stakeholder expectations. We are also

working to embed sustainability into our business processes through

various initiatives. We have designated managers – for internal and

external CSR engagement – who work with our subject matter experts to

track progress against our targets and oversee data-gathering process for

reporting purposes. These managers also work closely with our key

external stakeholders to ensure that our efforts are in line with

expectations. We ensure that all our employees complete a training in

ethics; we also ensure that our sales and management representatives

undergo competition law and industry codes training as a part of our

CSR endeavour.

We have focused on four CSR areas – critical to our business and key for

our stakeholders – comprising the following:

Water stewardship Sustainable packaging and recyclingEnergy conservation and climate change Productivity gains and improvements


We are delighted to present the Annual Report together with the audited accounts of our business and operations for the

year ended March 31, 2009.

Financial Highlights

(Rs. in lacs)

Year ended March 31, 2009 Year ended March 31, 2008

Gross sales (including excise duty) 1,43,860 1,14,834

Profit before interest, depreciation and tax 23,591 21,467

Interest and finance charges 4,345 2,347

Profit before depreciation and tax 19,246 19,120

Depreciation 7,474 7,013

Profit before Tax 11,772 12,107

Provision for Tax 997 (3,927)

Profit after Tax 10,775 16,034

Balance brought forward from previous year 1,072 706

Amount available for appropriation 11,847 16,740

Appropriation

General Reserve 7,000 14,850

Debenture Redemption Reserve 1,250 –

Proposed Dividend 873 699

Tax on Dividend 148 9,271 119 15,668

Balance carried forward to the next year 2,575 1,072

DIRECTORS'REPORT


ReviewThere was a revenue growth of 25% during the financial year

2008-09 as against 21% in the last year. PBIT recorded a growth

of 11.51% despite of there being global economic meltdown

and general recession. This is attributable to efficient cost

management and prudent operating practices.

DividendIn view of your Company’s satisfactory performance, the

Directors recommend a dividend of 50% i.e. Rs. 5 per equity

share for the financial year ended March 31, 2009.

OutlookIndia continues to be one of the fastest growing economies of

the world. A number of factors like growing disposable income

coupled with change in the demographic pattern of the

population will help in generating more demand for packaged

goods, hence creating better opportunities for the Company.

Further, the growth in beer, pharma, food, liquor and other

high-end sectors will drive revenue growth and translate into

profitability. Your Company is well-equipped to grow and

prosper with the opportunities associated with expanding

markets. However, your Company faces substitution threats

from PET bottles and other such alternatives.

DirectorsThe Board wishes to place on record its sincere appreciation and

gratitude for the unstinted support and guidance received from

Supriya Gupta who has left for his heavenly abode.

During the year under review, the Board appointed Shri. R. R.

Soni as Executive Director w.e.f. October 27, 2008.

Shri. Kishore Bhimani, Shri. Sujit Bhattacharya and Shri. S. K.

Bangur, retire by rotation and being eligible, offer themselves

for re-appointment.

Trust SharesPursuant to amalgamation of Ace Glass Containers Limited

with the Company, 2141448 shares and 1368872 shares were

issued to HNG Trust and Ace Trust respectively. In terms of

an undertaking given to the Bombay Stock Exchange, the

Company is required to make disclosures pertaining to utilisation

of proceeds of shares allotted to the said Trusts until they are

extinguished. During the financial year ended on March 31,

2009, no shares lying in the account of the Trusts were

disposed off.

Fixed DepositsThe Company did not accept any deposits from the public during

the financial year 2008-09.

Consolidated Financial StatementsConsolidated Financial Statements are prepared in accordance

with Accounting Standard 21 read with Accounting Standard

23, issued by the ICAI and forms part of this Annual Report.

Auditors’ ReportThe Auditors’ Report read with notes to accounts is self-

explanatory. Regarding Auditor’s observation at Point No. 2 of

their report that no approval from the Central Government was

obtained for carrying out transactions with M/s Mould

Equipment, a firm in which the Directors of the Company are

indirectly interested, it is clarified that the Company is already in

process of obtaining the approval of the Central Government.

Listing on the Stock ExchangesDuring the year, the Company’s shares were listed at the

National Stock Exchange (NSE). Besides, the Company’s shares

continue to be listed at the Bombay and Calcutta stock

exchanges respectively.

The annual listing fees for the financial year 2009-10 have been

paid to all these exchanges.

AuditorsM/s Lodha & Company, Chartered Accountants, retire at the

conclusion of the ensuing Annual General Meeting and have

confirmed their eligibility and willingness to accept the office of

the Statutory Auditors for the financial year 2009-10, if re-

appointed.

M/s Singhi & Co., Chartered Accountants, retire at the

conclusion of the ensuing Annual General Meeting and have

confirmed their eligibility and willingness to accept the office of

the Branch Auditors for the financial year 2009-10, if re-

appointed.

Directors’ Responsibility Statement pursuant toSection 217(2AA) of the Companies Act, 1956The Directors hereby confirm that:i) in the preparation of the Annual Accounts for the financial

year 2008-09, the applicable Accounting Standards have been

followed and that there are no material departures;


ii) they have selected such accounting policies and applied them

consistently and made judgments and estimates that are

reasonable and prudent so as to give a true and fair view of the

state of affairs of the Company and of the profit of the Company

for the financial year ended on March 31, 2009;

iii) they have taken proper and sufficient care for the

maintenance of adequate accounting records in accordance

with the provisions of the Companies Act, 1956 for safeguarding

the assets of the Company and for preventing and detecting

fraud and other irregularities;

iv) they have prepared the Annual Accounts on a ‘going concern’

basis.

Corporate GovernanceThe report on Corporate Governance along with the Certificate

of the Statutory Auditors, M/s. Lodha & Co., confirming the

compliance of conditions of Corporate Governance as stipulated

under Clause 49 of the Listing Agreement forms part of this

Annual Report.

Subsidiary companiesParticulars relating to subsidiary companies as required under

Section 212 of the Companies Act, 1956 are annexed hereto

and forms part of this Annual Report. The Consolidated Financial

Statements include the financial information of its subsidiaries.

ExportsDuring the year, direct export turnover of the Company was

Rs. 5,773 lacs, compared to Rs. 4,032 lacs achieved during the

preceding financial year. Continuous efforts are ongoing to tap

the export market for which there exists great potential.

Personnel and Industrial relations Your Company is strengthening and developing human

resources and systems to improve overall efficiency and

motivation. The principal initiatives undertaken by the Company

comprised skill development and acquisition programmes and

yoga classes, to name a few. Industrial relations continued to

remain cordial during the year.

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

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

thereunder, forms part of this Annual Report.

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

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

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

Rules, 1988 are annexed hereto and forms part of this report.

Corporate Social ResponsibilityYour Company endeavours blending optimally its business

senses with corporate care and instill an utmost commitment to

social responsibilities either directly or through its affiliates.

Your Company has established at Bahadurgarh, the Bal Bharti

School where not only the children of the Company’s employees

are benefited but also those residing in peripheral areas of the

Bahadurgarh Plant. It has also promoted healthcare benefits by

contributing to corpus funds of hospitals and setting up special

programs viz. eye testing campaigns, heart treatment for

children etc. Parks and gardens such as the McPherson Square,

now called Maharana Pratap Udyan in South Kolkata are

continuing to be maintained by the Company to provide an

environment where citizens can relax and take in fresh air amidst

the city’s chaos.

Social responsibility and social accounting remain at the core of

your Company’s business model.

AcknowledgmentsThe Directors wish to express their sincere appreciation for the

continued support and co-operation received from the financial

institutions, banks, government authorities, customers,

shareholders and stakeholders. The Directors also place on

record their deep appreciation for the valuable contribution of

its employees at all levels and look forward to their continued co-

operation in realisation of the corporate goals in the years

ahead.

For and on behalf of the Board

Kolkata C. K. SomanyJune 20, 2009 Chairman


Information pursuant to Section 217(1)(e) read with Companies

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

Rules, 1988 and forming a part of the Directors’ Report for the

year ended March 31, 2009.

I. Conservation of EnergyEnergy conservation measures taken 1. Increased power factor from 0.97 to 0.99 by installing the

Capacitors.

2. Energy savings by routing dry air to Furnaces.

3. Side Insulation done to reduce LPG consumption.

4. Construction of stand by Thickner in Sand Plant for water

conservation by recycling the used water.

5. Replacement of 250 watt High Power sodium vapor Lamp

with 108 watt CFL Lamp.

6. Your Company contemplates making such investments as and

when suitable to reduce energy consumption. The material

impact of such measures on the production cost therefore

cannot be quantified at this stage.

ANNEXURE TO THE DIRECTORS’

REPORT

FORM - ADisclosure of particulars with respect to Conservation of Energy

Particulars Unit Year ended 2008-09 Year ended 2007-08

A. Power and fuel consumption

1. Electricity

a) Purchased unit 000 KWH 1,75,513 1,52,102

Total amount Rs. in lacs 6,638.21 5,424.10

Average rate/unit Rs. 3.78 3.57

b) Own generation

Through diesel/H.P.S oil / Furnace oil

By generator unit 000 KWH 27,059 17,531

Units per litre of oil 3.91 4.31


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

By generator unit 000 KWH – 15,490

Units per litre of oil – 3.73

Average rate/unit Rs. – 4.81

d) Own generation (through LNG)

By generator unit KWH 5,06,64,690 4,25,44,484

Units per litre of MMBTU of LNG 103.72 106.64


2. F-oil /RFO

Quantity KL 76,409 51,809


Average rate/unit Rs. 25,127 19,025


Particulars Unit Year ended 2008-09 Year ended 2007-08

3. L.N.G.

Quantity MMBTU 1,20,365 17,12,334


Average rate/unit Rs. 298 234

4. i) L.P.G.

Quantity MT 9,473 8,421



ii) L.D.O.

Quantity KL – 7.54

Total amount Rs. lacs – 2.29

Average rate/unit Rs. – 30,348

iii) H.S.D.

Quantity KL 127 1,477

Total amount Rs. in lacs 41.79 425.29


iv) H.P.S. oil

Quantity KL 116 20,882

Total amount Rs. lacs 33.83 4,439.64


B. Consumption per unit of production

Glass containers and tumblers MT 7,67,971 6,91,359

Electricity KWH 330 329

L.P.G. KG 12.34 12.18

L.D.O. LTR 0.00 0.01

F-Oil/ RFO / Equv.Oil LTR 99.50 74.94

LNG MMBTU 1.57 2.48

H.S.D LTR 0.17 2.14

H.P.S. LTR 0.15 30.20

Notes:

1. The Company manufactures only container glass.

2. Variation in consumption of power and fuel is attributable to enhanced production capacity.


FORM B

II. Disclosure of particulars with respect totechnology absorption A. Research and Development (R&D) Research & Development continues to remain a focal point inour efforts towards improvement. Energy consumption andabsorption have been principal areas of action. As the Companydoes not have any exclusive R&D facilities, it carries out itsdevelopmental activities for process innovation and productdevelopment as a part of its business process.

Benefits DerivedAs a result of Company’s continuous growth in Research &Development, there had been reduction in cost of production.

Future plans of actionThe Global Economic scenario makes the year aheadchallenging. The Company is relying on its innovative strengthsin the face of challenges to create strong differentiators for itscustomers.

Your Company will continue to invest in R & D activities toenhance productivity and operational efficiency to create savingsfor its customers and increase its profitability.

Expenditure on R&DDuring the year, expenditure incurred on Research andDevelopment are as enumerated below:

(Rs. in lacs)

2008-09 2007-08

a. Capital – –

b. Recurring 38.26 7.91

c. Total 38.26 7.91

d. Total R & D expenditure as a percentage of the turnover Insignificant Insignificant

B. Technology Absorption, Adaptation and InnovationYour Company continues to focus on daily innovations in shapeand quality of its product and in energy saving devices. To namea few, the initiatives taken by the Company and the benefitsderived therefrom in the year under review are:

Two IS Machines which were replaced with latest AIS triplegob 12 section Machine, optimised Plant performance.

Two New Vacuum Pumps which were installed improvedquality and productivity.

Automatic Moisture Measurement System installed in batchhouses for measurement and correction of silica sand moisture.

On line Oxygen Measurement and Automatic FO/ CombustionAir Ratio Correction System from STG, were installed to conserveFurnace oil consumed.

Developed its top geared CAD/CAM facilities to design bottlesin various shapes customised to the requirements ofpharmaceutical, cosmetic, processed food, liquor and soft drinksindustries.

Modern ERP application software like SAP is being installed toreduce cost and minimise disruptions in the Company’soperations.

III. Foreign Exchange Earnings and OutgoYour Company has taken initiatives to strengthen its strategicpresence globally by constantly accessing new sale avenues inoverseas markets of Bangladesh, USA, South Africa, Kenya,Australia, Hong Kong, to name a few. During the financial year2008-09 the Company had recorded an increase in export byRs. 17.41 Crores. The foreign exchange earnings and outgo ofthe Company is detailed below

(Rs. in lacs)

Current year Previous year

(i) Earnings in foreign exchange 5,772.77 4,032.46(excluding indirect exports of Rs. 6,538.14 lacs; previous year Rs. 3,009.80 lacs and exports to Nepal Rs. 1,419.95 lacs; previous year Rs. 169.19 lacs)

(ii) Expenditure incurred in foreign exchange

1. Raw materials 6,489.33 5,698.52

2. Capital goods 5,131.73 1,939.26

3. Components, spare parts 4,894.01 1,497.50and repairs

4. Other expenses 384.84 272.24


Kolkata C. K. SomanyJune 20, 2009 Chairman


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

Somany (Joint Managing Director) as Chief Executive Officers (CEO) of the Company. Further, w.e.f. February 20, 2009 Mr. N. Khanna

was appointed as the Senior Vice President (Finance) & Chief Financial Officer (CFO) of the Company.

We, Sanjay Somany, Managing Director; Mukul Somany, Joint Managing Director and Nirmal Khanna, Sr. Vice President (Finance)

and Chief Financial Officer, responsible for the finance function certify that-

(a) We have reviewed the Financial Statements and the Cash Flow Statement for the year ended March 31, 2009 and to the best of

our knowledge and belief:

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

be misleading;

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

Standards, applicable laws and regulations.

(b) To the best of our knowledge and belief, no transactions entered into by the Company during the financial year ended March

31, 2009 are fraudulent, illegal or violating the Company’s code of conduct.

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

effectiveness of internal control systems of the Company pertaining to financial reporting. Deficiencies in the design or operation of

such internal controls, if any, of which we are aware have been disclosed to the Auditors and the Audit Committee and steps have

been taken to rectify those deficiencies.

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

(i) That there has not been any significant change in internal control over financial reporting during the year under review;

(ii) That there has not been any significant change in accounting policies during the financial year 2008-09 requiring disclosure

in the notes to the financial statements; and

(iii) That during the year under review, we are not aware of any instance of significant fraud and involvement therein of the

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

Nirmal Khanna Mukul Somany Sanjay Somany

Senior Vice President (Finance) Joint Managing Director Managing Director

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

Kolkata

June 20, 2009

CEO & CFO Certification


Particulars of Employees in Terms of Section217(2A) of The Companies Act, 1956

Sl. Age Qualification Date of Designation Gross Last Employment

No. Name (Years) & Experience Appointment (Nature of Remuneration held (Designation)

in years Duties) (Rs.)

1 Mr. Sanjay Somany 50 B. Com. Dip. 01.10.2005 Managing 1,35,01,378 Glass Equipment

In Diesel Engg. Director (India) Ltd.

29 years (To Manage the (Managing Director)

affairs of the

Company on day

to day basis)

2 Mr. Mukul Somany 43 B. Com (Hons.) 01.10.2005 Jt Managing 1,37,73,534 None

22years Director (To manage

the affairs of the

Company on day

to day basis)

3 Mr. R. R. Soni 50 B.Com (Hons) 27.10.2008 Executive Director 26,33,585 Grasim Industries Ltd.

F.C.A. (Sr. Vice President)

27 years

Notes:

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

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

3. Mr. R. R. Soni who was designated as Sr. President & Chief Financial Officer, was appointed as the Executive Director w.e.f. from

October 27, 2008.

4. All appointments of the above employees are contractual.


Kolkata C. K. Somany

June 20, 2009 Chairman


MANAGEMENTDISCUSSION

AND ANALYSIS

Indian packaging industryIndian packaging industry is estimated at US$ 14 billion and

growing at a rate of more than 15% annually. These figures

indicate a change in the industrial and consumer set up.

The Indian fascination for rigid packaging remains intact.

It is estimated that more than 80% of the total packaging in

India constitutes rigid packaging, the oldest and the most

conventional form of packaging. The remaining 20% comprises

flexible packaging.

India's per capita packaging consumption is less than US$ 15

against world wide average of nearly US$ 100.

The large and growing Indian middle class, along with the

growth in organised retail in the country, are driving demand in

the packaging industry. Another factor, providing substantial

stimulus to the packaging industry, is the rapid growth of

exports, requiring superior packaging standards for the

international market. [Source: IBEF]

Container glass industry OverviewThe Indian container glass market is estimated at 320 million

euro accounting for 12% of the packaging industry. The market

for container glass has been growing at a rate of 8% over the

last five years. The demand in the container glass industry is

driven by a growth in end-user segment like processed foods

(FMCG), beverages, beer, liquor, pharmaceutical and retail.

World glass container per capita consumption (Kg.)

Advantage glassEnvironment friendly

Natural product

Lowest pollution (total life cycle) – emissions at various recycling

levels are lower in glass compared to aluminium and PET

Light and convenient

Inertness to heat

Inertness to ultra-violet rays

Visibility of product

Lowest cost (per life cycle)

Longer re-cyclability

Versatility of design


Growth driversGrowing food processing industryThe Indian food market, according to the 'India Food Report

2008', is estimated at over US$ 182 billion, and accounts for

about two thirds of the total Indian retail market. Further,

according to consultancy firm McKinsey, the retail food sector in

India, is likely to grow from around US$ 70 billion in 2008 to

US$ 150 billion by 2025, accounting for a large chunk of the

world food industry. This would grow from US$ 175 billion to

US$ 400 billion by 2025, driving the demand for packaging

alternatives, especially glass containers. [Source: IBEF]

Increasing rural consumptionThe FMCG industry in India was worth around US$ 16. 03 billion

as on August 2008, and the rural market accounted for a robust

57% share of the total FMCG market in India, overtaking the

urban market (43%). The rural per capita consumption of

FMCGs would equal to current urban levels by 2017. Industry

analysts also expect the FMCG sector in rural areas to grow 40%

against 25% in urban. [Source: IBEF]

Growing beer consumption The Indian beer industry has been witnessing steady growth of

7-9% per year over the last 10 years. The rate of growth

remained steady in recent years, with volumes passing from

mere 70 million cases in 2002 to 155 million cases in 2008. The

Indian beer market is dominated by strong beers (>5% alcohol

by volume), which accounts for 70% of the total beer industry.

The premium beer market is a mere 5% of the total but this

segment is rapidly expanding, touching a growth rate between

35-40%. As a result, the demand for container bottle will surge.

[Source: All India Brewers’ Association]

OutlookThe Indian economy is projected to achieve a sustainable GDP

growth of around 6.5% whereas the annual growth of the

packaging industry is expected to double to around 20-25%.

The container glass industry, which grew at a compounded

annual growth rate (CAGR) of 8% over five years, is expected to

grow over 8% in the future. [Source: IBEF]

The demand for container glass will grow on account of the

forecasts that packaging material for beverages will mainly be of

glass, especially for high quality packaging. Glass container plants

will improve technology levels to produce thin and light-weighted

bottles. Beer bottles should be made in more specifications,

meeting the demands of customers at various levels. Based on

the analysis of the current market demands at home and abroad,

tubular vials for antibiotic use will increase gradually, although

injection vials will still remain in the greatest demand.

Business driver – 1

Raw material resource management At HNG, corporate sustainability is derived from an ability to

steady raw material cost structures across various market cycles

either by tying up with new vendors or through acquiring lease

rights. The Company’s principal raw materials comprises sand

(quartz), limestone (calcite), cullet (broken recyclable glass), soda

ash, dolomite and feldspar. Soda ash prices constituted 49

percent of the total raw material cost (value wise), followed by

cullet (25 percent), sand (12 percent) and other raw material

(14 percent). The Company’s priority in this regard continued

an emphasis on modest raw material cost combined with

anytime availability leading to efficient, uninterrupted

The recycling loop

Glass recyclingSave energy in manufacturing for each tonne of cullet

(recyclable glass) used, energy consumption is reduced by 2.5%

Reduces emissions (including CO2)

Preserves raw materials and landscapes

Each tonne of cullet used means1 tonne less of land fill

Over 1 tonne less of natural resources depletion


production at all times.

Highlights, 2008-09Leveraged a decades-rich relationship with soda ash vendors

like Magadi (East Africa), Tata Chemicals, Gujarat Heavy

Chemicals and Nirma leading to stable supplies

Widened supply sources through the enlistment of a chemical

soda ash supplier from Iran

Imported around 50 percent of its annual soda ash

requirement of 100,000 tons

Hedged against unforeseen supply disruptions through an

average 20 days inventory for raw materials available in vicinity

of 250 kms and 30 days inventory for other critical raw materials

Reinforced the price-value proposition through relatively stable

raw material sourcing despite price revisions

Used natural soda ash over chemical soda ash with a

corresponding price advantage of around 10 percent

Road aheadTo increase quantity of imported Soda Ash from 50% to 70%

Proposed entry into long-term (annual) contracts with vendors

leading to win-win situations

Proposed organised cullet collection from vendors, improving

availability

Proposed optimisation of logistic costs through silica

procurement from captive mines located within 250 km of each

plant (Prospecting Licenses applied for)

Business driver – 2

Manufacturing and operationsAt HNG, our competitive edge is derived from an ability to

service the growing needs of customers. In turn, this advantage

is derived from its position as the largest Indian container glass

manufacturer with planned growing capacities.

Rishra

Automatedbatch-mixingfacility

ISmanufacturinglines

On-site bottleprinting facility

On-site mouldrepair shop anddesign facility

Amber, flintand green glassmanufacturer

Nashik

One Furnace

IS manufacturinglines

On-site bottleprinting facilitywith threedecorating lines

Mould workshopfor product designand manufacture

Neemrana

Onefurnace

Puducherry

One furnace

Fully automatedbatch-mixing facility

On-site printingfacility with threedecoration lines

On-line automatic OI inspection machines

On-site modernfinished goodswarehouse

Sand beneficiationplant, foundry andmould workshop

Bahadurgarh

Three furnaces

IS manufacturinglines

On-site bottleprinting facility withfour decorating lines

Foundry and mouldworkshop

100% energy feedthrough captive powergenerating facility

Amber, flint andgreen glassmanufacturer

Rishikesh

Two furnaces

Furnace II usedfor Green glassmanufacture

Off-site printingfacility with threedecorating lines

Our six manufacturing facilities


Highlights, 2008-09Implemented vacuum pumps in production lines, enhancing

output rate, quality and energy efficiency.

Added a booster in a Bahadurgarh furnace, enhancing

capacity and reducing power consumption.

Reduced bottle weight on an average 15 percent through

innovative redesign; the weight of 180 ml mcd-1 bottles

declined 13 percent from 217 grams to 189 grams, 377 mcd-1

bottles declined 15 percent from 352 grams to 300 grams, 750

mcd bottles declined 16.08 percent from 628 grams to 527

grams, pickle bottles declined 7.50 per cent from 200 grams to

185 grams and glucose bottles declined 10 percent.

Drove continuous change in container bottle design,

developing new products.

Introduced Japanese technology to shrink job change and

stabilisation time, enhancing capacity utilisation

Commenced hot end and cold end coating through lubrication

for scratch resistant bottle manufacture, which increased bottle

strength and longevity

Developed new moulds and casts to reinforce moulding and

casting operations

Changed mould metal mix from cast iron to Minox (bronze),

which increased machine speed, enhanced quality and reduced

defects

Virtually eliminated storage breakage from an erstwhile 0.1

percent through efficient pallet stacking.

Implemented ERP to integrate operations, planning and

decision-making.

The science of light weighting Existing bottle glass is analysed

Analysis result leads to conclusion of how much weightreduction is possible

Bottle design is drawn such that during forming, no glassdistribution related issues should arise; should have asmoothened profile making blowing easier and increasingforming efficiency

Once the design is approved engineering commences andsample mould casting is sent for

Internal trial is conducted (bottle performance check in thelines)

Customer approval is sought

After approval receipt, commercial production commences

Road ahead

Proposed implementation of the vacuum pump across allproduction lines by 2009-10

Proposed capacity expansion by 50 tonnes and 100 tonnesthrough the re-building of Bahadurgarh furnaces in 2009-10

Proposed Rs. 170 cr capacity expansion from 600 TPD to 800-850 TPD in 2009-10, estimated to operationally break-even by2010-11

Proposed commercialisation of narrow-neck-press-and-blow(NNPB) operations across all plants leading to enhanced lightweighting by 25–30 percent

Projected commissioning of Rs. 600-cr greenfield float glassmanufacturing facility in Vadodara (Gujarat) by September2009

The benefits of light weighting Consumer benefit Company benefit

Enhanced availability Faster production rate (productivity increased by 8–10 percent)

Reduced transportation cost Optimum raw material use

Accelerated bottling process Overall cost reduction

Increased bottles per ton Increase in profitability

Reduced price per bottle

Improved bottle quality

Enhanced bottle transparency

Increased strength following uniform and optimum wall thickness


Business driver – 3QualityAt HNG, quality is not an intangible virtue, but represents the

convergence of all product attributes to enhance durability and

progressively evolve from breakdown-maintenance to preventive

maintenance philosophy.

The Company’s ISO 9000:2000 certification vindicates its quality

brilliance, catering to customer specifications with inspection

across 140 defect parameters, which are well within customer

tolerance levels.

Highlights, 2008-09Tightened supervisory control on job change to enhance

product quality

Received ISO 22000 certification for food safety management

systems for the Rishra and Puducherry plants

Implemented three Six Sigma projects on quality

improvements

Conducted extensive research on customer requirements

to obtain data on quality, packaging, light weighting,

bottling speed and pressure, capping facility, etc; around 50

customer plants were visited to provide superior quality and

customisation.

Formed a six-member team for pre-dispatch inspection (PDI)

ensuing packaging inspection and proper loading.

Road aheadCommence more Six Sigma projects for further quality

enhancements

Automate quality inspection for quality excellence

Start ‘clean room production’ for pharmaceutical bottles,

complying with US-FDA norms

Business driver – 4Marketing and distributionAt HNG, dependability is derived from an ability to demonstrate

container glass packaging options that are superior than

competing companies and packaging alternatives on

the one hand as well as making timely product deliveries

on the other, leading to customer delight. This ability is derived

from an ongoing quest for R&D-driven excellence and plant

positions in customer-proximate locations - a holistic delivered

solution.

Highlights, 2008-09Enhanced net value of revenue from customers

Enhanced quality designs, service and value-for-money, driving

overall sales volume by 10 percent

Accelerated bottle light-weighting, reducing material and

logistic costs

Customised products and widened the product mix,

strengthening the customer experience

Successfully addressed the design challenge for the

sophisticated ‘Gorbatschow’ liquor bottle

Added several brand-enhancing clients like Carlsberg and John

Distilleries, among others, to its formidable customer list.

Enhanced its global footprint through a deeper presence in

Europe, Asia and America

Road aheadProposed market share expansion through product

development, bottle light-weighting and enhanced NNPB

product proportion in the corporate portfolio

Increased export share through an entry into new geographies

as well as a consolidation in the existing ones

Proposed increase in installed capacity by around 14 percent

to service growing market and consumer needs

Business driver – 5Safety, health and environment At HNG, manufacturing process involves several operations

which can adversely impact employee safety, employee health

and the surrounding environment, warranting investments in

safety equipment, processes, practices and people. The

Company deputed a professionally qualified safety, health and

environment officer in each of its manufacturing facilities.

Highlights, 2008-09Conducted monthly training programmes on safety aspects

Commenced the water re-cycle plant in which effluent water is

chemically treated for gardening, cullet washing and other jobs.

Implemented several effluent control devices to reduce water

pollution

Enhanced the number of fire extinguishers in the factories

Conducted first-aid training programmes by St. John

Ambulance at the Rishra plant


Introduced repellents for enhanced hygiene

Conducted yoga classes for employees and their families

Road aheadBecome a zero discharge company

Enhance focus on air pollution control by the implementation

of modern devices

Focus on better housekeeping

Business driver – 6Information technology platform At HNG, robust IT infrastructure facilitates time-critical and

proactive decision-making. HNG undertook the following

initiatives to remove its IT infrastructure bottlenecks:

Highlights, 2008-09Implemented SAP in Rishra, Bahadurgarh, Puducherry and

Nashik plants, involving a Rs. 15-crore investment; the platform

encompassed financial management, material management,

production planning, plant maintenance and quality

management to enhance organisational integration and

performance

Set up the SAP central site at the Bahadurgarh plant and a

disaster recovery site at the Rishra plant

Improved the speed of network devices – from 10/100 mbps

to 1,000 mbps – at the Bahadurgarh plant for accelerated

communication

Road aheadIntroduce human resource management under the SAP

platform

Bring the Neemrana and Rishikesh plant under the SAP

platform

Improve network devices for all plants

Introduce window deployment services (WDS) in all plants for

faster IT operations

Business driver – 7Talent managementAt HNG, the most enduring capital is the sum of our people

qualifications, experience and enthusiasm, reflected in a rich

tradition of innovation, re-engineering, productivity and people

retention.

Highlights, 2008-09Possessed a 2,997-member team on direct pay roll and around

3,582 contracted employees (as on March 31, 2009)

Added 400 members in 2008-09 to service its growing

capacity and customer requirements

Maintained a prudent mix of vigour and experience

Sustained employee retention and attendance at rates higher

than industry standards

Strengthened its training based on departmental assessments,

imparted by in-house experts and also external faculty.

Strengthened its performance appraisal framework (employee

rating from 1 to 100 across parameters) linking performance

with incentives.

Road aheadProposed recruitment of about 60 engineers and management

trainees from premier Indian institutions like the National

Institute of Technology (NIT), Jadavpur University, Bengal

Engineering College, Roorkee University, Delhi Engineering

College, the Institute of Chartered Accountants of India and

Indian Institute of Management followed by a month’s

induction training

Proposed annual appraisal by departmental heads based on

KRAs communicated at the year-start

Proposed introduction of a performance-linked incentive

scheme for senior employees


Managing uncertainties at HNGRisk is the uncertainty about events and their possible outcome that can impact performance and prospects. At HNG, our objective

is to reinforce a culture of responsible risk management at all levels and functions so that risks can be estimated, controlled and

countered.

Nature of risk Risk explanation Risk mitigation

Economy risk Slowdown in key downstream sectors The Company caters to multiple sectors (processed food,

could affect demand for the Company’s beverages, beer, liquor, pharmaceuticals and organised retail)

products leading to a diversified income portfolio.

The Company caters to the top 10 companies in respective

sectors, outperforming the industry average

The container glass industry grew 12 percent from Rs. 4,000

cr in 2007-08 to around Rs. 4,500 cr in 2008-09 and this

growth is expected to sustain

Competition risk Growing competition (organised and The Company retained its position as India’s largest container

unorganised players) could affect growth glass player with a market share in excess of 65 percent market

Accelerated bottle light weighting to benefit consumers

Widened the product portfolio to address a broader

client base

Profitability risk Profitability could be affected on The Company improved its average realisations from

account of declining realisations, Rs. 14,678 per tonne in 2007-08 to Rs. 17,127 per tonne

product stagnation or cost increase in 2008-09

Reinforced its culture of product value-addition

Retained its industry cost leadership

Input risk A disruption in quality raw material The Company intends to extend raw material supply contracts

availability at the right price may from three months to a year

affect the Company’s competitive edge Propose to have reasonable inventory for all critical raw

material depending on lead time.

Propose reduction in freight cost by having exclusive

agreements with transporters for movement of raw material.

Strengthening raw material sourcing by widening the vendor

base

Plans to acquire silica mines in the vicinity of its six

manufacturing units

Operation risk Operational inefficiencies could increase The Company reinforced its pioneering industry status

the Company’s cost through the bottle light-weighting technology

Implemented the in-plant narrow-neck-press-and-blow

technology to catalyse light weighting by up to 25-30 percent

Implemented vacuum pumps in production lines, enhanced

productivity, improved quality and reduced energy

consumption

Introduced Japanese technology in reducing job change and

stabilisation time leading to enhanced capacity utilisation


Nature of risk Risk explanation Risk mitigation

Quality risk Inconsistent product quality can lead to The Company possesses ISO 9000:2000 quality certificationclient attrition and is actively pursuing ISO 14000/18000/22000 certifications

Invested in sophisticated laboratories equipped with cutting-edge equipment (atomic absorption spectrophotometer, flamephotometer, ramp pressure tester, vertical load tester, profileprojector, impact tester and automatic thermal shock tester)

Stringent monitoring reduced rejections

Marketing risk The Company may find it difficult to The Company enjoys a decades-rich relationship with itscapitalise on emerging opportunities clients

due to weak marketing Enjoys a 26-nation presence to be increased further in thefinancial year 2009-10

Deepened its global footprint in Europe, Asia and America.

Liquidity risk A liquidity crunch could hamper Reduced debtors’ cycle operations Strengthened creditors’ period optimising working capital use

Sustained the working capital cycle

People risk A lack of skilled professionals could The Company is continuously recruiting new professionals to

affect growth drive its growth

Strengthened training at all levels

Enhanced employee retention to more than 95 percent

Funding risk An inability to mobilise adequate The Company enjoyed a 0.36 debt-equity ratio, considered

low-cost funds may stagger growth adequate to fund prospective expansions

Maintained a Rs. 917.71 cr reserve as on March 31, 2009;free reserves constituted 87.33 percent of the reserves andsurplus balance as on March 31, 2009

Enjoyed a prudent mix of secured and unsecured loans


THE DIRECTORS PRESENT THECOMPANY’S REPORT ON

CORPORATEGOVERNANCE

1. Company’s philosophy on Code of GovernanceWe at HNG believe good Corporate Governance is a pre-requisite

for meeting the needs and aspirations of its shareholders and

other stakeholders in the Company and firmly believe that the

same could be achieved by maintaining a system and process

from which emerges the cornerstones of Company’s governance

philosophy, namely trusteeship, transparency, empowerment

and accountability, control and ethical corporate citizenship. The

practice of each of these creates the right corporate culture that

fulfils the true purpose of Corporate Governance.

During the financial year 2008-09, the Company has kept its

commitment towards the required norms and disclosures on

Corporate Governance under the Listing Agreement executed

with the stock exchanges, in which the shares of the Company

are listed.

2. Board of Directors The Company has formed an active, well-informed Board with

the majority comprising Independent Directors to uphold the

Company’s commitment to high standards of ethical values and

business integrity.

Present composition and size of the Board-

The composition of the Board of Directors as on March 31, 2009

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

3 are Executive Directors

1 is a Non-Executive Director

6 are Non-Executive Independent Directors

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

Independent Director. The number of Independent Directors

exceeds one-half of the total number of Directors.

Attendance of Directors at the previous Annual General

Meeting (AGM)-

The last Annual General Meeting was held on September 8,

2008 at Rotary Sadan, 94/2, Chowringhee Road, Kolkata 700

020 and the same was attended by all the Directors except

Mr. S.K. Bangur and Dr. I.K. Saha.

Attendance of Directors at the Board meeting and number of

other directorships and other Board committee memberships,

etc. during the year under review-

Name of the Director Category of No of Board Directorship in other #No. of committees (Other than that directorship meeting(s) companies of the Company) in which he is

attended incorporated in India^Chairman Member Total

Mr. C. K. Somany (Chairman) 5 9 – 1 1

Non-Executive

Mr. Sanjay Somany (Managing Director) 5 9 – – –

Executive

Mr. Mukul Somany (Jt. Managing 5 10 – – –

Director) Executive

Mr. Kishore Bhimani Independent 4 1 – 1 1


The Board meetings are normally convened on the directions

received from the Chairman/Managing Director of the Company.

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

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

are circulated along with relevant information to enable the

Board members to take appropriate decisions. The minutes of

the Committees of the Board are regularly placed before the

Board.

3. Audit CommitteeTerms of reference-

The Company constituted an Audit Committee in the year 2000.

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

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

the disclosure of its financial information to ensure that the

financial statement is correct, sufficient and credible.

2. Recommending to the Board, the appointment,

re-appointment and, if required, replacement or removal of the

Statutory Auditors, Tax Auditors and Internal Auditors of the

Company and the fixation of audit fees.

3. Approval of payment to Statutory Auditors for any other

services rendered by them.

4. Reviewing, with the management, the annual financial

statements before submission to the Board for approval, with

particular reference to:

a. Matters required to be included in the Directors’ Responsibility

Statement forming a part of the Board’s Report in terms of

Section 217(2AA) of the Companies Act, 1956.

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

reasons for the same.

Name of the Director Category of No of Board Directorship in other #No. of committees (Other than that directorship meeting(s) companies of the Company) in which he is

attended incorporated in India^Chairman Member Total

Mr. S. Bhattacharya Independent 5 1 – – –

Mr. R. K. Daga Independent 5 2 2 – 2

Mr. Dipankar Chatterji Independent 4 7 – 5 5

Mr. S.K. Bangur Independent 3 10 – – –

Dr. I.K. Saha Independent 5 1 – – –

Mr. R. R. Soni Executive Director 2 1 – – –

^excludes directorship of companies formed u/s 25 of the Companies Act, 1956, private limited companies and foreign

companies.

# Membership/Chairmanship of Audit committees and Shareholders’/Investors’ Grievance committees have been considered.

Board meetings held during the year-

During the financial year ended on March 31, 2009, five Board meetings were held within the maximum specified duration of 120

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

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

01 May 16, 2008 April’08 – June’08 114 days

02 June 25, 2008 April’08 – June’08 39 days

03 July 25, 2008 July’08 – September’08 29 days

04 October 27, 2008 October’08 – December’08 93 days

05 January 27, 2009 January’09 – March’09 91 days


c. Major accounting entries involving estimates based on the

exercise of judgment by the management.

d. Significant adjustments made in the financial statements

arising out of audit findings.

e. Compliance with listing and other legal requirements relating

to financial statements.

f. Disclosure of any related party transactions.

g. Qualifications in the Auditors’ Report.

5. Reviewing, with the management, the quarterly financial

statements before submission to the Board for approval.

6. Reviewing, with the management, performance of statutory

and internal auditors and adequacy of the internal control

systems.

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

including the structure of the internal audit department, staffing

and seniority of the official heading the department, reporting

structure coverage and frequency of internal audit.

8. Reviewing with internal auditors any significant findings and

follow-up there on.

9. Reviewing the findings of any internal investigations by the

internal auditors into matters where there is a suspected fraud

or irregularity or a failure of internal control systems of a material

nature and reporting the matter to the Board.

10. Discussion with Statutory Auditors, about the nature and

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

area of concern.

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

payment to the depositors, debenture-holders, shareholders

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

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

of reference of the Audit Committee.

Composition, meetings and attendance during theyear-During the financial year ended March 31, 2009, eight meetings

of the Audit Committee were held and the attendance of each

member of the Committee is given below:

Dates of meetings May 31, 2008, June 25, 2008, July 25, 2008, August 13, 2008,

October 26, 2008, December 16, 2008, January 27, 2009,

February 24, 2009.

Members of the Audit Committee have the requisite financial

and management expertise. The Chairman of the Audit

Committee attended the 62nd Annual General Meeting of the

Company.

4. Remuneration Committee Terms of reference- To formulate and determine the Company’s policy regarding remuneration packages for Executive Directors

including any compensation payments.

Composition, meetings and attendance during the year-

Total Strength of Audit Committee : Three

Designation Members Category No. of No. of

meetings held meetings attended

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

Member Mr. Sujit Bhattacharya Non-Executive, Independent Director 8 7

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

Total strength of Remuneration Committee : Three

Designation Members Category

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

Member Mr. Kishore Bhimani Non-Executive, Independent Director

Member Mr. Dipankar Chatterji Non-Executive, Independent Director


The Remuneration Committee has approved the increase in

remuneration of the Managing Director and Joint Managing

Director in terms of the agreement entered by the Company with

them as agreed by the shareholders of the Company. Further,

the Remuneration Committee has also approved the

remuneration payable to the Executive Director.

Remuneration policy of the Company-The remuneration of the Executive Directors are recommended

by the Remuneration Committee, based on criteria such as

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

industry, responsibilities shouldered, performance/track record,

macro-economic review, remuneration packages of heads of

other organisations and approved by the Board of Directors. The

Company pays remuneration by way of salary, perquisites and

allowances, incentive remuneration and /or commission to its

Executive Directors.

The remuneration by way of commission to the Non-executive

Directors is decided by the Board of Directors and distributed on

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

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

remuneration by way of commission every year to the Non-

Executive Directors of the Company of Rs. 100,000 or 1 percent

of the net profit for that year (calculated in accordance with the

Provisions of section 309 (5) of the Companies Act, 1956),

whichever is less, subject to the approval of Central Government

as may be required, for the period of 5 years commencing from

April 1, 2007 and ending on March 31, 2012. The commission

for the financial year 2008-09 will be distributed among the said

Directors accordingly.

Details of the remuneration paid to the Directorsduring the financial year 2008-09

To Non-Executive Directors

In addition to the commission as aforesaid, the Independent and

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

for attending each meeting of the Board and the Audit

Committee. The members of Remuneration Committee are paid

a sitting fee of Rs. 2500 for attending each committee meeting.

Further, no remuneration is paid for attending the meeting of

the Share Transfer & Shareholders’ Grievance Committee and

Treasury Management Committee.

The Company obtained shareholders’ approval for the payment

of commission to Non Executive Directors, on September 14,

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

be apportioned and paid among the Non-Executive Directors on

the basis of duration of membership on the Board.

The details of sitting fees paid and commission payable for the

financial year 2008-09 are as follows:

(In Rupees)

Directors Business relationship Sitting fees Commission Total

with HNGIL

Mr. C.K. Somany* Promoter 25,000 1,00,000 1,25,000

Mr. Kishore Bhimani None 22,500 1,00,000 1,22,500

Mr. S. Bhattacharya None 60,000 1,00,000 1,60,000

Mr. R.K. Daga None 67,500 1,00,000 1,67,500

Mr. Dipankar Chatterji None 62,500 1,00,000 1,62,500

Mr. S.K. Bangur None 15,000 1,00,000 1,15,000

Late Supriya Gupta None 15,000 1,00,000 1,15,000

Dr. I.K. Saha None 25,000 1,00,000 1,25,000

* Mr. C.K. Somany is father of Mr. Sanjay Somany, Managing Director and Mr. Mukul Somany, Joint Managing Director. Other

Directors are not related to one another.


To Executive DirectorsThe details of remuneration paid to Executive Directors as per agreement during the financial year 2008-09 is as follows:

Total strength of the Committee : Four

Designation Members Category No. of No. of

meetings held meetings attended

Chairman Mr. Kishore Bhimani Non-Executive 4 4

Independent Director

Member Mr. R.K. Daga Non-Executive 4 4

Independent Director

Member Mr. Sanjay Somany Executive Director 4 4

Member Mr. Mukul Somany Executive Director 4 4

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

Date of meetings

June 25 , 2008 July 25, 2008 October 27, 2008 January 27, 2009

The Compliance Officer of the Company is Mr. Priya Ranjan who is also the Company Secretary of the Company.

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

(In Rupees)

Break-up remuneration Executive Directors

Mr. Sanjay Somany * Mr. Mukul Somany* Mr. R. R. Soni

Business relationship with HNGIL Managing Director, Jt. Managing Director, Executive Director

Promoter’s family Promoters’ family

Salary 63,48,000 63,48,000 8,25,806

Provident Fund 7,61,760 7,55,268 96,305

Perquisites 43,618 3,22,266 4,75,514

Commission 63,48,000 63,48,000 4,12,903

Total 1,35,01,378 1,37,73,534 18,10,528

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

to Mr. C.K. Somany, Chairman of the Company.

Notes:

a. The agreements with the Executive Directors is for a period of five years for Mr. Sanjay Somany and Mr. Mukul Somany w.e.f.

October 1, 2005 up to September 30, 2010 and for a period of three years for Mr. R. R. Soni w.e.f. October 27, 2008 up to October

26, 2011; or the normal retirement date, whichever is earlier. Either party to the agreement is entitled to terminate it by giving not

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

b. Mr. Sanjay Somany and Mr. Mukul Somany are entitled to a commission of 1% of the net profits subject to a ceiling of their annual

salary. Mr. R. R. Soni is entitled to a commission of 0.5% of the net profits subject to a ceiling of 50% of his annual salary.

c. No stock options is available with the Executive Directors or the employees of the Company.


However, no resolution requiring a postal ballot u/s 192A

of the Companies Act, 1956 was recommended for approval

during the last year. No resolution requiring postal ballot

is being proposed at the ensuing Annual General Meeting.

The Company will seek shareholders’ approval through postal

ballot in respect of resolutions relating to such business

as prescribed in the Companies (Passing of the Resolutions

by Postal Ballots) Rules, 2001, as and when the occasion arises.

7. Disclosures There are no materially significant related party transactions

made by the Company with its Promoters, Directors or the

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

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

Register of Contracts containing the transactions in which the

Directors are interested is placed before the Board regularly for

its approval.

Shareholders’ complaints and pending share transferThere were three investor grievance complaints received during the year under review. All the three complaints were resolved and

there are no complaints pending at year ended March 31, 2009.

6. General Body Meetings The details of day, date, venue and time of the last three Annual General Meetings held are as follows:

General Meeting Venue Day and date Time

62nd Annual General Meeting Rotary Sadan, 94/2, Chowringhee Monday, September 8, 2008 10.00 A.M.

Road, Kolkata- 700 020

61st Annual General Meeting Registered Office: Friday, September 14, 2007 11.30 A.M.

2, Red Cross Place, Kolkata- 700 001

60th Annual General Meeting Registered Office: Monday, September 25, 2006 11.30 A.M.

2, Red Cross Place, Kolkata- 700 001

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

Shareholders’ meeting Special Business requiring Special Resolution

62nd Annual General Meeting 1. Resolution requiring approval u/s 31 of the Companies Act, 1956 for altering the Article

85 of the Articles of Association of the Company in respect to the number of Directors

of the Company.

2. Resolution requiring approval u/s 314 of the Companies Act, 1956 for holding an office of

profit by the Chairman of the Company in Glass Equipment (India) Limited, a 100%

Subsidiary of the Company.

3. Resolution requiring approval u/s 293(1)(d) of the Companies Act, 1956 and all other

enabling provisions, to grant consent to the Board of Directors of the Company to borrow

sums of money, which may exceed the aggregate for the time being of the paid up capital

of the Company and its free reserves.

4. Resolution requiring approval u/s 293(1)(a) of the Companies Act, 1956 and other

applicable provisions to grant consent to the Board of Directors to mortgage, create

charge(s) and/or hypothecate in addition to the existing mortgage(s), charge(s) and

hypothecation(s).

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

2. Resolution requiring approval u/s. 314 of the Companies Act, 1956 for Mr. Bharat

Somany, to hold office or place of profit in the Company.

60th Annual General Meeting None


Related Party Transactions in the ordinary course of business

are reported to the Audit Committee. Such transactions are

disclosed in Note No. 28 of Schedule ‘S’ to the accounts in the

Annual Report.

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

imposed on the Company by either the Securities and Exchange

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

statutory authority for non-compliance of any matter related to

the capital market.

Though there is no formal whistle blower policy, the Company

takes cognizance of the complaints made and suggestions given

by the employees and others. Even anonymous complaints are

looked into and whenever necessary, suitable corrective steps

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

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

The Company conducts periodic reviews and reporting to the

Board of Directors regarding risk assessment by senior executives

with a view to minimise risk.

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

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

his personal capacity).

During the financial year 2008-09, the Company didn’t make

any public or rights issue.

The Financial Statements for the financial year 2008-09 have

been prepared in accordance with the applicable Accounting

Standards prescribed by The Institute of Chartered Accountants

of India and as required under the Companies (Accounting

Standards) Rules, 2006.

The Managing Director and the Joint Managing Director of

the Company have certified to the Board in accordance with

Clause 49(v) of the Listing Agreement pertaining to CEO/CFO

certification for the financial year ended March 31, 2009.

The Management Discussion and Analysis statement forms

part of this Annual Report.

According to Articles of Associations of the Company, one-

third of the Directors retire by rotation and, if eligible, seek re-

appointed at the Annual General Meeting of the shareholders. As

per Article 90 of the Articles of Association of the Company, Shri.

Kishore Bhimani, Shri. Sujit Bhattacharya and Shri. S. K. Bangur

will retire in the ensuing Annual General Meeting. The Board has

recommended the re-appointment of all the retiring Directors.

The detailed profiles of all these Directors are provided in the

Notice calling the Annual General Meeting of the Company.

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

published in the proforma prescribed under the Listing

Agreement in one English Newspaper (normally in The Financial

Express) having wide circulation and another in vernacular

language in Bengali (normally in Dainik Lipi/Arthik Lipi).

However, only the annual results are sent to the shareholders of

the Company.

The Company’s annual results along with various other

information are displayed on the Company’s web-site

www.hngindia.com.

Pursuant to the requirement of Clause 51 of the Listing

Agreement, the quarterly financial results, shareholding pattern,

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

http://sebiedifar.nic.in.

9. General shareholder information

Incorporation The Company was incorporated in Calcutta in the Province of Bengal on 23rd

February 1946 (now West Bengal).

Corporate Identification Number (CIN): L26109WB1946PLC013294

AGM: Date, time and venue August 14, 2009; 11.00 AM at Rotary Sadan, 94/2, Chowringhee Road,

Kolkata-700 020

Financial calendar April to March

1st quarter results by 4th week of July

2nd quarter results by 4th Week of October

3rd quarter results by 4th Week of January

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

Date of book closure August 7, 2009 to August 14, 2009 (both days inclusive)

Dividend Payment Date August 14, 2009

Listing on stock exchanges


Your Company’s shares are listed on the following stock exchanges:

1] The Calcutta Stock Exchange 2] Bombay Stock 3] National Stock Exchange

Association Ltd Exchange Limited, Mumbai of India Limited

7, Lyons Range, Kolkata-700 001 25, Phiroze Jeejeebhoy Towers, Exchange Plaza, Bandra Kurla

Email: [email protected] Dalal Street, Mumbai 400 001 Complex, Bandra (E),

Website: www.cse-india.com Email : [email protected] Mumbai- 400 051

Website: www.bseindia.com Email: [email protected]

Website: www.nseindia.com

Listing fees Paid for the financial year 2009-10 for all the above Stock Exchanges.

Scrip code/Scrip Symbol – i. 18003 on The Calcutta Stock Exchange Association Ltd., Kolkata

ii. 515145 on Bombay Stock Exchange Limited, Mumbai

iii. HINDNATGLS on National Stock Exchange of India Limited, Mumbai

High / Low share price data

1] According to the data provided by The Calcutta Stock Exchange Association Ltd., Kolkata, there has been no transaction of

the Company’s equity shares during the year under review at the said Stock Exchange.

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

financial year 2008-09 and the respective higher / lower price data are as given below:

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

April, 2008 784.70 745.85 33,693

May, 2008 794.20 656.70 27,982

June, 2008 738.65 560.20 28,316

July, 2008 685.55 571.50 32,631

August, 2008 658.75 578.90 22,727

September, 2008 596.60 431.25 17,580

October, 2008 448.70 249.90 17,611

November, 2008 413.55 302.20 14,489

December, 2008 651.65 387.05 32,028

January, 2009 591.85 515.10 13,607

February, 2009 549.70 464.25 9,990

March, 2009 478.00 415.00 8,616

Source: www.bseindia.com

3] The Equity Shares of the Company were listed and admitted for dealing on the National Stock Exchange Limited w.e.f April

15, 2009.

Performance in comparison to broad-based indices such as BSE Sensex

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


Registrar & Share Transfer Agent In compliance with the SEBI directive, the Company has appointed M/s.

Maheshwari Datamatics Pvt. Ltd., as its Registrar & Share Transfer Agent for all

matters relating to shares both in physical as well as in dematerialised mode.

However, documents relating to shares are also received at the Company’s

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

3100, Fax No: (033) 2254 3130, e-mail address: [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.

Distribution of Share Holding and Share Holding Pattern as on March 31, 2009

No. of equity shares held Folios % Shares %

1 to 5000 6411 98.39 2,13,547 1.22

5001 to 10000 47 0.72 36,079 0.21

10001 to 20000 16 0.2455 23,357 0.13

20001 to 30000 3 0.0460 7,400 0.04

30001 to 40000 3 0.0460 10,807 0.06

40001 to 50000 2 0.0307 8,482 0.05

50001 to 100000 2 0.0307 13,382 0.08

100000 and above 32 0.4911 1,71,54,659 98.21

Grand total 6,516 100.00 1,74,67,713 100.00

No. of shareholders in:

Physical mode 51 0.78 69,97,470 40.06

Electronic mode

NSDL 3,864 59.30 1,02,91,614 58.92

CDSL 2,601 39.92 1,78,629 1.02

Total 6,516 100.00 1,74,67,713 100.00

Shareholding pattern as on March 31, 2009

Category No. of shares %

Promoters and associates 1,29,54,068 74.16

Institutions 3,24,262 1.86

Domestic companies 4,23,425 2.42

Resident individuals 37,64,572 21.55

Foreign residents and NRIs 1,385 .01

Trust 1

Total 1,74,67,713 100

Dividend – The Board has recommended dividend @ 50% or Rs. 5 per equity share


Dematerialisation of shares and liquidity

As on March 31, 2009, 1,04,70,243 shares comprising 59.94% of the paid-up capital of the Company are in dematerialised

mode, as compared to 40,45,962 shares as on March 31, 2008. C. K. Somany Group i.e. the promoter of the Company, holds

around 74.16% of the paid-up capital of the Company, of which 59,61,426 shares being 34.13% of paid-up capital are held in

dematerialised mode as on March 31, 2009, as compared to 30,47,401 shares being 27.49% of paid-up capital as on March

31, 2008 and the balance in the physical form at the end of the year March 31, 2009.

Demat ISIN Number for NSDL and CDSL INE 952A01014

Outstanding GDRSs/ADRs/ Warrants or any convertible None

instruments, conversion date and the likely impact on equity.

Plant locations The Company has six plants, located at:

I. 2, Panchu Gopal Bhaduri Sarani, II. Bahadurgarh–124507, Dist: Jhajjar, Haryana.

Rishra-712 248, Dist. Hooghly, West Bengal Phone: (01276) 221400, Fax (01276) 221666

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

III. 14, RIICO Industrial Area IV. P.O. Virbhadra, Rishikesh - 249201,

Neemrana, Distt. Alwar, Pin - 301705 (Rajasthan) Dist. Dehradun, Uttarakhand

Tel - 01494 - 246712, 513935 Phone: (0135) 2470700, Fax (0135) 2470777

Fax - 01494 - 246713

V. Thondamanatham Village, VI. Nashik Glass Work, F1, MIDC Malegaon,

Vezhudavoor S.O. Pondicherry –605 502 Dist. Sinnar, Nashik - 422113

Phone: (0413) 2677319, Fax (0413) 2677366/2677666 Phone: (025511) 228900, Fax (025511) 228999

Address for correspondence Company Secretary

Hindusthan National Glass & Industries Ltd.

2, Red Cross Place, Kolkata 700 001.

Telephone No. (033) 2254 3100,

Fax No. 033 2254 3130

Email: [email protected]

E-mail ID for investors’ grievance [email protected]

B. Non-mandatory requirements under Clause 49 of the Listing Agreement

The Board At present, the Chairman of the Company Mr. C. K. Somany, does not have a

separate office in the Company. The corporate office supports the Chairman in

discharging his responsibilities.

Independent Directors are appointed on the Board based on their requisite

qualifications and experiences which enables them to contribute effectively to the

Company.

Treasury Management Committee The Board of Directors at its meeting held on May 9, 2005, have constituted a

Committee of its member known as the Treasury Management Committee to approve

and authorise transactions involving the day-to-day management of the funds with

more efficiency. The Committee comprises Mr. Sanjay Somany, Mr. Mukul Somany,

Mr. R.K. Daga and Mr. Dipankar Chatterji as its members. During the financial year

2008-09, 37 meetings of the Treasury Management Committee were held.

Remuneration Committee The details of the Committee have already been stated at point no 4 of this report.


Information to shareholders Half-yearly results including summary of the significant events are currently not being

sent to the shareholders of the Company. However, quarterly results are posted at

the Company’s website, in addition to being published in two newspapers, one in

English and another in vernacular language.

Code of conduct for prevention Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations,

of insider trading. 1992, as amended, the Company has adopted a ‘Code of Conduct for Insider

Trading’ at the meeting of the Board of Directors held on June 10, 2002. The

Company, its Directors and designated employees, have complied with the provisions

of the said Code of Insider Trading.

Code of Conduct for Directors Pursuant to the requirements of Clause 49 of the Listing Agreement as amended, the

Company has adopted a ‘Code of Conduct for Directors and the Senior Management’

at the meeting of the Board of Directors held on October 31, 2005. The said code

is also placed on the website of the Company viz. www.hngindia.com. The Directors

and designated employees of the Company have complied with the provisions of

the said Code of Conduct.


Kolkata C.K. SomanyJune 20, 2009 Chairman

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

Members of the Board and Senior Management’ for the financial year 2008-09 in terms of Clause 49(I)(D)(ii) of the Listing Agreement

with the Stock Exchanges.

Mukul Somany Sanjay SomanyDate: June 20, 2009 Joint Managing Director Managing Director

CertificateThe Members of Hindusthan National Glass & Industries Limited.

We have examined the compliance of the conditions ofCorporate Governance by Hindusthan National Glass &Industries Ltd. for the financial year ended March 31, 2009 asstipulated in Clause 49 of the Listing Agreement of the saidCompany with stock exchanges in India.

The compliance of conditions of Corporate Governance is theresponsibility of the management. Our examination was carriedout in accordance with the guidance note on certification ofCorporate Governance (as stipulated in Clause 49 of the ListingAgreement) issued by The Institute of Chartered Accountants ofIndia, and limited to the procedures and implementationthereof, adopted by the Company for ensuring the complianceof the conditions of Corporate Governance. It is neither an auditnor an expression of the opinion on the financial statements ofthe Company.

In our opinion and to the best of information and explanationsgiven to us and the representations made by the Directors andthe management, we certify that the Company has complied inall material aspects with the conditions of Corporate Governanceas stipulated in the above-mentioned Listing Agreement.

We further state that such compliance is neither an assurance asto the future viability of the Company, nor the efficiency oreffectiveness with which the management has conducted theaffairs of the Company.

For Lodha and Co.(Chartered Accountants)

Kolkata (H.K. Verma)June 20, 2009 Partner


Auditors’ Report

To the Members

We have audited the attached Balance Sheet of HINDUSTHAN

NATIONAL GLASS & INDUSTRIES LIMITED as at March 31, 2009

and also the Profit and Loss Account and the Cash Flow Statement

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

statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial

statements based on our audit.

We conducted our audit in accordance with auditing standards

generally accepted in India. Those standards require that we plan

and perform the audit to obtain reasonable assurance about

whether the financial statements are free of material misstatement.

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

the amounts and disclosures in the financial statements. An audit

also includes assessing the accounting principles used and significant

estimates made by the management, as well as evaluating the

overall financial statement presentation. We believe that our audit

provides a reasonable basis for our opinion.

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

as amended by the Companies (Auditors Report) (Amendment)

Order, 2004 issued by the Central Government of India in terms

of Section 227(4A) of the Companies Act, 1956 and on the basis

of such checks as we considered appropriate and according to

the information and explanations given to us, we further report

that:

i) a) The Company has maintained proper records showing

full particulars including quantitative details and

situation of fixed assets.

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

management during the year but there is regular

programme of verification, which, in our opinion, is

reasonable having regard to the size of the Company

and the nature of its assets. There were no material

discrepancies with regard to book records in respect of

the assets verified during the year.

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

substantial part of its fixed assets.

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

transit has been physically verified by the management

at regular intervals during the year. In our opinion and

according to the information and explanations given to

us, the frequency of verification is reasonable.

b) In our opinion, the procedure for the physical

verification of the inventory followed by the

management is reasonable and adequate in relation to

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

c) The Company is maintaining proper records of

inventory. As explained to us, discrepancies noticed on

physical verification of inventory were not material.

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

unsecured, to companies covered in the register

maintained under section 301 of the Act. Therefore the

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

the Company.

b) The Company had not taken any unsecured loan from

companies covered in the register maintained under

section 301 of the Companies Act, 1956. The total

number of parties is zero and the maximum amount

involved during the year was Rs Nil and at the year-end

there was no outstanding balance of loan. Therefore the

provisions of clause 4(iii) (e) to (g) are not applicable to

the Company.

iv) In our opinion and according to the information and

explanations given to us, having regard to the explanations

that some of the items are of special nature for which

alternative quotations are not available, there are adequate

internal control procedures commensurate with the size of

the Company and nature of its business with regard to the

purchase of inventory, fixed assets and for the sale of goods

and services. During the course of our audit, no major

weakness has been noticed in the internal control system.

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

to the information and explanations given to us, we are

of the opinion that the transactions that need to be

entered into the register maintained under section 301


of the Companies Act, 1956 have been so entered.

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

para (iv) above, the transactions made in pursuance of

contracts or arrangements entered in the register

maintained under Section 301 of the Companies Act,

1956, and aggregating during the year to five lacs or

more in respect of each party have been at prices which

are considered reasonable having regard to prevailing

market price for such goods and materials.

vi) The Company has not accepted any deposits from the public

during the year.

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

system commensurate with its size and nature of its

business.

viii) The Central Government has not prescribed for the

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

Companies Act, 1956 in respect of any of the Company’s

product.

ix) a) The Company is generally regular in depositing

undisputed statutory dues including Provident Fund,

Investor Education and Protection Fund, Employees’

State Insurance (except in case of Neemrana unit where

Provident Fund, and Employees’ State Insurance were

deposited after receipt of PF code/No.) Wealth Tax,

Service Tax, Income Tax, Sales Tax, Custom duty, Excise

duty, Cess and other material statutory dues with the

appropriate authorities.

b) There are no undisputed statutory dues payable for a

period of more than six months from the date these

dues became payable as at March 31, 2009.

c) According to the information and explanations given to

us, the statutory dues which have not been deposited as

on March 31, 2009 on account of disputes are as under:

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

Statute (Rs in lacs) the amount relates is pending

(Financial year)

The Central Excise Excise Duty 588.50 1995-96, 1996-97, 1997-98, Supreme Court

Act, 1944 2000-01

4.00 2001-02, 2005-06 High Court

602.16 1995-96, 1998-99, 1999-2000, CESTAT

2002-03, 2003-04, 2004-05,

2005-06, 2006-07

127.09 2000-01, 2001-02, 2004-05, Commissioner (Appeals)

2006-07, 2007-08

13.07 1993-96 Assistant Commissioner

The Sales tax Sales Tax 58.59 1996-97, 1997-98, 1998-99, T.T. Tribunal, Dehradun

Act, 1932 1999-00

6.89 2003-04 J.C. (Appeal), Dehradun

Maharshtra Value 114.00 2005-06, 2006-07 Maharshtra Sales Tax Tribunal, Mumbai

Added Tax

Act, 2002

Bombay Sales Tax Sales Tax 51.31 1997-98 Commissioner sales Tax, Pune

Act, 1959

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

Sales Tax Act 2.60 2005-06 Dy.Excise & Taxation Commissioner, Haryana

Mines and Minerals 79.85 1993-94 District Collector, Villupuram

Regulation &

Development Act


x) The Company has no accumulated losses at the end of the

financial year and it has not incurred any cash losses in the

current or in the immediately preceding financial year.

xi) According to the information and explanations given to us,

the Company has not defaulted in repayment of dues to a

financial institution, bank or debenture holders.

xii) According to the information and explanations given to us,

the Company has not granted any loans and advances on

the basis of security by way of pledge of shares, debentures

and other securities.

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

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

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

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

2004 are not applicable to the Company.

xiv) According to the information and explanations given to us,

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

debentures and other investments. Accordingly, the

provisions of clause 4 (xiv) of the Companies (Auditor’s

Report) Order, 2003, as amended by the Companies

(Auditors Report) (Amendment) Order, 2004 are not

applicable to the Company.

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

Company has given guarantee for loans taken by its

subsidiary Company from bank are not prima facie

prejudicial to the interest of the Company.

xvi) According to the information and explanations given to us,

the term loans have been applied for the purpose for which

they were raised.

xvii) According to the information and explanations given to us

and on an overall examination of the Balance Sheet of the

Company, we report that short term fund have not been

used for long-term investment.

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

allotment of shares to parties and companies covered in the

register maintained under section 301 of the Act.

xix) According to the information and explanation given to us,

the Company has created security in respect of debentures

issued during the year.

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

issue during the year.

xxi) Based upon the audit procedures performed and

information and explanations given to us, we report that no

fraud on or by the Company has been noticed or reported

during the course of our audit.

2. Attention is invited to Note 28 E of Schedule S regarding

purchase of goods for which central Government approval as

required in terms of provisions of Companies Act, 1956 has not

been obtained by the Company.

3. Further to above, we report that

i) We have obtained all the information and explanations,

which to the best of our knowledge and belief were

necessary for the purpose of our audit.

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

Statement dealt with by this report are in agreement with

the books of account.

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

have been kept by the Company so far as appears from our

examination of these books.

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

and Cash Flow Statement dealt with by this report comply

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

of the Companies Act, 1956 to the extent applicable.

v) On the basis of the written representations from the

Directors and taken on record by the Board of Directors,

none of the Directors is disqualified as on March 31, 2009

from being appointed as a Director under Section 274(1)(g)

of the Companies Act, 1956.

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

according to the explanations given to us, the said accounts

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

with the overall impact, which is not ascertainable and read

together with other Notes on Accounts of Schedule “S” give

the information required by the Companies Act, 1956 in the

manner so required and also give a true and fair view in

conformity with the accounting principles generally

accepted in India:

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

the Company as at March 31, 2009 and

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

of the profit for the year ended on that date.

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

the year ended on that date.

For Lodha & Co.

Chartered Accountants

H. K. Verma

Kolkata Partner

June 20, 2009 Membership No: 55104


The Schedules referred to above form an integral part of Balance SheetAs per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director

H. K. Verma Priya Ranjan Nirmal KhannaPartner Company Secretary Sr. Vice President andKolkata Chief Financial OfficerJune 20, 2009

Balance Sheet As at March 31, 2009

(Rs in lacs)

Schedules As at 31.03.2009 As at 31.03.2008

SOURCES OF FUNDS

Shareholders' Funds

Share Capital A 1746.77 1746.77

Reserves and Surplus B 91771.26 84612.65

93518.03 86359.42

Loan Funds

Secured Loans C 41523.81 28742.96

Unsecured Loans D 9210.65 13127.61

50734.46 41870.57

Deferred Tax Liabilities (Net) 4176.71 1807.52

Total 148429.20 130037.51

APPLICATION OF FUNDS

Fixed Assets E

Gross Block 137899.43 125746.20

Less: Depreciation 47251.09 41031.42

Net Block 90648.34 84714.78

Capital Work-in-Progress 8203.39 4510.70

Investments F 10458.46 11458.50

Current Assets, Loans and Advances

Inventories G 21578.47 16414.97

Sundry Debtors H 22718.99 16449.63

Cash and Bank Balances I 1139.97 1678.98

Loans and Advances and Other Current Assets J 19353.09 13654.98

64790.52 48198.56

Less:

Current Liabilities and Provisions

Current Liabilities K 19882.16 14857.67

Provisions L 5789.35 3987.36

25671.51 18845.03

Net Current Assets 39119.01 29353.53

Total 148429.20 130037.51

Significant Accounting Policies and Notes on Accounts S


The Schedules referred to above form an integral part of Profit and Loss AccountAs per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director


Profit and Loss Account For the year ended March 31, 2009

(Rs in lacs)

Schedules 31.03.2009 31.03.2008

INCOME

Sales (Gross) M 143859.63 114833.90

Less : Excise Duty 12756.04 12704.21

131103.59 102129.69

Other Income N 2170.07 1113.96

Increase / (Decrease) in Stock O 1145.74 (424.86)

134419.40 102818.79

EXPENDITURE

Materials P 39309.11 29251.61

Manufacturing and Other Expenses Q 71519.14 52100.07

110828.25 81351.68

Profit before Depreciation, Interest and Tax 23591.15 21467.11

Depreciation 7698.07 7293.97

Transferred From Revaluation Reserve (223.55) (281.21)

7474.52 7012.76

Interest and Finance Expenses R 4344.88 2346.87

11819.40 9359.63

Profit before Tax 11771.75 12107.48

Less : Provision for Income Tax

- Minimum Alternate Tax 1310.00 1367.57

- Less: MAT Credit Entitlement (355.00) 955.00 (1367.57) –

- Fringe Benefit Tax 50.00 36.90

- Deferred Tax – (2663.49)

- Income Tax for Earlier years (7.87) (1299.82)

Profit after Tax 10774.62 16033.89

Add : Balance brought forward from last year 1072.00 705.57

Amount available for Appropriation 11846.62 16739.46

APPROPRIATIONS

General Reserve 7000.00 14850.00

Debenture Redemption Reserve 1250.00 –

Proposed Dividend on Equity Shares 873.39 698.71

Tax (including cess) on Proposed Dividend 148.43 118.75

Balance carried to the Balance Sheet 2574.80 1072.00

11846.62 16739.46

Basic and Diluted Earning Rs per Share 61.68 91.79

(Refer Note No. 10 of Schedule ‘S’)

Significant Accounting Policies and Notes on Accounts S


Cash Flow Statement For the year ended March 31, 2009

As per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director


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

2) Previous Year’s figures have been regrouped wherever necessary to conform to the Current Year.

(Rs in lacs)

2008-09 2007-08

A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before Tax and extraordinary items 11771.75 12107.48Adjustments to reconcile profit before tax to cash provided by operating activities.Depreciation 7474.52 7012.76Bad Debts & Provision for Doubtful debts 205.54 239.25Provision for loss in value of current investment 0.04 0.17Interest expenses (Net) 4344.88 2346.87Dividend income (166.71) (0.27)Liability no longer required written back (514.97) (95.92)Interest received (497.22) (120.29)(Profit) / Loss on sale of Fixed Assets (Net) 133.70 61.45(Profit) / Loss on sale of current Investments (Net) (119.10) (8.15)Operating Profit before working capital changes 22632.43 21543.35Changes in current assets and liabilitiesLoans and advances (181.44) (4974.99)Trade and other receivables (6474.90) (4056.07)Inventories (5163.50) (441.64)Trade and other payables 4125.48 4316.59Net Cash Generated by Operating Activities 14938.07 16387.24Adjustments for :Direct Taxes paid (1349.04) (115.16)Fringe Benefit Tax paid (41.33) (36.75)Net Cash from Operating Activities 13547.70 16235.33

B. CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Fixed Assets and changes in capital work in progress (16838.18) (13016.03)Proceeds on Disposal of Fixed Assets 679.21 161.13Purchase of Long Term Investments – (4367.93)Sale of Long Term Investments – 42.93Purchase of Current Investments – (5794.44)Sale of Current Investments 1119.10 5802.59Share Application Money (3500.00) –Dividend received 166.71 0.27Interest received 234.21 34.57Net Cash from Investing Activities (18138.95) (17136.91)

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds / (Repayment) from long term borrowings (Net) 17041.95 812.38Proceeds / (Repayment) from short term borrowings (Net) (8178.06) 3116.52Interest paid (3994.49) (2331.38)Dividend Paid during the year including Corporate Dividend Tax (817.16) –Net Cash from Financing Activities 4052.24 1597.52Net changes in Cash and Cash equivalents (539.01) 695.94Opening Cash and Cash equivalents 1678.98 983.04Cash and Cash equivalents at the end of the year 1139.97 1678.98(represents cash in hand and bank balances)


Schedules forming part of the Accounts

31.03.2009 31.03.2008

Authorised51,15,00,000 Equity Shares of Rs 10/- each (Previous Year 51,15,00,000 Shares of Rs 10/-each) 51150.00 51150.00

51150.00 51150.00Issued, Subscribed and Paid-Up1,74,67,713 (Previous Year 1,10,43,368) Equity shares of Rs 10/- each fully paid up of which 1746.77 1104.34

58,10,360 Shares of Rs 10/- each were allotted as fully paid up Bonus Shares by capitalisation of General Reserve and 64,24,345 Equity Shares of Rs 10/- each issuedas fully paid up pursuant to a scheme of amalgamation and arrangement for consideration other than cash.Share Suspense Account (pending allotment pursuant to the scheme of arrangement) – 642.43

1746.77 1746.77

Schedule – A SHARE CAPITAL

Schedule – B RESERVES AND SURPLUS

(Rs in lacs)

Notes 31.03.2009 31.03.2008

I) 12.75 % Redeemable Non Convertible DebenturesPrivately placed with Life Insurance Corporation of India Limited 1 and 2 10000.00 –

II) Rupee term LoansFrom Financial Institution- Export Import Bank of India 2 5304.17 6327.78From Banks- State Bank of India 2 and 3 5996.00 2432.00- The Honkong & Shanghai Banking Corporation Limited 4 9437.50 4562.50

III) Foreign Currency LoansFrom Banks- The Honkong & Shanghai Banking Corporation Limited - PCFC – 599.16- ICICI Bank Limited - External Commercial Borrowing 2 1929.38 2005.50

IV) Working Capital Loans From Banks 5 8233.70 12494.80V) Loans under Vehicle Finance Scheme

From Banks 6 449.07 293.05From Others 6 136.43 7.13

VI) Interest accrued and due 37.56 21.0441523.81 28742.96

Notes:1) 12.75% Secured Non Convertible Debentures amounting to Rs 100 crores, privately placed (alloted on 22.12.2008) are due for

Schedule – C SECURED LOANS

31.03.2009 31.03.2008

General ReserveAs per last Balance Sheet 59385.25 16500.01Add/Less adjustment as referred to in note no 31(a) of Schedule "S" 7000.00 66385.25 42885.24 59385.25Revaluation ReserveAs per last Balance Sheet 10601.57 3388.73Add/Less adjustment as referred to in note no 31(b) of Schedule "S" 225.02 10376.55 7212.84 10601.57Debenture Redemption ReserveAdd/Less adjustment as referred to in note no 31(c) of Schedule "S" 1250.00 –Share PremiumAs per last Balance Sheet 13553.84 1104.30Add/Less adjustment as referred to in note no 31(d) of Schedule "S" 2369.18 11184.66 12449.54 13553.84Profit and Loss AccountSurplus as per Profit and Loss Account 2574.80 1072.00

91771.26 84612.65


Schedules forming part of the Accountsredemption at par in three equal installments at the end of 5th, 6th and 7th year from the date of allotment with put/call option at parat the end of 3rd year from the date of allotment.

2) The loans/debentures are secured by first charge ranking pari-passu with other first charges created on all immovable properties by wayof equitable mortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh and NeemranaPlants, save and except specific assets exclusively hypothecated in favour of respective lenders.

3) These loans are also collaterally secured by second charge on Current Assets of the said plants.

4) The loans are secured by first charge ranking pari-passu with other first charges created and/or to be created on all immovable propertiesby way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishikesh, Pondicherry andNashik Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.

5) This is secured by hypothecation of inventories (both present and future) and book debts and second charge on all immovables, moveableproperties including land and building in favour of consortium bankers led by State Bank of India.

6) These are secured by hypothecation of the vehicles financed in favour of respective lenders.

Note: ** Represents Mibor linked Non-Convertible Debentures privately placed with LIC Mutual Fund (previous year with JM Mutual Fund)

31.03.2009 31.03.2008

a) Short Term LoansFrom Banks 5000.00 8555.45Non Convertible Debentures * 2500.00 3000.00From Others – 27.04

b) Trade Deposits 100.10 100.10c) Sales Tax Deferment Loan 1610.55 1445.02

9210.65 13127.61

Schedule – D UNSECURED LOANS

(Rs in lacs)

GROSS BLOCK DEPRECIATION NET BLOCK

Particulars Book Value at Additions Deductions/ Book Value at Upto For the Deductions/ Upto As on As on

01.04.2008 Adjustments 31.03.2009 01.04.2008 Year Adjustments 31.03.2009 31.03.2009 31.03.2008

Land 12222.72 28.03 – 12250.75 – – – – 12250.75 12222.72

Leasehold Land 2009.07 39.29 – 2048.36 5.60 13.03 – 18.63 2029.73 2003.47

Buildings 13372.09 335.36 (49.77) 13757.22 2459.09 426.07 – 2885.16 10872.06 10913.00

Leasehold Building 9.18 – – 9.18 0.18 0.16 – 0.34 8.84 9.00

Plant and Machinery 96038.73 13122.23 2102.97 107057.99 37753.26 7000.44 1359.38 43394.32 63663.67 58285.47

Furniture and Fixtures 349.01 40.32 82.79 306.54 149.38 17.63 3.62 163.39 143.15 199.63

Office and Other

Equipments 375.47 50.66 11.09 415.04 194.07 41.22 11.10 224.19 190.85 181.40

Vehicles 1287.34 572.98 145.70 1714.62 436.03 166.73 104.30 498.46 1216.16 851.31

Computer Software 82.59 257.14 – 339.73 33.81 32.79 – 66.60 273.13 48.78

Total 125746.20 14446.01 2292.78 137899.43 41031.42 7698.07 1478.40 47251.09 90648.34 84714.78

Previous Year 106960.85 20659.67 1874.32 125746.20 35328.45 7293.96 1590.99 41031.42 84714.78

Schedule – E FIXED ASSETS



Face Value (Rs.) Nos. 31.03.2009 31.03.2008

A) Long TermTradeFully Paid-up Equity SharesUnquotedCapexil Agencies Ltd. 1000 5 0.05 0.05Ceramic Decorators Ltd. 10 7 – -AssociateHNG Float Glass Ltd. 10 42010000 4201.00 4201.00Other Than Trade Unquoted Units of CAN FMP 13M-SRI (Close ended) – 1000.00Fully Paid-up Equity SharesThe Calcutta Stock Exchange Association Ltd. 1 8364 167.28 167.28Beneficial Interest in Shares held in HNG Trust 7.55 7.55Beneficial Interest in Shares held in Ace Trust 6009.35 6009.35In Subsidiary CompaniesGlass Equipment (I) Ltd. 100 26400 55.82 55.82Quality Minerals Ltd. 100 9384 9.38 9.38Government Securities Unquoted Deposited with Government Authorities * a) 12 Years National Savings Certificate 0.01 0.01b) 7 Years National Savings Certificate 0.01 0.01c) 6 Years National Savings Certificate 6.49 6.49

B) Current Other Than Trade Quoted Kajaria Ceramics Ltd. 2 5470 1.52 1.56Total 10458.46 11458.50

* Rs 0.42 lacs since matured but not encashedAggregate book value of Unquoted Investments 10456.94 11456.94Aggregate book value of Quoted Investments 1.52 1.56Aggregate market value of Quoted Investments 1.52 1.56

Schedule – F INVESTMENTS

(Rs in lacs)

(As valued and certified by the Management)Raw Materials 4388.25 2615.54Stores and Spare parts (Including in transit Rs 238.94 lacs, Previous year Rs 560.02 lacs.) 9257.55 7229.13Packing Materials 640.44 423.81Stock-in-Process 302.15 409.76Finished Goods 6990.08 5736.73

21578.47 16414.97

Schedule – G INVENTORIES

(Unsecured, considered good unless otherwise stated)Debts due for a period exceeding six months

Considered good 2733.33 939.30Considered doubtful 863.04 991.53

3596.37 1930.83Less: Provision for doubtful debts 863.04 991.53

2733.33 939.30Other Debts 19985.66 15510.33

22718.99 16449.63

Schedule – H SUNDRY DEBTORS



31.03.2009 31.03.2008

Cash Balance on hand 29.51 29.19Cheques in hand 253.89 1078.26Balances With Scheduled Banks

in Current Accounts 834.96 513.85in Margin Money Accounts* – 40.03in Fixed Deposit Accounts* 21.61 17.65

*(Receipts pledged with the banks and Government authorities for Rs 21.61 lacs, Previous year Rs 57.18 lacs)1139.97 1678.98

Schedule – I CASH AND BANK BALANCES

(Rs in lacs)

(Unsecured and Considered good)Loans To Bodies Corporate 3049.50 4724.00Advances recoverable in cash or in kind or for value to be received 2366.80 2059.23(Net of doubtful advances Rs 238.02 Lacs Previous year Rs 240.65 Lacs)Share Application Money 3500.00 –VAT Credit (Inputs) Account 593.85 613.24Advance Income Tax 4390.01 2866.40Tax Deducted at Source 364.10 175.80Advance Fringe Benefit Tax 79.41 37.66MAT Credit Entitlement 1722.57 1367.57Deposits and balances with Government Authorities and Other Departments 2894.55 1581.33Other Deposits 15.08 132.37

18975.87 13557.60Other Current AssetsInterest accrued on Investments 2.35 1.79Interest Receivable 352.70 85.35Fixed Assets held for disposal (at lower of net book value or estimated net realisable value) 22.17 10.24

19353.09 13654.98

Schedule – J LOANS AND ADVANCES AND OTHER CURRENT ASSETS

Sundry CreditorsDues to Micro, Small and Medium Enterprises 68.34 55.68Others 15546.68 13174.26

Subsidiary Companies 842.63 715.29Interest accrued but not due on Loans 454.64 104.25Commission to Directors 139.09 118.40Other Liabilities 2830.46 689.77Unclaimed dividend * 0.32 0.02* This is not due for payment to Investor Education & Protection Fund.

19882.16 14857.67

Schedule – K CURRENT LIABILITIES

For Taxation 3421.27 2111.27For Gratuity and Unavailed Leave 1257.76 1020.55For Fringe Benefit Tax 88.50 38.08For Proposed Dividend 873.39 698.71For Tax on Proposed Dividend 148.43 118.75

5789.35 3987.36

Schedule – L PROVISIONS



31.03.2009 31.03.2008

Finished Goods 143727.31 113962.18General Merchandise Sale 76.95 163.03Others 55.37 708.69

143859.63 114833.90Less: Excise Duty 12756.04 12704.21

131103.59 102129.69

Schedule – M SALES

(Rs in lacs)

Raw Materials Consumed 39252.14 29059.45Purchase of Trading Material 56.97 192.16

39309.11 29251.61

Dividends On Long Term Investments - other than trade 166.71 0.26Dividends On Current Investments - other than trade – 0.01Interest on- Loan 428.47 41.95- Deposits 48.60 18.88- Investments 0.62 0.07- Others 2.21 0.21- Tax Refunds 17.32 –Rent 39.93 34.38Hire charges 17.20 40.54Insurance Claims 9.62 1.98Miscellaneous Receipts 789.64 475.15Liabilities/ provisions no longer required written back 514.97 95.92Profit on Assets Sold/Discarded 15.68 15.10Profit on sale of Current Investments - other than trade 119.10 8.15Income from Derivatives – 71.29Foreign Exchange Fluctuation (Net) – 310.07

2170.07 1113.96

Closing StockFinished Goods 6990.08 5736.73Work-in-Process 302.15 409.76

7292.23 6146.49Less :Opening StockFinished Goods 5736.73 4596.97Add: Vested pursuant to Scheme of Amalgamation 1648.06 6245.03Work-in-Process 409.76 272.60Add: Vested pursuant to Scheme of Amalgamation 53.72 326.32

6146.49 6571.35Increase / (Decrease) 1145.74 (424.86)

Schedule – N OTHER INCOME

Schedule – O INCREASE / (DECREASE) IN STOCK

Schedule – P MATERIALS


Schedules forming part of the Accounts(Rs in lacs)

Schedule – Q MANUFACTURING AND OTHER EXPENSES

31.03.2009 31.03.2008

Stores and Spare Parts Consumed 7802.50 5767.83Power and Fuel 36840.99 27187.58Packing Material Consumed and Packing Charges 9123.08 7605.62Salaries, Wages and Bonus 5478.70 4270.50Contribution to Provident and other Funds 740.82 722.79Workmen and Staff Welfare Expenses 370.79 420.24Rent 93.43 95.43Rates and Taxes 43.21 57.83Repair and Maintenance :

Buildings 186.95 132.87Plant and Machinery 927.70 1104.51Others 238.18 209.78

Freight outwards, transport and other selling expenses 1232.83 1003.38(Net of Realisation Rs 1214.21 lacs, Previous Year Rs 983.56 lacs)Commission on Sales 140.78 116.10Insurance 151.95 147.45Charity and Donation 40.93 31.00Bad Debts/Advances written off 265.23 185.81Less: Provision for Doubtful Debts / advances written back 265.16 0.07 195.92 (10.11)Provision for Doubtful Debtors/Advances 205.47 249.36Excise Duty on Stock (179.91) (28.13)Directors' Remuneration 298.85 244.99Provision For Loss on Derivative Transaction 1833.05 313.94Loss on sale/discard of fixed assets 149.38 76.55Provision for Diminution in value of Current Investments 0.04 0.17Foreign Exchange Fluctuation (net) 2326.33 –Miscellaneous Expenses 3473.02 2380.39

71519.14 52100.07

31.03.2009 31.03.2008

On Debentures 429.13 569.50On Term Loans 2570.41 1510.40Bank and Others 949.60 135.19Finance Expenses 395.74 131.78

4344.88 2346.87

Schedule – R INTEREST AND FINANCE EXPENSES


1. Significant Accounting Policiesa. Accounting Convention

The accounts, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been prepared on thebasis of the historical cost and on the accounting principles of a going concern. The accounts have been prepared in accordance withthe provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (Accounting Standards) Rules, 2006.

b. Use of EstimatesThe preparation of financial statements require management to make estimates and assumption that affect the reported amountof assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reportedamounts of income and expenses during the year. Difference between the actual results and the estimates are recognised in the yearin which the results are known /materialised.

c. Fixed AssetsFixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have been revaluedor at fair value as the case may be.

d. Depreciation and AmortisationTangible Assetsi. Depreciation except otherwise stated has been provided at the rates specified under Schedule XIV to the Companies Act, 1956

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

ii. Certain Plant and Machinery have been considered as continuous process plant as defined under Schedule XIV to the CompaniesAct, 1956 on the basis of technical evaluation.

iii. Depreciation on increase in value of Fixed Assets due to revaluation is provided on the basis of remaining useful life as estimatedby the valuer on the straight line method and is transferred from Revaluation Reserve to Profit and Loss Account.

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

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

Intangible Assetsvi. Computer Softwares are amortised on straight line method @33.33% over a period of three years.

e. ImpairmentFixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assetsbelonging to Cash Generating Unit (CGU) exceeds recoverable amount. The recoverable amount is the greater of assets net sellingprice or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to theirpresent value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such losseither no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets,which in case of CGU, are allocated to its assets on a prorata basis.

f. InvestmentsLong Term Investments are stated at cost, less provision for diminution in value other than temporary, if any. Current Investmentsare valued at cost or fair value whichever is lower.

g. InventoriesInventories are valued at the lower of cost or estimated net realisable value. In respect of Raw Materials, Stores, Spare Parts, Fuel,Building and Packing Materials the cost includes the taxes and duties other than those recoverable from taxing authorities and otherexpenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost includes manufacturingexpenses and appropriate portion of overheads. The cost of inventories is determined on the weighted average basis.

Own manufactured moulds used for the manufacture of glass items are recorded at weighted average cost, which includes primecost, factory and general overheads and the same are classified as stores and spare parts under inventories.

h. Foreign Exchange Transactions and DerivativesTransactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currencymonetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon and also on the


Schedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS


exchange differences on settlement of the foreign currency transaction during the year are recognised as income or expenses in theProfit and Loss Account.

Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency risk onunexecuted firm commitments or of highly probable forecast transactions are recognised in the period in which they arise and thedifference between the forwards rate and exchange rate at the date of transaction is recognised as income/expense over the life ofthe contract.

Keeping in view the announcement of “The Institute of Chartered Accountants of India” dated March 29, 2008 regarding accountingfor derivatives, mark to market losses on all other derivatives contracts (other than forward contracts dealt as above) outstandingas at the year end, are recognised in the accounts.

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

ii) Income from Export Incentives, Insurance and other claims etc. is recognised on the basis of certainties as to its utilisation andrelated realisation.

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

j. CENVAT / Value Added Tax (VAT) CreditCenvat / VAT credit whenever availed on Fixed Assets is set off with the cost of the assets. Other Cenvat / VAT credit wherever availedis adjusted with the cost of purchases of Raw Material or Stores as the case may be.

k. Employee BenefitsEmployee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Plan for itsemployees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fund which arefully funded and administered by the Trustees / Government. The Company contributes to the Employees’ Pension Scheme, 1995for certain categories of employees. Contributions are recognised in the Profit and Loss account on accrual basis.

Long-term employee benefits under defined benefit scheme such as gratuity, leave encashment etc. are determined at the close ofeach year at the present value of the amount payable using actuarial valuation techniques.

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

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

m. Subsidies and GrantsCash Subsidy related to Fixed Assets to the extent received is adjusted to the cost of respective fixed assets. Subsidy related to thetotal investment in the project is treated as Capital Reserve. Other Government grants including incentives etc. are credited to Profitand Loss Account or deducted from the related expenses.

n. Borrowing CostBorrowing costs that are attributable to the acquisition/construction of Fixed Assets are capitalised as part of the cost of respectiveassets. Other borrowing costs are recognised as an expense in the year in which they are incurred.

o. Income TaxProvision for Tax is made for current tax, deferred tax and fringe benefit taxes. Current tax is provided on the taxable income usingthe applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capableof reversal in subsequent periods are recognised using tax rates and tax laws, which have been enacted or substantively enacted.Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will beavailable against which such deferred tax assets will be realised. In case of carry forward of unabsorbed depreciation and tax losses,deferred tax assets are recognised only if there is “virtual certainty” that such deferred tax assets can be realised against futuretaxable profits.

p. LeaseWhere the Company is the lessee, finance leases, which effectively transfer to the Company substantially all the risks and benefitsincidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of the minimum leasepayments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance

Schedules forming part of the AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)


charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income.Lease management fees, legal charges and other initial direct costs are capitalised.

Leases rentals in respect of assets taken under finance lease up to March 31, 2001 are amortised over the total term of the lease(including extended secondary lease term).

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified asoperating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis overthe lease term.

q. Provision, Contingent Liabilities and Contingent AssetsProvisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a resultof past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosedin the financial statements. Contingent Liabilities, if material are disclosed by way of notes.

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

NOTES ON ACCOUNTS


2008-09 2007-08

2) Contingent liabilities not provided fora) Outstanding Bank Guarantees / Letter of Credit 6410.93 1384.86b) Income Tax matter in respect of erstwhile AGCL under dispute Nil 3.41c) Sales Tax matter under appeals 216.88 214.25d) Excise Duty and Octroi demand issued against which the Company has preferred appeals

and which in the opinion of the management are not tenable. 1639.10 1703.25e) Cases pending with labour courts (to the extent ascertainable) 544.44 549.59f) Claim for increased price of land acquired at Bahadurgarh by the then Punjab Government

and given to the Company against which the claimants have preferred an appeal in theSupreme Court against the order of the High Court. 0.30 0.30

g) Amount of duty against Export Obligation in respect of exemption availed againstAdvance License Scheme. 19.19 4.32

h) Other Claims against the Company not acknowledged as debt. 105.91 26.10i) Counter Guarantee furnished to Government and other authorities on behalf of Glass

Equipment (India) Ltd. (Subsidiary Company) – 381.00Notes :On the basis of current status of individual cases and as per the legal advice obtained, wherever applicable the management is of the view that no provision is required in respect of these cases. Further Cash outflow in respect of item no. b) to h) as mentioned aboveis dependent upon outcome of final judgment/decision.

3) In respect of Neemrana Plant a notice has been received from Civil Court filed by the Nil Nilcreditors of Haryana Sheet Glass Limited demanding their outstanding payments and stating that plant can not be transferred unless their dues are paid. However, the matter is under dispute/litigation.

4) Capital commitments (Net of advance of Rs 1319.85 lacs previous year Rs 356.46 lacs) 10431.39 1212.885) Capital work in progress includes pre-operative expenses pending allocation.

a) Salary and Wages Nil 23.99b) Power and Fuel 11.24 23.02c) Miscellaneous expenses 150.80 31.21d) Interest on Term Loan 180.16 239.25Add: Brought Forward from previous year 413.97 163.97Less: Capitalised 756.17 67.47Total Carried Forward Nil 413.97Capital work in progress includes Rs 714.75 Lacs on account of advances and Rs 5804.27 lacs on account of equipments/materials procured.

(Rs in lacs)



6) Fixed Assets at Nashik Plant are estimated to have lower residual lives than that envisaged as per the rates provided in Schedule XIV ofthe Companies Act, 1956. Depreciation has been provided based on the estimated shorter residual lives as follows:

Particulars of Fixed Assets Rates as Rates ofprescribed by Depreciation on

Schedule XIV to assets appliedthe Companies

Act, 1956

Buildings (other than factory buildings) 1.63 2.04Factory Buildings 3.34 5.21Plant and Machinery

Used for single shift operations 4.75 11.44Continuous Process Plant 5.28 11.44Used for Triple Shift operations 10.34 11.44

Furniture & Fixtures 6.33 17.37Computers 16.21 17.95

2008-09 2007-08

7) i) Land and Buildings of Rishra and Bahadurgarh units were revalued by an approved 10891.99 10891.99valuer on April 1, 1992 and on March 31, 2006 on current replacement cost basis. Accordingly, net amount transferred to Revaluation Reserve Account.

ii) Plant and Machinery of Rishra and Bahadurgarh units were revalued by an approved 4831.31 4831.31valuer, on April 1, 1995 on current replacement cost basis. Accordingly, net amount transferred to Revaluation Reserve Account.

iii) Depreciation transferred from Revaluation Reserve Account to Profit and Loss Account. 223.55 281.21

(Rs in lacs)

2008-09 2007-08

a) Payment to Statutory Auditors:*i) Audit Fees 5.00 9.00ii) Tax Audit Fees 1.50 1.50iii) Management Services and Certification work 5.04 2.00iv) Reimbursement of Expenses 0.40 2.48

b) Payment to Branch Auditors*i) Audit Fees 4.00 Nilii) Management Services and Certification work 2.31 Niliii) Reimbursement of Expenses 2.99 Nil* excluding Service Tax

c) Directors Travelling Expenses 30.15 33.47

8) Miscellaneous Expenses include

2008-09 2007-08

9) Sundry Creditor include acceptances 4388.48 392.14




2008-09 2007-08

Profit after Tax (Rs in lacs) 10774.62 16033.89Number of shares outstanding 17467713 17467713Earning per share (Basic) (Rs.) 61.68 91.79

10) Earning per share

2008-09 2007-08

Profit before tax as per Profit and Loss Account 11771.75 12107.48Add: Directors' Remuneration 159.77 126.59

Executive Directors’ Commission 131.08 110.40Non Executive Directors' Commission 8.00 8.00

Total 12070.60 12352.47Profit under Section 198 of the Companies Act, 1956. 12070.60 12352.47Commission Payablea) To the Managing Director @ 1.00% of Net Profit restricted to Annual Salary 63.48 55.20b) To the Joint Managing Director @ 1.00% of Net Profit restricted to Annual Salary 63.48 55.20c) To the Executive Director @ 0.50% of Net Profit restricted to Annual Salary 4.13 Nild) To the Non Executive Directors @1.00% of Net Profit restricted to Rs 1.00 lac per Director 8.00 8.00

(Previous Year Rs 1.00 lac per Director)

11) Computation of Net Profit in accordance with Section 198 of the Companies Act, 1956 and Commission payable to Directors

2008-09 2007-08

i) Salaries 139.23 110.40ii) Contribution to Provident and Other Funds 16.23 13.25iii) Other Perquisites 4.31 2.94iv) Commission 139.09 118.40

12) Directors' Remuneration include:

13) Financial and Derivative Instruments:a) The Company had entered into certain derivative transactions, the cash flows arising therefrom being recognised in the books of

account as and when the settlements took place in accordance with the terms of the respective contracts over the tenure thereof.However, in pursuance of announcement dated March 29, 2008 of “The Institute of Chartered Accountants of India” on “Accountingfor derivatives” and as a matter of prudence:

i) mark to market loss on account of derivative transaction as on March 31, 2009 estimated to be Rs 510.46 lacs out of which Rs 313.94 lacs has been provided in previous year and balance has been accounted during current year.

ii) in respect of another derivative contract in respect of which the claim raised was at Rs 404.18 lacs as on March 31, 2008 hasceased to exist on November 19, 2008 and Knock Out intimation has since been received during the year. The Claim raised onthe Company interalia including on account of daily range accrual as on March 31, 2009 estimated to be Rs 1636.53 lacsincluding interest has been provided for during the year.

The matters are subjudice and the Company has been legally advised that these contracts are void ab- initio.

2008-09 2007-08

b) Outstanding derivative instruments 510.46 3993.25c) Foreign currency exposure outstanding as on March 31, 2009 whish has not been

hedged by the derivative instruments:Loans – 9297.11Creditors 3203.02 1779.73Debtors 208.72 1069.01

d) The amount of Exchange Gain/(Loss) of Foreign Currency Transaction adjusted to 362.40 310.07respictive heads of accounts of the Profit and Loss Account

(Rs in lacs)



15) Prior Period item aggregating Rs 448.03 lacs (previous year Rs Nil) has been booked under the head Miscellaneous expenditure in theProfit and Loss Account. Pursuant to the Scheme of Amalgamation and Re-organization of Capital (the Scheme) under Section 391 to394 of the Companies Act, 1956, with effect from April 1, 2006, (the appointed date), Ace Glass Containers Limited (AGCL) had mergedwith the Company in the previous year. In terms of the Scheme, all fixed assets were recorded at the fair values as of the appointed date.While recording such assets in the books in the previous financial year, the value of certain assets were overstated / understated. Theseassets have now been restated in current year at their appropriate value by decreasing an amount of Rs 527.77 lacs in the value of fixedassets and prior period income adjustment by Rs 79.74 lacs in respect of discarded assets.

16) The following expenses, incurred on manufactured Moulds have been capitalised and netted from the respective heads of accounts inthe Profit and Loss Account.

2008-09 2007-08

Stores and Spares parts consumed 429.76 399.16Power and Fuel 29.27 26.44Salaries, Wages and Bonus 95.93 81.15Contribution to Provident and other funds 5.55 5.78Workman and Staff Welfare Expenses 3.69 3.42Repair and Maintenance – Machinery 2.40 1.17Repair and Maintenance – Others 115.64 95.68Miscellaneous Expenses 11.47 10.70Total 693.71 623.50

(Rs in lacs)

17) a) The breakup of Deferred Tax Assets and Deferred Tax Liabilities is as given below:

b) In terms of Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 as sanctioned by the Hon’ble High Courtof Calcutta vide its Order dated April 7, 2008 and by Hon’ble High Court at Delhi vide its Order dated March 19, 2008, deferred taxliability of Rs 2369.18 lacs for the year has been adjusted to Share Premium Account.

c) The Company has provided for Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and accordingly, based onevidences MAT Credit of Rs 355.00 lacs (previous year Rs 1367.57 lacs) has been recognised in these accounts.

d) Provision for Income Tax has been made after considering the set off of unabsorbed depreciation and brought forward business lossof erstwhile Ace Glass Containers Limited merged with the Company with effect from April 1, 2006.

Opening as on (Charge)/ Credit Closing as at 01.04.2008 during the year 31.03.2009

Deferred Tax AssetsBrought Forward Losses and unabsorbed depreciation 1956.04 (1956.04) –Expenses Allowable on Payment Basis 396.12 274.60 670.72Provision for Loss on Derivative transactions 106.71 623.06 729.77Provision for doubtful debts 347.69 (54.45) 293.24Total Deferred Tax Assets 2806.56 (1112.83) 1693.73Deferred Tax LiabilitiesDepreciation 4614.08 1256.35 5870.44Total Deferred Tax Liabilities 4614.08 1256.35 5870.44Net Deferred Tax Liabilities (1807.52) (2369.18) (4176.71)

2008-09 2007-08

14) a) Electricity duty waiver benefit under State Incentive Schemes and subsidy received 108.76 81.78 under State Incentive has been credited to Power and Fuel Account.

b) Interest subsidy towards Interest on Term Loan receivable under State Investment 75.21 –Promotion Policy has been adjusted with Interest on Term Loan paid.

c) Amount included in VAT Credit Inputs Account shown under Loans and Advances can be 515.23 411.40 utilised only after repayment of corresponding amount of Sales Tax Deferred Loan. Thebalance amount of Rs 78.62 lacs (Previous year Rs 201.84 lacs) is available for utilisation.



Outstanding as Maximumon 31.03.2009 balance

Outstandingduring the year

1) No interest or interest below the rates specified in Section 372A of Companies Act, 1956* 19.76 40.092) Repayment beyond seven years or no repayment schedule NIL NIL3) Repayment on Demand 19.76 40.094) Loan to Associates NIL NIL5) Investment by Associates NIL NIL

18) Disclosure pursuant to Clause 32 of Listing Agreement

* Notes:1. Advance to employees pursuant to general business practice and employees welfare.

2. Interest free advances in the nature of loans and advances given to employees as per general rules of the Company have not beenconsidered.

19) The Company has incurred Rs 38.26 Lacs (Previous year Rs 7.91 lacs) on account of Research and Development expenses, which has beencharged to Profit and Loss Account.

20) As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard aregiven below:

Defined Contribution SchemeContribution to Defined Contribution Plan, recognised for the year are as under:

Employer’s Contribution to Provident Fund 205.68Employer’s Contribution to Pension Fund 235.76Employer’s Contribution to Superannuation Fund 16.29

(Rs in lacs)

The guidance note on implementing Accounting Standard (AS-15) (Revised 2005) on Employees Benefits issued by Accounting StandardBoard (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be made by the employersneeds to be treated as “Defined Benefit Plan”. According to the management, in consultation to the actuary, it is not practical or feasibleto actuarially value the Provident liability in the absence of any guidance from Actuarial Society of India and also due to the fact thatthe rate of interest as notified by the Government can vary annually. Accordingly, the Company is currently not in a position to provideother related disclosures as required by the aforesaid AS – 15 read with ASB guidance. However, with regard to the position of the fundand confirmation to the Trustees of such fund, there is no shortfall as at year-end.

Defined Benefit PlanThe employees’ gratuity fund scheme managed by Birla Sun Life Insurance is a defined benefit plan. The present value of obligation isdetermined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving riseto additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation forleave encashment is recognised in the same manner as gratuity.

I. Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances thereofare as follows:

Gratuity Gratuity Leave Encashment Funded Unfunded Unfunded

Liability at beginning of the year 619.29 726.88 198.01Current Service Cost 53.44 66.83 26.02Interest Cost 44.23 57.78 16.74Actuarial (Gain) / Loss 68.53 (98.01) 29.93Benefits paid 59.21 (35.86) (0.23)Liability at the end of the year 726.27 717.61 246.17



IV. Balance Sheet Reconciliation


Opening Net Liability 21.92 726.88 198.01Expenses as above 152.93 26.59 72.68Employers Contribution 40.82 35.86 24.51Amount Recognised in Balance Sheet 726.27 717.61 246.17

(Rs in lacs)

V. Compensated AbsencesThe actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the Company asat March 31, 2009 is Rs 246.17 lacs.

The estimates of rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion andother relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assetsheld, assessed risks, historical results of return on plan assets and the Company’s policy for plan assets management.

The contributions expected to be made by the Company for the year 2009-10 is yet to be determined.


Mortality Table LICI 1994-1996 LICI 1994-1996 LICI 1994-1996Discount rate (per annum) 7.50 % 8.00 % 8.50 % / 7.50 %Expected rate of return on plan assets (per annum) 8.00 % 8.00 % 8.00 %Rate of escalation in salary (per annum) 5.00% 5.00 % 5.00 %

III. Expense recognised in the Income statement (Under the head “Contribution to provident and other funds” – Refer Schedule Q)


Current Service Cost 53.44 66.83 26.02Interest Cost 44.23 57.78 16.74Expected Return on plan assets 47.79 Nil NilNet Actuarial (Gain) / Loss to be recognised 103.05 (98.01) 29.93Expenses recognised in Profit and Loss account 152.93 26.59 72.68

VI. Principal Actuarial assumptions at the Balance Sheet Date

II. Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:

Gratuity (Funded)

Fair value of plan assets at the beginning of the year 597.37Expected return on plan assets 47.79Actuarial Gain / (Loss) (34.53)Employer contribution 40.82Benefits paid 59.21Fair value of plan assets at the end of the year 592.24



Particulars 2008-09 2007-08

Domestic Market 130992.67 109628.28Overseas Market 12734.64 4333.90Total 143727.31 113962.18

(Rs in lacs)

The following table shows the distribution of the Company’s Debtors by Geographical market.

Sundry Debtors by Geographical Market



22) The accounts of some of the customers are pending reconciliation / confirmation and Sales Tax deferment loan of Rs 1610.55 lacs issubject to confirmation and the same have been taken as per the balances appearing in the books.

A provision of Rs 863.04 lacs (Previous year Rs 991.53 lacs) is carried in the books against doubtful debts and the management is ofthe opinion that the same is adequate and no further provision is required there against.

23) In the opinion of the Management/Board of Directors, the “Current Assets, Loans and Advances” have a value on realisation in theordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

24) Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status ofthe suppliers as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” (the Act). There are no delays inpayment made to such suppliers. There is no overdue amount outstanding as at the balance sheet date. Based on above the relevantdisclosures u/s 22 of the Act are as follows:

25) Profit or loss on sale of Raw Materials and Stores has been adjusted in consumption.

26) Stores and Spare Parts consumption includes materials consumed for Repairs and Replacement.

27) Inventories of Stores and Spare Parts include items, which are lying with the Company. A provision of Rs 679.51 lacs (including Rs 61.48lacs for the year) towards obsolescence is carried in the books and the management is of the opinion that the same is adequate and nofurther provision is required there against.

28) Related Party Disclosures as identified by the management in accordance with the Accounting Standard – 18.A) Subsidiary Companies

i) Glass Equipment (India) Limitedii) Quality Minerals Limited

B) Associatei) HNG Float Glass Limited

C) Directors and Relativesi) Mr C. K. Somany – Chairman and Non Executive Director (Relative of Key Management Personnel)ii) Mr Sanjay Somany - Managing Director and Key Management Personneliii) Mr Mukul Somany - Jt. Managing Director and Key Management Personneliv) Mr Bharat Somany – Management Trainee (Relative of Key Management Personnel)v) Mr R. R. Soni – Executive Director and Key Management Personnel (with effect from October 27, 2008)

1. Principal amount outstanding at the end of the year 68.342. Interest amount due at the end of the year Nil3. Interest paid to suppliers Nil

21) The Company’s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management thisis the only reportable segment, as per the Accounting Standard 17 on Segment Reporting, issued under Companies (AccountingStandards) Rules, 2006.

Geographical SegmentThe following table shows the distribution of the Company’s Sales by Geographical market.

Sales Revenue by Geographical Market



2008-09 2007-08

Sale of GoodsGlass Equipment (I) Ltd. 35.21 8.90Purchase of GoodsGlass Equipment (I) Ltd. 1189.36 1104.24Quality Minerals Ltd. 269.10 237.06Sale of Fixed AssetsGlass Equipment (I) Ltd. 6.12 NilPurchase of Fixed AssetsGlass Equipment (I) Ltd. 1499.43 954.92Receiving of ServicesGlass Equipment (I) Ltd. 343.79 48.06Provision of FacilitiesGlass Equipment (I) Ltd. 16.00 16.00Dividend ReceivedGlass Equipment (I) Ltd. 26.40 0.26Counter Guarantees GivenGlass Equipment (I) Ltd. 381.00 381.00Counter Guarantees TakenGlass Equipment (I) Ltd. 50.00 50.00PayablesGlass Equipment (I) Ltd. 661.04 658.58Quality Minerals Ltd. 7.58 55.42

(Rs in lacs)

The aggregate amount of transactions with the related parties as mentioned in (A) above is as given hereunder:

The aggregate amount of transactions with the related party as mentioned in (B) above is as given hereunder:

2008-09 2007-08

Sale of Goods 46.06 NilPurchase of Goods 2.51 NilReceiving of Services 0.47 NilPayables 28.65 Nil

The aggregate amount of transactions with the related parties as mentioned in (C) above is as given hereunder:

Remuneration 2008-09 2007-08

1. Mr Sanjay Somany 135.01 117.022. Mr Mukul Somany 137.73 117.023. Mr Bharat Somany 2.34 1.804. Mr R. R. Soni 18.11 Nil

D) Enterprises over which any person described in [C (i) to (iv)] above is able to exercise significant influence and with whomthe Company has transactions during the year.i) AMCL Machinery Limitedii) Ceramic Decorators Limitediii) Microwave Merchants Private Limitediv) Mould Equipmentv) Noble Enclave and Towers Private Limitedvi) Somany Foam Limitedvii) Topaz Commerce Limited



* Companies in which directors are interested as member / director(s). Further, these loans were given by the erstwhile Ace GlassContainers Limited (AGCL) and none of the directors was director in AGCL and accordingly, as advised legally, the provisions of Section295 of the Companies Act, 1956 are not applicable with regard to these loans.

E) Transactions for purchase of goods with Mould Equipments are covered under Section 297 of the Companies Act, 1956. Steps arebeing taken to obtain Central Government approval for such transactions.

The aggregate amount of transactions with the related parties as mentioned in (D) above is as given hereunder:

2008-09 2007-08

Sale of GoodsSomany Foam Ltd. 3.21 NilPurchase of GoodsMould Equipment 11.70 23.98Somany Foam Ltd. 2.86 1.61Sale of Fixed AssetsSomany Foam Ltd. 0.42 1.05Purchase of Fixed AssetsSomany Foam Ltd. Nil 1.33Receiving of ServicesCeramic Decorators Ltd. 112.21 89.08Mould Equipment 152.93 212.06Rent ReceivedMould Equipment 27.97 13.20Interest ReceivedMicrowave Merchants Pvt. Ltd. 36.48 7.67Noble Enclave & Towers Ltd. 154.81 14.14Topaz Commerce Ltd. 209.17 15.48Recovery of ExpensesAMCL Machinery Ltd. 4.04 NilInterest PaidCeramic Decorators Ltd. 10.67 9.84AMCL Machinery Ltd. 28.19 NilLoan TakenCeramic Decorators Ltd. 1.70 64.00AMCL Machinery Ltd. 1500.00 NilLoan GivenMicrowave Merchants Pvt. Ltd. Nil 900.00Noble Enclave & Towers Ltd. Nil 1800.00Topaz Commerce Ltd. Nil 1800.00Loan RepaidCeramic Decorators Ltd. 18.90 NilAMCL Machinery Ltd. 1500.00 NilReceivablesSomany Foam Ltd. 0.56 0.04Loans (including interest accrued net of recovery)Microwave Merchants Pvt. Ltd.* 266.22 905.93Noble Enclave & Towers Ltd.* 1140.73 1810.93Topaz Commerce Ltd.* 1728.27 1811.98PayablesCeramic Decorators Ltd. 2.97 77.36Mould Equipment 6.50 6.30

(Rs in lacs)



29) Units of Bonds & Mutual Funds purchased and redeemed / sold during the year (Face value of Rs 10 each, except otherwise stated)

30) a) The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Blocks of Buildings andVehicles. The lease term is 75 years for Building. The lease term is 3 years for Vehicles, after which the legal title will pass on theCompany. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum lease paymentspayable in future at the balance sheet date and their present value are as under There is no escalation clause in the lease agreementfor vehicles.:

b) Assets taken under operating leases:Office premises and office equipments are obtained on operating lease. There is no contingent rent in the lease agreements. Thelease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the leaseagreements. There are no restrictions imposed by lease agreements. There are no sublease and all the leases are cancelable in nature.The aggregate lease rentals are charged as “Rent” in Schedule ‘Q’ of the financial statement.

(Rs in lacs)

2008-09 2007-08

Sl. No. Name of Fund No. of Units Cost No. of Units Cost

a) Sardar Sarovar Narmada Nigam Ltd. – DDB 2014 Nil Nil 69 34.55b) Prudential ICICI Liquid Fund Nil Nil 9931 1.74c) Birla Cash Plus Fund Nil Nil 1437485 300.00d) ING Vyasya Liquid Fund Nil Nil 4186735 500.00e) Birla Sun Life Cash Morgan Fund Nil Nil 10687377 1900.00f) HDFC Liquid Fund Nil Nil 6700893 1025.74g) UTI Liquid Cash Plan Nil Nil 49848 625.00h) HDFC Floating Rate Income Fund Nil Nil 7602172 1099.26i) Kotak Floater Short Term Plan Nil Nil 2397372 300.00

Total Nil Nil 33071882 5786.29

Particulars Lease payments Present value

Not later than one year 30.89 21.19Later than one year and not later than five year 86.32 69.89

31) Adjustment made in Reserve and Surplus Account

2008-09 2007-08

a) Adjustment made in General Reserve AccountAdd: Adjustment consequent upon amalgamation of erstwhile Ace Glass Containers Ltd. Nil 31391.22Add: Transfer from Capital Reserve Nil 0.04Add: Transfer from Profit & Loss Account 7000.00 14850.00Less: Adjustment on account of transitional provision under AS-15 Nil 118.63Less: Loss on Ace Glass Containers Limited for the year ended March 31, 2007 Nil 3146.66Less: Carrying Cost of shares held in erstwhile Ace Glass Containers Limited pursuant to

the Scheme of Amalgamation Nil 7.55Less : Merger expenses and others Nil 83.18Total 7000.00 42885.24

b) Revaluation Reserve AccountAdd: Revaluation of Land and Buildings Nil 7554.80Less: Transfer to Profit and Loss Account 223.55 281.21Less : Adjustment on account of sale/ discard of assets 1.47 60.75Total (225.02) 7212.84

c) Debenture Redemption ReserveAdd: Transfer from Profit and Loss Account 1250.00 NilTotal 1250.00 Nil

d) Share Premium AccountAdd: Adjustment consequent upon amalgamation of erstwhile Ace Glass Containers Ltd. Nil 12449.54Less: Deferred Tax Liability 2369.18 NilTotal (2369.18) 12449.54



2008-09 2007-08

Installed Actual Installed ActualCapacity Production Capacity Production

I. Glass Plantsa) Glass Bottles and Vials 927669 767971 849525 691359b) Pressed Tumblers 5000 – 5000 –

SALES* STOCKS

2008-09 2007-08 2008-09 2007-08Unit Qty. Value Qty. Value Qty. Value Qty. Value

Bottles MT 765459 143725.62 695820 113961.15 46797 6990.08 44285 5735.68Tumblers MT 19 1.69 10 1.03 – – 19 1.05Others # (Job Works) 132.32 871.72 – –Total 143859.63 114833.90 6990.08 5736.73

32) Details of Products Manufactured, Turnover, Stock, Raw Material Consumed etc.a) Capacities and Actual Production:

Notes: 1. Installed Capacity and Actual Production has been given in MT.

2. Licensed Capacity is not given as licensing has been abolished vide Press Note No.9 dated August 2, 1991 and Notification No.S.O.477 (E) dated July 25, 1991 issued by Government of India, Ministry of Industry and Department of Industrial Development. Theinstalled capacity is as certified by the management.

b) Finished Goods Stocks and Sales:

* Sales includes breakages of bottles

# Others include General Merchandise Sale amounting to Rs 76.95 lacs (Previous Year Rs 163.03 lacs) and sale of services Rs 55.37 lacs. (Previous year Rs 708.69 lacs)

c) Details of Purchases and Sales of General Merchandise:

2008-09

Opening Stock Purchase Sales Closing Stock

Description Unit Qty. Value Qty. Value Qty. Value Qty. Value

LUG Cap ‘000 pcs – – 179 – 179 1.16 – –Glass Bottle MT – – 969 56.97 969 75.79 – –Float Glass Sq. mt. 12020.50 44.16 – – 12020.50 55.37 – –Total 44.16 56.97 132.32 –

(Rs in lacs)

2007-08

Opening Stock Purchase Sales Closing Stock

Description Unit Qty. Value Qty. Value Qty. Value Qty. Value

Roop Cap ‘000 pcs – – 90 1.67 90 2.44 – –Glass Bottle MT – – 1213 93.03 1213 103.36 – –Float Glass Sq. mt. – – 26580.74 97.46 14560.24 57.23 12050.50 44.16Total – 192.16 163.03 44.16


2008-09 2007-08

Item Unit Quantity Value Quantity Value

Silica Sand MT 348388 4998.83 316354 4131.34Soda Ash MT 155257 18315.31 109442 12903.40Cullet MT 281086 11182.35 232458 8049.13Others MT 4637.33 3914.85Total 39133.82 28998.72


d) i) Raw Materials Consumed *

e) C.I.F. Value of Imports

* Excluding Rs 118.32 lacs (Previous Year Rs 60.73 lacs) being raw material processing charges.

ii) Value of Raw Materials, Spare Parts and Components Consumed (As certified):

* Excluding Rs 1676.49 lacs (Previous Year Rs 1265.59 lacs) being Stores consumption.

2008-09 2007-08

Raw Materials Spare Parts* Raw Materials Spare Parts*Value % Value % Value % Value %

Imported 8181.10 20.91 1573.41 25.68 6502.61 22.42 1219.43 27.08Indigenous 30952.72 79.09 4552.60 74.32 22496.11 77.58 3282.81 72.92Total 39133.82 100.00 6126.01 100.00 28998.72 100.00 4502.24 100.00

(Rs in lacs)

2008-09 2007-08

Raw Materials 6489.33 5698.52Components, Spare Parts and Stores etc. 4894.01 1497.50Capital Goods (including CWIP) 5131.73 1939.26

f) Expenditure in Foreign Currency

2008-09 2007-08

Travelling Expenses 27.41 29.07Selling Commission 62.22 46.85Finance Charges 153.54 164.83Repairs 47.36 6.47Professional / Technical Fees 94.27 24.96Others 0.04 0.06

g) Earnings in Foreign Currency

33) Figures for previous year have been regrouped and/or rearranged wherever considered necessary.

34) Schedule "A" to "L" and "S" form part of Balance Sheet and Schedule "M" to "S" form part of Profit and Loss Account.

2008-09 2007-08

F.O.B. Value of Exports 5772.77 4032.46



Mukul Somany Sanjay SomanyJt. Managing Director Managing Director

Kolkata Priya Ranjan Nirmal KhannaJune 20, 2009 Company Secretary Sr. Vice President and

Chief Financial Officer

Balance Sheet AbstractStatement Pursuant to Part IV of Schedule VI to the Companies Act, 1956Balance Sheet Abstract and the Company’s General Business Profile

2 1 - 1 3 2 9 4

3 1 0 3

Registration No. State Code

Balance Sheet Date

I. Registration Details

II. Capital Raised during the year (amount in Rs ’000)

III. Position of Mobilisation and Deployment of Funds (amount in Rs ’000)

2 0 0 9

2 1

Total Assets

Private Placement

N I L

Sources of Funds

Application of Funds

Reserves and Surplus

IV. Performance of the Company (amount in Rs ’000)

Item Code No. (ITC code) Product descriptions

V. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)

Rights Issue

N I L

Bonus Issue

N I L

Public Issue

N I L

1 7 4 1 0 0 7 1

Total Liabilities

1 7 4 1 0 0 7 1

9 1 7 7 1 2 6

Unsecured Loans

9 2 1 0 6 5

Paid–up Capital

1 7 4 6 7 7

Secured Loans

4 1 5 2 3 8 1

Deferred Tax Liabilities

4 1 7 6 7 1

Net Fixed Assets

9 8 8 5 1 7 3Net Current Assets

3 9 1 1 9 0 1

Accumulated Loss

N I L

Net Income

1 3 4 4 1 9 4 0

Earnings per Share in Rs

6 1 . 6 8

7 0 1 0 9 0 - 0 1

Total Expenditure

1 2 2 6 4 7 6 5

Dividend %

5 0 . 0 0

Profit / Loss Before Tax

1 1 7 7 1 7 5

Profit / Loss After Tax

1 0 7 7 4 6 2

G L A S S B O T T L E S

Investments

1 0 4 5 8 4 6Miscellaneous Expenditure

N I L

Item Code No. (ITC code) Product descriptions

7 0 1 3 0 0 - 0 0 G L A S S W A R E

L 2 6 1 0 9 W B 1 9 4 6 P L C 0 1 3 2 9 4CIN No.



Statement Regarding Subsidiary Companies Pursuant to Section 212 of Companies Act, 1956

Mukul Somany Sanjay SomanyJt. Managing Director Managing Director

Priya Ranjan Nirmal KhannaKolkata Company Secretary Sr. Vice President andJune 20, 2009 Chief Financial Officer

1. Name of the Subsidiary Company Glass Equipment (India) Ltd. Quality Minerals Ltd.

2. The Financial Year of the Subsidiary Company. Year ended on March 31, 2009 Year ended on March 31, 2009

3. Holding Company’s interest Entire Subscribed Capital comprising 9,384 Equity Shares of Rs 100/- each

of 26,400 Equity Shares of Rs 100/- each. out of the Subscribed and Paid Up

Capital of 9,410 Equity Shares of

Rs 100/-each.

4 Extent of holding 100.00% 99.73%

5 Net Profit of the Subsidiary Rs 2,48,65,016/- Rs 21,04,094/-

6 For the financial year of the Subsidiary

A] Profits/(Losses) so far as it concerns the Rs 2,48,65,016/- Rs 20,98,203/-

members of the Holding Company and not

dealt with in the Holding Company’s accounts.

B] Profits/(Losses) so far as it concerns the Rs 26,40,000/- Nil

members of the Holding Company and dealt

with in the Holding Company’s accounts.

7 For previous financial years since it become

a Subsidiary.

A] Profits/(Losses) so far as it concerns the Rs 13,45,14,566/- Rs 1,23,69,899/-

members of the Holding Company and not

dealt with in the Holding Company’s accounts.

B] Profits/(Losses) so far as it concerns the Rs 76,14,263/- Nil

members of the Holding Company and dealt

with in the Holding Company’s accounts.

Glass Equipment (India) Limited | 79

GLASS EQUIPMENT (INDIA) LIMITED

Director’s ReportTo the MembersYour Directors have the pleasure to place before you the Thirty Ninth Annual Report together with Audited Accounts of the Company forthe year ended March 31, 2009.

Financial Highlights

Year ended 31.03.2009 Year ended 31.03.2008

Gross Sales (Including Excise Duty) 28,92,70,494 20,41,14,416Profit Before Interest, Depreciation and Tax 5,32,46,621 3,41,35,624Interest and Finance Charges 31,49,791 25,02,550Profit Before Depreciation and Tax 5,00,96,830 3,16,33,074Depreciation 75,11,057 84,10,910Profit Before Tax 4,25,85,773 2,32,22,164Provision for Current Tax 1,51,70,000 93,20,000Provision for Fringe Benefit Tax 1,64,500 1,29,000Provision for Deferred Tax (7,02,411) (19,71,808)Profit After Tax 2,79,53,684 1,57,44,972Balance brought forward from previous year 44,88,829 68,32,525Amount available for appropriation 3,24,42,513 2,25,77,497AppropriationGeneral Reserve 2,00,00,000 1,50,00,000Proposed dividend 26,40,000 26,40,000Tax on dividend 4,48,668 2,30,88,668 4,48,668 1,80,88,668Balance carried forward to next year 93,53,845 44,88,829

Working Review

The Net Sales of the Company was higher at Rs 2599.25 Lacs as

against Rs 1790.93 Lacs in the previous year. Your Directors are

optimistic about current year’s performance.

Dividend

Your Board of Directors recommend payment of Dividend @

Rs 100/- per share on 26,400 Equity Shares of Rs 100/- each for the

Financial Year 2008-2009.

Directors

Shri Bharat Somany, Shri D.D. Taparia and Shri B.K. Kedia have been

appointed as additional Director of the Company with effect from

December 13, 2008, April 16, 2009 and April 16, 2009 respectively.

Shri J.P. Kasera and Smt. Jaya Kanoria retire by rotation and being

eligible, offer themselves for re-appointment.

Compliance Certificate

In accordance with Section 383A of the Companies Act, 1956, and

Companies (Compliance Certificate) Rules, 2001, the Company has

obtained a certificate from a Secretary in whole time practice

confirming that the Company has complied with all the provisions

of the Companies Act, 1956 and a copy of such certificate is

annexed to this Report.

Auditors

The Auditors Messers Krishan Somani & Associates, Chartered

Accountants, retire at the ensuing Annual General Meeting and are

eligible for re-appointment.

Auditors’ Report

The Notes on Accounts, as referred to in the Auditors Report are

self explanatory and, therefore, do not call for any further

comments.

Particulars of Employees

Statement of particulars of employees pursuant to section 217(2A)

of the Companies Act, 1956, read with Companies (Particulars of

Employees) Rules, 1975 and forming part of Directors’ Report for the

year ended March 31, 2009 is given in the Annexure to the Report.

Industrial Relations

Industrial relations within the Company remained cordial.

Particulars required under section 217(1) (e) of the Companies

Act, 1956: -

A. Conservation of Energy: -

a) Energy conservation measures taken: -

The Company continues to give high priority to energy

conservation.

The following significant measures have been taken: -

i) Periodical and preventive maintenance of electrical

equipment to ensure optimum utilisation of electric

energy.

ii) Phased balancing of machines and lighting load.

iii) Maintaining the power factor by installing the required

capacitors.

(Amount in Rupees)

80 | Glass Equipment (India) Limited

b) Additional Investments and proposals: -

Further energy conservation is planned through replacement

of inefficient equipment and by providing automatic

controls to reduce idle running of equipment.

c) Impact of measures at (a) and (b) for reduction of energy

consumption and consequent impact on cost of production

of goods:-

The energy conservation measures have a nominal

favourable impact on the cost of the products.

d) Total energy consumption and energy consumption per unit

of production as per “Form-A”:-

Not given, as the Company is not covered under the list of

specified industries.

B. Technical Absorption:-

a) Research and Development (R&D):-

The Company is working on development of Import

substitution. The productivity norms and quality of

components are constantly being monitored for

improvement.

b) Technology Absorption, Adaptation & Innovation:-

The Company has not imported technology during the last

5 years. The Company is constantly engaged in in-house

development activities.

C. Foreign Exchange Earnings And Outgo:-

The information on foreign exchange and outgo is contained in

Schedule S(16) (D, E, F & G)

Directors’ Responsibility Statement Pursuant to Section

217(2AA) of the Companies Act, 1956.

Your Directors hereby confirm :-

that the financial statements are prepared in conformity with

the accounting standards issued by the Institute of Chartered

Accountants of India and the requirements of the Companies

Act, 1956, to the extent applicable to the Company, on the

historical cost convention, as a going concern and on the accrual

basis. There are no material departure from prescribed

accounting standards in the adoption of the accounting

standards.

that the directors had selected such accounting policies and

applied them consistently and made judgements and estimates

that are reasonable and prudent so as to give a true and fair

view of the state of affairs of the Company at the end of the

financial year and of the profit of the Company for that year;

that the directors had taken proper and sufficient care for the

maintenance of adequate accounting records in accordance

with the provisions of this Act for safeguarding the assets of the

Company and for preventing and detecting fraud and other

irregularities.


Bahadurgarh C. K. Somany

May 23, 2009 (Chairman)

Annexure to the Directors’ ReportInformation as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules,1975 and forming part of the Directors’ Report for the Company’s financial year ending March 31, 2009 :-

a) Employees, who are employed throughout the financial year :-

Notes:-

1) Remuneration as shown above includes Salary, HRA, Company’s contribution to Provident Fund, Provision for Gratuity, LTA and Medical

Expenses reimbursement.

2) The above employee is relative of Shri Sanjay Somany, Shri Mukul Somany, Shri Bharat Somany and Smt. Jaya Kanoria.

3) The appointment is on contractual basis.

Name Age in Years Qualifications Designation/ Commencement Experience Gross Name of Previous

Nature of of Employment (Years) Remuneration Employer, Post held

Duties (Rupees)

Sri. C.K. Somany 76 Years I.S.C, FBIM Executive October 1, 2000 56 Years 30,61,038 Hindusthan National Glass &

(London) Chairman Industries Limited,

Kolkata, Managing Director

Director’s Report


Registration No. of the Company : 21-65595

Nominal Capital . Rs 40,00,000/-

To,The Members,Glass Equipment (India) Limited,2, Red Cross Place,Kolkata - 700001

I have examined the registers, records, books and papers of GLASSEQUIPMENT (INDIA) LIMITED (the Company) as required to bemaintained under the Companies Act, 1956 (the Act) and the rulesmade thereunder and also the provisions contained in theMemorandum and Articles of Association of the Company for thefinancial year ended on March 31, 2009 (financial year). In myopinion and to the best of my information and according to theexaminations carried out by me and explanations furnished to me bythe Company, its officers and agents, I certify that in respect of theaforesaid financial year.

1. The Company has kept and maintained all registers as stated inAnnexure ‘A’ to this certificate, as per the provisions of the Actand the rules made thereunder and all the entries therein havebeen duly recorded.

2. The Company has duly filed the forms and returns as stated inAnnexure ‘B’ to this certificate, with the Registrar of Companies,Regional Director, Central Government, Company Law Board orother authorities within the time prescribed under the Act andthe rules made thereunder except as otherwise stated.

3. The Company being a Public Limited Company, comments arenot required.

4. The Board of Directors duly met FIVE times respectively on May19, 2008, June 11, 2008, July 27, 2008, December 13, 2008and February 20, 2009 in respect of which meetings propernotices were given and the proceedings were properly recordedand signed in the Minutes Book maintained for the purpose.

5. The Company has not closed its Register of Members during thefinancial year.

6. The Annual General Meeting for the financial year ended onMarch 31, 2008 was held on September 8, 2008, after givingdue notice to the members of the Company and the resolutionspassed there at were duly recorded in Minutes Book maintainedfor the purpose.

7. No Extra-ordinary General Meeting was held during the financialyear.

8. The Company has not advanced any loans to its directors orpersons or firms or Companies referred to under Section 295 ofthe Act.

9. The Company has duly complied with the provisions of Section297 of the Act in respect of contracts specified in that section.

10. The Company has made necessary entries in the registermaintained under Section 301 of the Act.

11. As there were no instances falling within the purview of Section314 of the Act, the Company has not obtained any approvalsfrom the Board of Directors, Members or Central Government.

12. The Company has not issued any duplicate share Certificateduring the financial year.

13. i. There was no allotment/transfer/transmission of securitiesduring the financial year.

ii. The Company has not deposited the amount of dividenddeclared in a separate Bank Account as the Company hasissued a Cheque to the holding Company for dividend onSeptember 9, 2008 which is within five days from the dateof declaration of such dividend.

iii. The Company has paid dividend to the holding Companywithin a period of 30 (Thirty) days from the date ofdeclaration and therefore it has not transferred any amountto Unpaid Dividend Account.

iv. There is no amount lying in unpaid dividend account,application money due for refund and there are no deposits,debentures etc. as on March 31, 2009.

v. The Company has duly complied with the requirements ofSection 217 of the Act.

14. The Board of Directors is duly constituted and the appointmentof directors, additional directors, alternate directors anddirectors to fill casual vacancy have been duly made.

15. The appointment of Whole-time Director has been made inCompliance with the provisions of Section 269 read withSchedule XIII to the Act except that the return in the prescribedform (Form No 25C) has not been filed within 90 days of suchappointment.

16. The Company has not appointed any sole selling agents duringthe financial year.

17. The Company was not required to obtain any approvals of theCentral Government, Company Law Board, Regional Director,Registrar and/ or such authorities prescribed under the variousprovisions of the Act during the Financial year.

18. The Directors have disclosed their interest in the otherfirms/companies to the Board of Directors pursuant to theprovisions of the Act and the rules made there under.

19. The Company has not issued any shares, debentures or othersecurities during the year.

20. The Company has not bought back any shares during thefinancial year.

21. The Company has not issued any Preference Shares orDebentures.

22. There were no transactions necessitating the Company to keepin abeyance any rights to dividend, rights shares and bonusshares pending registration of transfer of shares.

Compliance Certificate


23. The Company has not invited/accepted any deposits during thefinancial year except some temporary amount borrowed duringthe year which has been repaid within the year.

24. The amount borrowed by the Company from directors,members, public, financial institutions, Banks or other duringthe financial year ended March 31, 2009 are within the limitsprescribed under Section 293(1)(d) of the Act have been passedin duly convened Annual General Meeting held on September23, 1996.

25. The Company has made loans and investments and givenguarantees to other bodies corporate in compliance with theprovisions of the Act and has made necessary entries in theregister kept for the purpose.

26. The Company has not altered the provisions of theMemorandum with respect of situation of the Company’sregistered office from one state to another during the year underscrutiny.

27. The Company has not altered the provisions of theMemorandum with respect to the objects of the Companyduring the financial year under scrutiny.

28. The Company has not altered the provisions of the

Memorandum with respect to name of the Company during theyear under scrutiny.

29. The Company has not altered the provisions of theMemorandum with respect to share capital during the yearunder scrutiny.

30. The Company has not altered its Articles of Association duringthe financial year.

31. I have been informed by the management that there was noprosecution initiated against or show cause notice received bythe Company and no fines or penalties or any other punishmentwas imposed on the Company during the financial year, for theoffences under the Act.

32. The Company has not received any money as security from itsemployees during the financial year.

33. The Company has generally deposited both employees’ andemployer’s contribution to Provident Fund generally in time withprescribed authorities pursuant to Section 418 of the Act.

SignatureBabu Lal Patni

Kolkata Company SecretaryMay 23, 2009 C.P.No : 1321

ANNEXURE `A' LIST OF REGISTERS MAINTAINED BY THE COMPANY S.N Particulars Under Section01. Register of Charges 14302. Register of Members 15003. Index of Members 15104. Directors’ Minute Book 19305. Shareholders’ Minute Book 19306. Register of Contracts (Part I) 30107. Register of Contracts (Part II) 30108. Register of Directors 30309. Register of Directors Shareholdings 30710. Register of Investments 372A11. Register of Allotment12. Register of Transfer

ANNEXURE `B' Forms and Returns as filed by the Company with Registrar of Companies, Regional Director, Central Government or otherauthorities during the financial year ended March 31, 2009.

S.N. Form No./Return Filed Under For Date of Whether filed If delay in filing Section filing within prescribed whether requisite

Time additional fee paidYES/NO YES/NO

01. Form No 23AC 220 Balance Sheet 14.10.08 NO YESas at 31.03.2008

02. Form No 66 Proviso to Section 383A (1) Compliance Certificate 30.09.08 YES N.A.03. Form No 20B 159 Annual Return made 06.11.08 YES N.A.

upto 08.09.0804. Form No 32 303 Resignation of 12.07.08 NO YES

Dated 19.05.08 Directors05. Form No 32 303 Appointment 12.01.09 YES N.A

Dated 13.12.08 of Director

Auditors’ Report

To the Members ofGLASS EQUIPMENT (INDIA) LIMITED

1. We have audited the attached Balance Sheet of GLASS

EQUIPMENT (INDIA) LIMITED, as at March 31, 2009, the Profit

and Loss Account and also the Cash Flow Statement of the

Company for the year ended on that date annexed thereto.

These financial statements are the responsibility of the

Company’s management. Our responsibility is to express an

opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards

generally accepted in India. Those Standards require that we

plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting

principles used and significant estimates made by management,

as well as evaluating the overall financial statement

presentation. We believe that our audit provides a reasonable

basis for our opinion.

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

amended to-date, issued by the Central Government in terms

of Section 227 (4A) of the Companies Act, 1956, we enclose in

the Annexure a statement on the matters specified in paragraph

4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we

report that:

a) We have obtained all the information and explanations,


necessary for the purpose of our audit.

b) In our opinion, proper books of accounts as required by law,

have been kept by the Company so far as appears from our

examination of such books.

c) The Balance Sheet and Profit & Loss Account dealt with by

this report are in agreement with the books of account.

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

Account dealt with by this report comply with the

Accounting Standards referred to in sub-section (3C) of

Section 211 of the Companies Act, 1956 to the extent

applicable.

e) On the basis of the written representations received from

the Directors of the Company as at March 31, 2009, and

taken on record by the Board of Directors, we report that

none of Directors is disqualified from being appointed as a

Director of the Company under clause (g) of sub-section (1)

of section 274 of the Companies Act, 1956.

f) In our opinion, and to the best of our information and

according to the explanations given to us, the said accounts

read together with the significant accounting policies and

other notes thereon, give the information required by the

Companies Act, 1956, in the manner so required and give

a true and fair view in conformity with the accounting

principles generally accepted in India :-

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

of the Company as at March 31, 2009; and

ii) In the case of the Profit & Loss Account, of the PROFIT

of the Company for the year ended on that date; and

iii) In the case of the Cash Flow Statement, of the Cash

Flows for the Year ended on that date.

For Krishan Somani & Associates

Chartered Accountants,

Delhi (Krishan Somani)

May 23, 2009 Proprietor

Membership No : 089879



Annexure to the Auditors’ Report

(Referred to in paragraph (3) of our report of even date on the statement of accounts of Messrs. GLASS EQUIPMENT (INDIA) LIMITED

for the year ended March 31, 2009.)

1. a) The Company has maintained proper records showing full

particulars, including quantitative details and situation of

fixed assets.

b) The fixed assets have been physically verified by the

management during the year. In our opinion, the frequency

of verification is reasonable having regard to the size of the

Company and the nature of its assets. The discrepancies

reported on such verification were not material and have

been properly dealt with in the books of account.

c) In our opinion, the disposals of fixed assets during the year

does not affect the going concern assumption.

2. a) The management has conducted the physical verification of

inventory at reasonable intervals, except for inventories lying

with outside parties, which have, however, been confirmed

by them.

b) In our opinion, the procedure followed by the management

for such physical verification are reasonable and adequate in

relation to the size of the Company and nature of its

business.

c) The Company is maintaining proper records of inventory.

The discrepancies noticed on verification between physical

inventories and the book records were not material in

relation to the operation of the Company and the same have

been properly dealt with in the books of account.

3. a) The Company has not granted any loans, secured or

unsecured to Companies covered in the register maintained

under Section 301 of the Companies Act, 1956. Therefore

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

to the Company.

b) The Company had taken an unsecured loan from a

Company listed in the register maintained under Section 301

of the Companies Act, 1956. The maximum balance

outstanding during the year was Rs 70.28 lacs and the

amount was repayable on demand.

c) In our opinion, the rate of interest and other terms and

conditions of the loan taken by the Company, are prima

facie not prejudicial to the interest of the Company.

d) The repayment of principal amount and interest was regular.

4. In our opinion and according to the information and

explanations given to us, there are adequate internal control

procedures commensurate with the size of the Company and

the nature of its business for the purchase of inventory and fixed

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

of our audit no major weakness has been observed in the

internal controls.

5. a) Based on the audit procedures applied by us and according

to the information, explanations and representations given

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

to be entered into the register in pursuance of Section 301

of the Companies Act, have been so entered.

b) Based on the information and explanations given to us, it is

our opinion that the transactions exceeding the value of

Rs Five Lacs in respect of any party during the year have been

made at a prices which are prima facie, reasonable, having

regard to the prevailing market prices at the relevant time

where such prices are available.


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.

For Krishan Somani & Associates


Delhi (Krishan Somani)

May 23, 2009 Proprietor

Membership No : 089879


The Schedules referred to above form an integral part of Balance SheetAs per our report of even dateFor Krishan Somani & AssociatesChartered Accountants

Krishan Somani Bharat Somany C.K. SomanyProprietor Director Chairman

417, Laxmi Tower, Commercial Complex,Azadpur, Delhi - 110033May 23, 2009


(Amount in Rupees)

Schedules 31.03.2009 31.03.2008

SOURCES OF FUNDS

Shareholders' Funds

Share Capital A 26,40,000 26,40,000

Reserves and Surplus B 20,89,54,502 19,21,24,582

21,15,94,502 19,47,64,582

Loan Funds

Secured Loans C 2,80,41,971 2,14,74,337

Unsecured Loans D 65,00,000 65,00,000

3,45,41,971 2,79,74,337

Deferred Tax Liabilities (Net) 30,17,378 37,19,789

Total 24,91,53,851 22,64,58,708


Fixed Assets E

Gross Block 20,74,32,106 20,30,95,292

Less: Depreciation 13,23,32,156 11,65,79,286

Net Block 7,50,99,950 8,65,16,006

Capital Work-in-Progress – 10,40,000

Investments F 27,269 –


Current Assets

Inventories G 12,80,37,192 9,93,48,598

Sundry Debtors H 7,82,77,744 6,65,22,013

Cash and Bank Balances I 14,24,972 10,50,047

Loans and Advances and Other Current Assets J 5,35,35,329 3,64,00,720

26,12,75,237 20,33,21,378

Less


Current Liabilities K 3,44,00,253 2,26,32,736

Provisions L 5,28,48,352 4,17,85,940

8,72,48,605 6,44,18,676

Net Current Assets 17,40,26,632 13,89,02,702

Total 24,91,53,851 22,64,58,708

Notes S


The Schedules referred to above form an integral part of Profit and Loss AccountAs per our report of even dateFor Krishan Somani & AssociatesChartered Accountants




(Amount in Rupees)

Schedules 31.03.2009 31.03.2008

INCOME

Sales (Gross) M 28,92,70,494 20,41,14,416

Less : Excise Duty 2,93,45,183 2,50,21,303

25,99,25,311 17,90,93,113

Other Income N 19,38,907 32,13,065

Increase / (Decrease) in Stock O 2,57,26,271 (35,71,277)

28,75,90,489 17,87,34,901

EXPENDITURE

Materials P 16,42,84,275 8,51,79,463

Manufacturing and Other Expenses Q 7,00,59,593 5,94,19,814

23,43,43,868 14,45,99,277

Profit before Depreciation, Interest and Tax 5,32,46,621 3,41,35,624

Depreciation 15,824,027 84,10,910

Transferred from Revaluation Reserve (83,12,970) –

75,11,057 84,10,910

Interest and Finance Expenses R 31,49,791 25,02,550

Profit before Tax 4,25,85,773 2,32,22,164


- Current Tax 1,51,70,000 93,20,000

- Fringe Benefit Tax 1,64,500 1,29,000

- Deferred Tax (7,02,411) (19,71,808)

Profit after Tax 2,79,53,684 1,57,44,972

Add : Balance brought forward from last year 44,88,829 68,32,525

Amount available for Appropriation 3,24,42,513 2,25,77,497

APPROPRIATIONS

General Reserve 2,00,00,000 1,50,00,000

Proposed Dividend on Equity Shares 26,40,000 26,40,000

Tax (including cess) on Proposed Dividend 4,48,668 4,48,668

Balance carried to the Balance Sheet 93,53,845 44,88,829


Notes S



As per our report of even dateFor Krishan Somani & AssociatesChartered Accountants



(Amount in Rupees)

2008-09 2007-08

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 4,25,85,773 2,32,22,164

Adjustments for:

Depreciation 75,11,057 84,10,910

Interest (Net) 31,24,805 14,33,911

Fixed Assets written back / loss on sale of Fixed Assets 33,843 10,46,717

Profit on Sale of Fixed Assets / Investment – (36,442)

Operating Profit before working capital changes 5,32,55,478 3,40,77,260

Adjustments for:

Loans and Advances (1,71,34,609) 5,67,56,780

Trade receivables (1,17,55,731) (5,84,11,103)

Inventories (2,86,88,594) (1,27,63,187)

Trade and other payables 2,28,29,929 79,47,827

Cash generated from operations 1,85,06,473 2,76,07,577

Direct Taxes paid (1,53,34,500) (94,49,000)

Net Cash from Operating activities 31,71,973 1,81,58,577

B. CASH FLOW FROM INVESTING ACTIVITIES

Addition in Investment (27,269) –

Purchase of Fixed Assets (31,33,940) (50,36,625)

Sale of Fixed Assets 10,000 8,70,000

Interest received 24,986 10,68,639

Net Cash used in Investing Activities (31,26,223) (30,97,986)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds / (Repayment) from Long term borrowings (Net) 65,67,634 (85,84,217)

Dividend Paid (26,40,000) (26,40,000)

Corporate Dividend Tax (4,48,668) (4,48,668)

Interest paid (31,49,791) (25,02,550)

Net Cash from Financing Activities 3,29,175 (1,41,75,435)

Net Changes In Cash And Cash Equivalents 3,74,925 8,85,156

Cash And Cash Equivalents – Opening Balance 10,50,047 1,64,891

Cash And Cash Equivalents – Closing Balance 14,24,972 10,50,047

(represents Cash in hand and Bank balances)


31.03.2009 31.03.2008

Authorised40000 Equity Shares of Rs 100/- each (Previous Year 40000 Shares of Rs 100/-each) 40,00,000 40,00,000

40,00,000 40,00,000Issued, Subscribed and Paid-up26400 Equity Shares of Rs 100/- each fully paidup and held by the holding Company, Hindusthan 26,40,000 26,40,000

National Glass & Industries Limited and its nominees, (of the above, 1500 Equity Shares of Rs 100/- each have been issued for consideration other than cash).

26,40,000 26,40,000


(Amount in Rupees)

General ReserveAs per last Balance Sheet 13,50,00,000Add : Transferred from Profit & Loss Account 2,00,00,000 15,50,00,000 13,50,00,000Revaluation ReserveAs per last Balance Sheet 4,99,95,753Add: Adjustment during the Year 2,77,874Less : Depreciation on Revalued Assets 83,12,970 4,19,60,657 4,99,95,753Share PremiumAs per last Balance Sheet 26,40,000 26,40,000Profit and Loss AccountSurplus as per Profit and Loss Account 93,53,845 44,88,829

20,89,54,502 19,21,24,582



Working Capital Loans From Banks- Cash Credits : Secured by hypothecation of stock of finished goods, semi-finished goods, raw 2,80,41,971 2,14,74,337materials, stores and spares including packing material, book debts, other current assets, entire plant & machinery and other fixed assets and guaranteed by the holding Company.

2,80,41,971 2,14,74,337


From a Corporate Associate 65,00,000 65,00,00065,00,000 65,00,000



Particulars Book value at Additions Revaluation Deductions/ Book value at Up to For the Dep. on Deductions/ Upto As at As at

01.04.2008 Adjustment Adjustment 31.03.2009 31.03.2008 Year Revalued Adjustment 31.03.2009 31.03.2009 31.03.2008

Assets

A. TANGIBLE

Plant & Machinery 19,52,77,461 21,09,219 2,77,874 1,15,000 19,75,49,554 11,39,14,198 62,84,628 8,312,970 71,157 12,84,40,639 6,91,08,915 8,13,63,263

Office & Other

Equipment 4,93,781 11,247 – – 5,05,028 2,37,323 17,250 – – 2,54,573 2,50,455 2,56,458

Furniture & Fittings 11,25,534 1,98,168 – – 13,23,702 4,19,137 60,564 – – 4,79,701 8,44,001 7,06,397

Vehicles 19,79,651 – – – 19,79,651 6,59,061 1,95,993 – – 8,55,054 11,24,597 13,20,590

B. INTANGIBLE

Computer Software 40,78,865 8,15,306 – – 48,94,171 12,16,567 7,78,831 – – 19,95,398 28,98,773 28,62,298

Technical Know How 1,40,000 – 1,40,000 1,33,000 – – – 1,33,000 7,000 7,000

Licences Fee – 10,40,000 – – 10,40,000 – 1,73,791 – – 1,73,791 8,66,209 –

Total 20,30,95,292 41,73,940 2,77,874 1,15,000 20,74,32,106 11,65,79,286 75,11,057 83,12,970 71,157 13,23,32,156 7,50,99,950 8,65,16,006

Previous Year 15,33,02,720 39,96,625 4,99,95,753 41,99,806 20,30,95,292 11,04,87,907 84,10,910 – 23,19,531 11,65,79,286 8,65,16,006



Face Value (Rs.) Nos. 31.03.2009 31.03.2008

(Unquoted - in fully paidup shares) - other than TradeHNG International Limited Rs 10/- 134 27,269 –Total 27,269 –


(Amount in Rupees)


(As valued and certified by the Management)Raw Materials & Components 7,15,97,265 6,83,96,161Stores & Spares 27,35,515 29,74,296Stock-in-Process 3,22,94,978 1,36,61,072Finished Goods 2,14,09,434 1,43,17,069

12,80,37,192 9,93,48,598


For Taxation 4,67,41,000 3,15,71,000For Gratuity and Unavailed Leave 24,68,454 67,40,542For Fringe Benefit Tax 5,50,230 3,85,730For Proposed Dividend 26,40,000 26,40,000For Tax on Proposed Dividend 4,48,668 4,48,668

5,28,48,352 4,17,85,940



Considered good – 64,611– 64,611

Other Debts 7,82,77,744 6,64,57,4027,82,77,744 6,65,22,013


Sundry CreditorsOthers 2,52,92,873 1,41,00,095Other Liabilities 91,07,380 85,32,641

3,44,00,253 2,26,32,736


Cash Balance on hand 54,980 59,095Balance in Post Office Saving Bank Account (Pass Book with Central Excise) 1,000 1,000Balances With Scheduled Banks

in Current Accounts 6,83,992 9,29,952in Fixed Deposit Accounts 6,85,000 60,000

14,24,972 10,50,047


(Unsecured, considered good)Advances recoverable in cash or in kind or for value to be received 13,06,620 23,30,935Advance Income Tax 4,97,89,676 3,20,49,678Tax Deducted at Source 60,535 3,36,627Advance Fringe Benefit Tax 5,59,046 4,08,271Deposits and balances with Government Authorities and Other Departments 7,66,790 7,66,790Other Deposits 10,47,568 5,08,419

5,35,30,235 3,64,00,720Other Current AssetsInterest Receivable 5,094 –

5,35,35,329 3,64,00,720



31.03.2009 31.03.2008

Finished Goods (IS Machine & Spares) 27,38,26,280 18,23,04,045Others (Commercial Sales) 1,31,35,358 1,75,32,526Service Revenue (Tax deducted at source Rs 58,486, Previous Year Rs 1,08,632) 23,08,856 42,77,845

28,92,70,494 20,41,14,416Less: Excise Duty 2,93,45,183 2,50,21,303

25,99,25,311 17,90,93,113


(Amount in Rupees)


Interest on Deposits, etc. (Tax deducted at Source Rs 2,049, previous year Rs 2,27,995) 24,986 10,68,639Miscellaneous Receipts 18,67,677 16,58,968Liabilities no longer required written back 18,923 1,46,478Provisions in value of diminution on investments / leave written off 27,321 3,02,538Profit on sale / discard of fixed assets – 36,442

19,38,907 32,13,065


Stores and Spare Parts Consumed 2,00,05,066 1,40,63,376Power and Fuel 12,91,206 12,64,333Salaries, Wages and Bonus 3,10,44,752 2,42,24,539Contribution to Provident and other Funds 22,21,577 18,24,991Workmen and Staff Welfare Expenses 26,59,531 18,77,255Hire Charges 16,00,000 16,00,000Rates and Taxes 83,328 1,01,973Repair and Maintenance :

Plant and Machinery 7,63,537 5,15,306Others 1,11,040 1,19,821

Insurance 1,27,930 2,77,410Excise Duty on Stock 2,86,220 (80,361)Directors' Remuneration 30,76,638 32,43,835Loss on sale / discard of fixed assets 33,843 10,46,717Miscellaneous Expenses 67,54,925 93,40,619

7,00,59,593 5,94,19,814


Closing StockFinished Goods 2,14,09,434 1,43,17,069Work-in-Process 3,22,94,978 1,36,61,072

5,37,04,412 2,79,78,141Less :Opening Stock :Finished Goods 1,43,17,069 1,64,02,021Work-in-Process 1,36,61,072 1,51,47,397

2,79,78,141 3,15,49,418Increase / (Decrease) 2,57,26,271 (35,71,277)


Raw Materials Consumed 14,08,99,169 6,72,36,653Purchase of Trading Material 2,33,85,106 1,79,42,810

16,42,84,275 8,51,79,463


Bank 24,61,852 17,87,552Others 6,87,939 7,14,998

31,49,791 25,02,550



NOTES1. Statement on Accounting Polices

I) Accounting ConventionThe Company prepares its accounts under the historical cost convention, except for certain fixed assets which are revalued onaccrual basis, except otherwise stated in accordance with normally accepted accounting principles and applicable AccountingStandards in India.

II) Fixed Assets Fixed Assets are shown at cost of acquisition (net of CENVAT credit w.e.f. April 1, 1996) or cost of construction or at revaluedamount where such assets have been revalued less depreciation.

All expenses including interest on funds borrowed specifically for the acquisition, construction and Commissioning of new assets /projects are capitalised up to the date of putting the assets to use.

Expenditure related to and incurred during implementation of new / expansion or modernisation project is included under capitalwork in process.

III) Impairment Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assets eitherbelonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater ofassets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets arediscounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverableamount and such loss either no longer exists or has decreased. Impairment loss / reversal thereof is adjusted to the carrying valueof the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.

IV) DepreciationTangible Assetsi) Depreciation on tangible assets is provided on Straight Line Method (SLM) at the rates and in the manner prescribed in Schedule

XIV to the Companies Act, 1956.

ii) Depreciation on increase in value of fixed assets due to revaluation is provided on the basis of remaining useful life on StraightLine Method (SLM) and is transferred from Revaluation Reserve to Profit and Loss Account.

Intangible Assetsi) Intangible Assets :- 95% value of the Computer Software, Technical Knowhow and License Fee is amortised. Computer Software

is amortised on SLM @ 16.21% per year. License Fee is amortised on SLM over a period of three years.

V) InvestmentsLong Term Investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary in thevalue. Current Investments are valued at cost or fair value which ever is lower.

VI) InventoriesFinished Goods and Work-in-process are valued at lower of cost or net realisable value. Cost for own Manufactured goods compriseof materials, labour and other appropriate overheads and is calculated on the basis which is appropriate to the business carried onby the Company.

Raw materials, components, stores and spares are valued at lower of cost or net realisable value. Cost of inventory is arrived at onWeighted Average Method and include the taxes and duties other than those recoverable from taxing authorities and other expensesincurred for procuring the same.

Scrap and unserviceable and obsolete stocks are valued at estimated realisable value.

Excise duty is considered as an element of cost.

VII) Foreign Currency TransactionsTransactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currencymonetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon and also on theexchange differences on settlement of the foreign currency transaction during the year are recognised as income or expenses andare adjusted to the Profit and Loss Account.

VIII) Revenue Recognitiona) All expenses and incomes are accounted on mercantile basis except otherwise stated.

Schedules forming part of the AccountsSchedule – S NOTES


b) Revenue from sale of goods and services is recognised upon passage of title and rendering of services to the customers whichgenerally coincides with delivery.

c) Insurance and other claims to the extent considered recoverable are accounted for in the year of claim. However, claims andrefunds whose recovery can not be ascertained with reasonable certainty are accounted for on acceptance / actual receipt basis.

d) Sales are inclusive of Excise Duty less Return / Shortage / Rebates, if any and net of VAT.

IX) Employee Benefits (see note – 8)Liabilities in respect of employee benefits are provided for as follows :-

A) Deferred Benefit PlansLeave salary of employees on the basis of actuarial valuation by adopting Projected Unit Credit Method as at the year end.

Gratuity Liability is provided for as per actuarial valuation by adopting Projected Unit Credit Method at the year end. This schemeis maintained and administered by an Insurer to which the trustees make periodic contributions.

B) Deferred Contribution PlansProvident Fund and ESI on the basis of actual liability accrued and paid to trust/authority.

C) Actuarial gain / losses, if any, are immediately recognised in the profit and loss account.

X) Borrowing CostsBorrowing cost that are attributable to the acquisition / construction of fixed assets are capitalised as part of the cost of respectiveassets. Other borrowing costs are recognised as an expense in the year in which they are incurred.

XI) Earning per Share (EPS)The earnings considered in ascertaining the Company’s EPS comprises the net profit after tax (and includes the post tax effect ofany extra ordinary items). The number of shares used in computing basic EPS is weighted average number of shares outstandingduring the year.

XII) TaxationTax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the year.

A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provisionis made for deferred tax for all timing differences arising between taxable income and accounting income at currently enacted taxrates.

Deferred tax assets are recognised only if there is virtual certainty that they will be realised and are reviewed for the appropriatenessof their respective carrying values at each balance sheet date.

XIII) Provision, Contingent Liabilities and Contingent AssetsProvisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a resultof past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosedin the financial statements. Contingent Liabilities, if material are disclosed by way of notes.

Schedules forming part of the AccountsSchedule – S NOTES (Contd.)

2008-09 2007-08

2. Contingent liabilities not provided fora) Income Tax demand against which Company has preferred an appeal 5,87,260 5,87,260b) Surety given to sales tax department on behalf of :

- Holding Company, Hindusthan National Glass & Industries Limited 50,00,000 50,00,000c) Bonds executed in favour of Central Excise Department 1,000 1,000d) Pending Capital Orders 1,36,358 9,49,296

- Advance Given – 6,05,354e) Corporate Guarantee given on behalf of Somany Foam Limited 32,35,00,000 32,35,00,000

(Amount in Rupees)

2008-09 2007-08

3. Sundry Debtors include :- Due from holding Company, Hindusthan National Glass & Industries Limited 7,79,07,922 6,58,57,690

(Maximum balance: Rs 8,16,19,797)



2008-09 2007-08

a) Provision for Bonus 32,52,426 26,12,844b) Gratuity paid 10,93,842 14,57,565

4. Salaries, Wages, Bonus include : (Amount in Rupees)

2008-09 2007-08

a) Directors’ Travelling Expenses 1,62,200 1,54,089b) Professional Fees 35,49,484 63,36,988c) Charity & Donation 5,00,000 –d) Payment to statutory Auditors :

- Audit Fees 31,000 31,000- Tax Audit Fees 10,000 10,000- Certification Work 2,000 –- Reimbursement of Expenses 15,655 2,280

5. Miscellaneous Expenses include :

2008-09 2007-08

i) Salary 17,25,000 17,25,000ii) HRA 10,35,000 10,35,000iii) Contribution to Provident Fund & other Funds 2,07,000 2,07,000iv) Provision for Gratuity 71,875 1,28,125v) Medical Expenses Reimbursement – 1,35,629vi) LTA 22,163 11,881vii) Directors’ Fee 15,600 1,200

30,76,638 32,43,835

6. a) Directors’ Remuneration include :

2008-09 2007-08

Net Profit as per Profit & Loss Account 4,25,85,773 2,32,22,164Add: Depreciation 75,11,057 84,10,910

Directors’ Remuneration 30,76,638 32,43,8355,31,73,468 3,48,76,909

Less: Depreciation under Section 350 of the Companies Act, 1956 75,11,057 84,10,9104,56,62,411 2,64,65,999

b) Computation of Net Profit under Section 198 read with Section 349 of the Companies Act, 1956 and commission payableto Directors :

7. As per Accounting Standard 15 “Employee Benefits”, the disclosures of employee benefits as defined in the Accounting Standard aregiven below :

i) The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards)Rules, 2006, are given below :

Defined Contribution SchemeContribution to Defined Contribution Plan, recognised for the year are as under :

The guidance on implementing Accounting Standard (AS-15) (Revised 2005) on Employees Benefits issued by Accounting StandardBoard (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be made by the employerneeds to be treated as “Defined Benefit Plan”. According to the Management, in consultation to the actuary it is not practical or feasibleto actuarially value the provident liability in the absence of any guidance from Actuarial Society of India and also due to the fact thatthe rate of interest as notified by the Government can vary annually. Accordingly, the Company is currently not in a position to provideother related disclosure as required by the aforesaid AS-15 read with ASB guidance. However, with regard to the position of the fundand confirmation to the trustees of such fund, there is no shortfall as at year end.

Employer’s Contribution to Provident Fund 11.98Employer’s Contribution to Pension Fund 9.65

(Rs in lacs)



Defined Benefit PlanThe Employee’s gratuity fund scheme managed by Birla Sun Life Insurance is a defined benefit plan. The present value of obligation isdetermined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving riseto additional unit of employee benefit entitlement and measures unit separately to build up the final obligation. The obligation for leaveencashment is recognised in the same manner as gratuity.

I) Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances thereofare as follows :

II) Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows :

III) Expense recognised in the Income statement (Under the head “Salaries, Wages, Gratuity & Bonus” – Refer Schedule – Q.

Gratuity Leave EncashmentFunded Unfunded

Liability at beginning of the year 90.78 5.46Current Service Cost 6.61 1.43Interest Cost 6.53 0.32Actuarial (Gain) / Loss (6.72) 1.10Benefits Paid 7.33 2.30Liability at the end of the year 89.87 6.02

(Rs in lacs)


Current Service Cost 6.61 1.43Interest Cost 6.53 0.32Expected Return on Plan Assets 7.01 –Net Actuarial (Gain) / Loss to be recognised 12.28 1.10Expenses recognised in Profit and Loss Account 18.42 2.86

IV) Balance Sheet reconciliation

V) Compensated Absences The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the Company asat March 31, 2009 is Rs 6.02 lacs.


Opening Net Liability 3.21 5.46Expenses as above 18.42 2.86Employers contribution 5.05 2.30Amount Recognised in Balance Sheet 16.59 6.02

Gratuity(Funded)




VI) Principal Actuarial assumptions at the Balance Sheet

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and otherrelevant factors including supply and demand in the employment market. The above information is certified by the actuary.



9. Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status ofthe suppliers as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” (the Act). There are no delays inpayment made to such suppliers. There is no overdue amount outstanding as at the balance sheet date.

10. Stores and Spares consumption includes partly for repairs and replacement less directly capitalised.

11. Profit and / or Loss on sales of raw materials and stores remains adjusted in consumption.

12. Earning Per Share


Mortality Table LICI 1994-1996 LICI 1994-1996Discount Rate (per annum) 7.50% 7.50%Expected rate of return on plan assets (per annum) 8.00% –Rate of escalation in salary (per annum) 5.00% 5.00%

As on 31.03.2009 As on 31.03.2008

8. a) Plant and Machinery were revalued by an approved valuer, on March 31, 2008 by using 4,19,60,656 4,99,95,753residual replacement value method. Accordingly, net amount transferred to Revaluation Reserve Account.

b) Depreciation transferred from Revaluation Reserve Account to Profit & Loss Account. 83,12,970 –

(Amount in Rupees)

As on 31.03.2009 As on 31.03.2008

Net Profit attributable to Shareholders 2,79,53,684 1,57,44,972Weighted average number of equity shares 26,400 26,400Basic earning per share of Rs 100/- each 1059 596

The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and diluted earning per shareof the Company are same.

13. Deferred Tax :Break up of Deferred Tax Assets and Deferred Tax Liabilities is as given below :

14. The Company’s exclusive business is manufacturing and selling of I.S. Glass Forming Machines and its Spares & Accessories and as suchin the opinion of the management this is the only reportable segment, as per Accounting Standard – 17 on Segment Reporting, issuedby the “The Institute of Chartered Accountants of India”.


Deferred Tax AssetsExpenses charged in the financial statement but allowable as deduction 31,53,457 (3,94,845) 27,58,612in future years under Income Tax Act.Expenditure allowable on payment basis. 4,30,200 (1,658) 4,28,542Total Deferred Tax Assets 35,83,657 (3,96,503) 31,87,154Deferred Tax Liabilities Depreciation and related items 73,03,446 (10,98,914) 62,04,532Total Deferred Tax Liabilities 73,03,446 (10,98,914) 62,04,532Net Deferred Tax Liabilities 37,19,789 (7,02,411) 30,17,378

(Amount in Rupees)



15. Information pursuant to paragraphs 3 & 4 of Part II of Schedule VI of the Companies Act, 1956.A) Capacity & Actual Production :

a) Company has been further permitted to manufacture Filter Presses and Ball Mills (Ceramic Machinery) worth Rs 30 Lacs per annumwithin its total licenced capacity of 10 Glass Manufacturing Machine and 15 Feeders and Spares and Accessories.

b) The Industrial Licence covers manufacturing of accessories and spares. Since capacity thereof has not been specified in the industriallicence, information of installed capacity and actual production are not given.

* As Certified by the management

* Includes cost of spares and accessories Rs 8,30,00,268 (Previous year Rs 3,62,42,145) taken for departmental use.

** Includes finished stock of spares and accessories Rs 2,14,09,434 (Previous year Rs 1,43,17,069).

*** Sales are inclusive of Excise Duty

Class of Goods Units (a) *Licenced Installed ActualCapacity Capacity Production

Glass Manufacturing Machine Nos 10 7 –(10) (7) (–)

Feeder, Accessories & Spares (b) Nos 15 7 –(15) (7) (–)

Glass Ceramic Decorating Machines, Accessories & Spare Parts Nos 12 12 –(12) (12) (–)

Fully Automatic Tile Press Nos 10 10 –(10) (10) (–)

Tile Loading Equipment Nos 10 10 –(10) (10) (–)

Tile Sorting & Packing Equipment Nos 15 15 –(15) (15) (–)

I.S. Machine Conversion Nos 10 10 5(10) (10) (3)

Bottle Inspection & Packing Machine Nos 10 10 –(10) (10) (–)

Conveyor, Single Liners, Ware Transfer, Accessories & Spares Nos 10 10 12(10) (10) (7)

Annealing / Decorating Lehr Nos 5 5 –(5) (5) (–)

Motor Driven Press & Fire Finishing Machine Nos 5 5 –(5) (5) (–)

B) Purchases, Stocks and Sales :

Opening Stock Purchase Closing Stock Sales ***

Class of Goods Unit Qty. Value Qty. Value Qty. Value Qty. Value

Feeder, Accessories & Spares Nos – – – – – – – –

(–) (–) (–) (–) (–) (–) (–)

I.S. Machine / Conversion Nos – – – – – – 5 5,01,80,409

(–) (–) (–) (–) (–) (–) (3) (4,47,64,564)

Conveyor, Single Liners, Ware Nos – – – – – – 12 2,58,02,046

Transfer, Accessories & Spares (–) (–) (–) (–) (–) (–) (7) (83,72,285)

Spares & Accessories Nos – * 6,43,45,924 – * 11,02,52,582 – ** 7,57,74,389 – 21,09,79,183

(–) (5,19,76,432) (–) (6,84,66,579) (–) (6,43,45,924) (–) (14,66,99,722)

Service Revenue – – – – – – – 23,08,856

(–) (–) (–) (–) (–) (–) (–) (42,77,845)

Others – – – – – – – 3,08,573

(–) (–) (–) (–) (–) (–) (–) (5,54,038)

(Amount in Rupees)



C) Raw Material & Components consumed :

Note: Consumption is including of Sales Rs 2,29,16,983 (Previous year Rs 1,78,04,752).

Items Unit Quantity Rupees

Castings Pcs 47,301 1,36,26,116(23,455) (73,38,720)

Steels M.Ton 359 2,64,33,812(111) (1,05,81,190)

Accessories & Components – – 10,59,16,481(5,40,11,062)

D) Value of Raw Materials, Components & Spare Parts consumed (Including Sales) (As certified by the Management)

H) Figures in brackets represent previous year figures.

J) Related Party Disclosure :-Related Party disclosure as identified by the management in accordance with the Accounting Standard 18 issued by the Institute ofChartered Accountants of India (“ICAI”) and effective from April 1, 2001.

a) Name of the related parties where control exists – Holding Company• Hindusthan National Glass & Industries Limited

b) Other related parties and nature of relationship with whom the Company had transactions• Fellow Subsidiary :-

- Quality Minerals Limited

• Entities over which Directors and their relatives have influence- HNG International Limited- Somany Foam Limited

• Directors and Relatives- Mr C.K. Somany – Chairman

2008-09 2007-08

Raw Materials & Spare Parts Raw Materials & Spare PartsComponents ComponentsRupees % Rupees % Rupees % Rupees %

Imported 1,05,35,248 7 – – 1,28,54,341 18 – –Indigenous 13,54,41,161 93 1,08,92,126 100 5,90,76,630 82 72,56,211 100Total 14,59,76,409 100 1,08,92,126 100 7,19,30,971 100 72,56,211 100

2008-09 2007-08

E) CIF Value of Imports- Spares / Components 6,21,823 2,05,08,532

F) Expenditure in Foreign Currency- Travelling 48,975 8,270- Bank Charges 1,744 –

G) FOB Value of Export 16,88,537 14,27,639

(Amount in Rupees)



Disclosure of Transactions between The Group & Related parties and status of outstanding balances as on March 31, 2009.i) Current Year

Holding Fellow Associates Entities over Directors and

Company Subsidiary which Directors their relatives

and their

relatives have

influence

Income

Sales 2941.94 – – – –

Services Given 25.91 – – – –

Expenses

Purchases 41.33 – – – –

Hire Charges Paid 16.00 – – – –

Remuneration Given – – – – 30.61

Sitting Fees Paid – – – – 0.16

Interest Paid – 6.83 – – –

Dividend Paid 26.40 – – – –

Services Taken – – – – –

Borrowings – 65.00 – – –

Investments – – – 0.27 –

Guarantee/Corporate Guarantee :-

- Given 50.00 – – 3235.00 –

Outstandings :-

- Receivables 779.08 – – – –

- Dividend Payable 26.40 – – – –

(Rs in lacs)



ii) Previous Year

Holding Fellow Associates Entities over Directors and

Company Subsidiary which Directors their relatives

and their

relatives have

influence

Income

Sales 1616.42 – 442.74 – –

Services Given 4.85 – 43.21 – –

Interest Received – – – 9.98 –

Expenses

Purchases 8.90 – – – –

Hire Charges Paid 16.00 – – – –

Remuneration Given – – – – 32.43

Sitting Fees Paid – – – – 0.01

Interest Paid – 6.83 – – –

Dividend Paid 0.26 – – – –

Services Taken – – 0.03 – –

Borrowings – 65.00 – – –

Investments – – – 4.73 –

Guarantee/Corporate Guarantee :-

- Given 50.00 – – 3235.00 –

- Taken 381.00 – – – –

Outstandings :-

- Receivables 658.58 – – – –

- Dividend Payable 26.40 – – – –

(Rs in lacs)

16. Previous year figures have been re-grouped or re-arranged where ever considered necessary.

17. Schedule A to S form an integral part of Balance Sheet and Profit & Loss Account.

Signature to Schedule A to SAs per our report of even dateFor Krishan Somani & AssociatesChartered Accountants




As per our report of even dateFor Krishan Somani & AssociatesChartered Accountants

Krishan Somani Bharat Somany C.K. SomanyProprietor Director Chairman417, Laxmi Tower, Commercial Complex,Azadpur, Delhi - 110033May 23, 2009

Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956

Balance Sheet Abstract and the Company’s General Business Profile

Balance Sheet Abstract

0 6 5 5 9 5

3 1 0 3


Balance Sheet Date


II. Capital Raised during the year (Amount in Rs Thousands)

2 0 0 9

2 1

Item Code No. (ITC code) Product Descriptions


Public Issue

8 4 7 5 1 0 0 0 G L A S S F O R M I N G M A C H I N E


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


N . A . O V E R H A U L I N G & S E R V I C E S

N I L

Right Issue

N I L

Bonus Issue

N I L

Private Placement

N I L

III. Position of Mobilisation and Deployment of Funds (Amount in Rs Thousands)Total Liabilities

3 3 6 4 0 2

Total Assets

3 3 6 4 0 2

IV. Performance of Company (Amount in Rs Thousands)Net Income

2 8 7 5 6 3

Total Expenditure

2 4 4 9 7 7

+ – Profit/Loss before Tax

(Please tick Appropriate box + for Profit, – for Loss)

√ 4 2 5 8 6

+ – Profit/Loss after Tax

√ 2 7 9 5 4

Earning per Share in Rs

1 0 5 9

Dividend (%)

1 0 0

Sources of FundsPaid-Up Capital

2 6 4 0


2 0 8 9 5 5

Secured Loans

2 8 0 4 2

Unsecured Loans

6 5 0 0

Deferred Tax Liability

3 0 1 7

Application of FundsNet Fixed Assets

7 5 1 0 0

Investments

2 7

Net Current Assets

1 7 4 0 2 7

Misc. Expenditure

N I L

Accumulated Losses

N I L

102 | Quality Minerals Limited

Directors’ Report

To the Shareholders of QUALITY MINERALS LTD.

Your Directors have pleasure in presenting the Thirty Fifth AnnualReport together with Audited Accounts for the year ended March31, 2009.

Financial Highlights (Amount in Rupees)

Year ended Year ended31.03.2009 31.03.2008

Gross Sales 2,62,65,959 2,37,05,689Profit before Interest, Depreciation & Tax 30,90,882 17,27,358Depreciation 18,145 20,151Profit Before Tax 30,72,737 17,07,207Provision for Current Tax 9,55,400 580856Provision for Fringe Benefit Tax 2722 558Provision for Deferred Tax 2,861 2,488Provision for Income Tax for earlier years 10,110 70,757Profit After Tax 21,04,094 10,52,548Balance brought forward from previous year 1,23,12,820 1,12,60,272Balance carried forward to next year 1,44,16,914 1,23,12,820

Working ReviewThe Company is solely in the business of supply of Feldspar Powder. TheFeldspar Lumps purchased from mines are grinded through job workersand the powder so produced is supplied. The sales of the Company washigher at Rs 262.66 Lacs as against Rs 237.06 Lacs in the previous year.Your Directors are optimistic about current year’s performance.

DividendThe Directors do not recommend any dividend for the year and theentire profit is to be carried forward.

Fixed DepositThe Company has not accepted any deposits from the public withinthe meaning of Section 58A of the Companies Act, 1956 and assuch no amount of principal or interest was outstanding as of theBalance Sheet date.

DirectorsShri D.D. Taparia retires by rotation from the Board of Directors ofthe Company at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment.

Auditors’ ReportThe Notes on Accounts, as referred to in the Auditors’ Report areself-explanatory and therefore, do not call any further comments.

AuditorsThe Auditors M/s J.M.Vyas & Company, Chartered Accountants, Jaipur,retire at the ensuing Annual General Meeting and being eligible, offerthemselves for re-appointment.

Particulars of EmployeesThere are no employees covered under section 217(2A) of the

Companies Act, 1956, read with Companies (Particulars ofEmployees) Rules, 1975.

Conservation of Energy & Technology Absorption & ForeignExchange Earnings & Outgo.A) Conservation of Energy

Our Operations are not energy intensive. The Company has nodirect consumption of Power and Fuel.

B) Technology AbsorptionNot Applicable

C) Foreign Exchange Earnings & OutgoThe Company has neither any Foreign Exchange earning noroutgo.

Directors’ Responsibility Statement Pursuant to Section 217(2AA) of the Companies Act, 1956.

Your Directors hereby confirm :- That in the preparation of annual accounts, the applicable

accounting standards have been followed along with properexplanation relating to material departures.

- That the Directors had selected such accounting policies andapplied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial yearended on March 31, 2009 and of the profit of the Company forthe year ended March 31, 2009.

- That the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and otherirregularities.

- That the Directors had prepared the Annual Accounts on a goingconcern basis.

AcknowledgementYour Directors place on record their grateful appreciation for thecontinued support , assistance and co-operation received fromCentral & State Governments, Banks, Suppliers, Customers andBusiness Associates.

Your Directors aslo wish to place on record their deep sense ofappreciation for the committed services by your Company’semployees.

Registered Office On behalf of the Board of DirectorsW-27, Greater Kailash II,New Delhi – 110048.

Delhi (Amita Somany) (D.D. Taparia)June 1, 2009 Managing Director Director

Quality Minerals Limited | 103

Auditors’ Report

The Members,QUALITY MINERALS LIMITED

1. We have audited the attached Balance Sheet of M/s QUALITY

MINERALS LIMITED as at March 31, 2009 and Profit & Loss

Account and the Cash Flow Statement for the year ended on

that date. These financial statements are the responsibility of

the Company’s management. Our responsibility is to express an

opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with accounting

standards generally accepted in India. Those standards require

that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of

material misstatement. An audit includes examining, on test

basis, evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by

the management, as well as evaluating the overall financial

statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. As required by the Companies (Auditors’ Report) Order, 2003

issued by the Central Government in terms of Section 227 (4A)

of the Companies Act, 1956 we annex hereto a statement on

the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we

report that:

a) We have obtained all the information and explanations


necessary for the purpose of our audit

b) In our opinion proper books of account as required by law

have been maintained by the Company so far as appears

from our examination of such books.

c) The Balance Sheet and Profit & Loss Account dealt with by

this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, the Profit & Loss Account

dealt with by this report comply with the Accounting

Standards referred to in sub-section (3C) of Section 211 of

the Companies Act, 1956 to the extent possible.

e) On the basis of written representations received from the

Directors as on March 31, 2009 and taken on record by the

Board of Directors, we report that none of the Directors is

disqualified as on March 31, 2009 from being appointed as

a Director in terms of clause(g) of sub-section (i) of Section

274 of the Companies Act, 1956.

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

according to the explanations given to us the said accounts

give the information required by the Companies Act, 1956

in the manner so required and read with ‘Notes On

Accounts’ (Schedule P) give a true and fair view in

conformity with the accounting principles generally

accepted in India.

g) There is no amount of Cess payable under section 441A of

the Companies Act, 1956.

i) in the case of the Balance Sheet, of the state of affairs

of the Company as at March 31, 2009; and

ii) in the case of the Profit & Loss Account of the Company

of the PROFIT for the year ended on that date; and

ii) in the case of the Cash Flow Statement, of the cash

flows for the year ended on that date.

For and on behalf of

J.M. Vyas & Co.


Jaipur J. M. Vyas

June 1, 2009 Partner


Statement of matters specified by the Companies (Auditors Report ) Order 2003 relating to thefinancial year ended March 31, 2009

i) a) The Company has maintained proper records showing fullparticulars, including quantitative details and situation offixed assets.

b) The fixed assets have been physically verified by themanagement during the year. In our opinion, thefrequency of verification is reasonable having regard to thesize of the Company and the nature of its assets. Thediscrepancies reported on such verification were notmaterial and have been properly dealt with in the books ofaccount.

c) None of the fixed assets have been sold during the year.

ii) a) The management has conducted physical verification ofinventory at reasonable intervals.

b) In our opinion, the procedures followed by themanagement for such physical verification are reasonableand adequate in relation to size of the Company andnature of its business.

c) The Company is maintaining proper records of inventory.The discrepancies noticed on verification between physicalinventories and the book records were not material inrelation to the operation of the Company and the samehave been properly dealt with in the books of account.

iii) a) The Company has not granted any loans, secured orunsecured to companies, firms or other parties covered inthe register maintained under Section 301 of theCompanies Act, 1956 except one party. The maximumbalance outstanding during the year was Rs 65,00,000/-(previous year Rs 65,00,000/-) and the amount wasrepayable on demand.

b) In our opinion, the rate of interest and other terms andconditions of the loan granted by the Company, are primafacie not prejudicial to the interest of the Company.

c) The receipt of interest and principal amount was regular.

d) There are no overdue amounts of more than rupees onelac.

e) The Company has not taken any loans, secured orunsecured from companies, firms or other parties coveredin the register maintained under Section 301 of theCompanies Act, 1956.

iv) There are adequate internal control system commensuratewith the size of the Company and the nature of its business forthe purchase of inventory and fixed assets and for the sale ofgoods and services. There is no continuing failure to correctmajor weakness in internal control system.

v) a) Based on the audit procedures applied by us andaccording to the information and explanations providedby the management, we are of the opinion that alltransactions that need to be entered into the register inpursuance of Section 301 of the Companies Act, 1956have been so entered.

b) Based on the information and explanations given to us, itis our opinion that these transactions have been made atreasonable prices having regard to the prevailing marketprices at the relevant time.

vi) In our opinion and according to the information andexplanations given to us, the Company has not accepted anydeposits from the public within the meaning of Section 58Aand 58AA of the Companies Act, 1956 and the rules framedthere under.

vii) The Company has an internal audit system, which in ouropinion commensurate with the size and nature of itsbusiness.

viii) As informed to us, the maintenance of cost records has notbeen prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956, in respect ofthe activities carried on by the Company.

QUALITY MINERALS LIMITED


ix) a) The Company is regular in depositing the statutory duesincluding Provident Fund, Investor Education andProtection Fund, Employees State Insurance, Income tax,Sales tax, Wealth tax, Customs duty, Excise duty and otherstatutory dues with the appropriate authorities.

b) According to the information and explanations given tous, there are no dues of Sales tax, Income tax, CustomsDuty, Wealth tax, Excise duty outstanding on account ofany dispute.

x) The Company has no accumulated losses at the end offinancial year and it has not incurred any cash losses in thecurrent and immediately preceding financial year.

xi) The Company has not defaulted in the repayment of dues toany financial institution, bank or debenture holders.

xii) The Company has not granted any loan and advances on thebasis of security by way of pledge of shares, debentures andother securities.

xiii) The provisions of any special statute applicable to chit are notapplicable in respect of nidhi / mutual benefit fund/societies.

xiv) In our opinion the Company has maintained proper recordsof the transactions and contracts of the investments dealt in bythe Company and timely entries have been made therein. Theinvestments made by the Company held in its own name.

xv) The Company has not given any guarantees for loans taken byothers from banks or financial institutions.

xvi) The Company has not obtained any term loans.

xvii) On the basis of an overall examination of the balance sheetand the information and explanations given to us, we reportthat the Company has not utilised any funds raised on shortterm basis for long term investments and vice-versa.

xviii) The Company has not made any preferential allotment ofshares to the parties or companies covered under Section 301of the Companies Act, 1956, during the year.

xix) The Company has not issued any debentures.

xx) The Company has not raised any money through a public issueduring the year.

xxi) Based upon the audit procedures performed and theinformation and explanations given to us by the management,we report that no fraud on or by the Company has beennoticed or reported during the year.

For and on behalf of

J.M. Vyas & Co.


Jaipur J. M. Vyas

June 1, 2009 Partner



The Schedules referred to above form an integral part of Balance SheetAs per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants

J.M. Vyas D.D. Taparia Amita SomanyPartner Director Managing DirectorJaipurJune 1, 2009

(Amount in Rupees)

Schedules 31.03.2009 31.03.2008

SOURCES OF FUNDS

Shareholders' Funds

Share Capital A 941,000 9,41,000

Reserves and Surplus B 1,44,73,742 1,23,69,648

1,54,14,742 1,33,10,648

Deferred Tax Assets/Liabilities (Net) 34,918 32,057

Total 1,54,49,660 1,33,42,705


Fixed Assets C

Gross Block 5,37,529 5,37,529

Less: Depreciation 3,16,477 2,98,332

Net Block 2,21,052 2,39,197

Investments D 1,20,000 1,20,000


Current Assets

Inventories E 5,28,859 4,34,518

Sundry Debtors F 63,88,923 56,95,224

Cash and Bank Balances G 21,52,374 26,99,759

Loans and Advances and Other Current Assets H 86,08,510 90,67,145

1,76,78,666 1,78,96,646

Less


Current Liabilities I 16,08,141 30,91,725

Provisions J 9,61,917 18,21,413

25,70,058 49,13,138

Net Current Assets 1,51,08,608 1,29,83,508

Total 1,54,49,660 1,33,42,705

Significant Accounting Policies and Notes on Accounts P


The Schedules referred to above form an integral part of Profit and Loss AccountAs per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants



(Amount in Rupees)

Schedules 31.03.2009 31.03.2008

INCOME

Sales (Gross) K 2,62,65,959 2,37,05,689

Less : Excise Duty – –

2,62,65,959 2,37,05,689

Other Income L 7,85,172 7,94,076

Increase / (Decrease) in Stock M 94,341 (27,416)

2,71,45,472 2,44,72,349

EXPENDITURE

Materials N 1,55,31,514 1,54,04,861

Manufacturing and Other Expenses O 85,23,076 73,40,130

2,40,54,590 2,27,44,991

Profit before Depreciation, Interest and Tax 30,90,882 17,27,358


Profit before Tax 30,72,737 17,07,207


- Current Tax 9,55,400 5,80,856

- Fringe Benefit Tax 272 558

- Deferred Tax 2,861 2,488

- Income Tax of Earlier years 10,110 70,757

Profit after Tax 21,04,094 10,52,548

Add : Balance brought forward from last year 1,23,12,820 1,12,60,272

Balance carried to the Balance Sheet 1,44,16,914 1,23,12,820


Significant Accounting Policies and Notes on Accounts P



As per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants


(Amount in Rupees)

2008-09 2007-08

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 3,072,737 1,707,207

Adjustment for :


Interest (Net) (785,172) (793,615)

Operating Profit before working capital changes 2,305,710 933,743

Adjustment for :

Loans and advances 458,635 (709,326)

Trade receivables (693,699) (243,250)

Inventories (94,341) 27,416

Trade and other payables (2,343,080) 1,943,849

Cash generated from operations (366,775) 1,952,432

Direct Taxes paid (965,782) (652,211)

Net Cash from Operating activities (1,332,557) 1,300,221

B. CASH FLOW FROM INVESTING ACTIVITIES

Interest received 785,172 793,615

Net Cash used in Investing Activities 785,172 793,615

C. CASH FLOW FROM FINANCING ACTIVITIES – –

Net Changes In Cash And Cash Equivalents (547,385) 2,093,836

Cash And Cash Equivalents-Opening Balance 2,699,759 605,923

Cash And Cash Equivalents-Closing Balance 2,152,374 2,699,759

(Represents Cash in hand and Bank balances)


31.03.2009 31.03.2008

Authorised10000 Equity Shares of Rs 100/- each (Previous Year 10000 Shares of Rs 100/-each) 10,00,000 10,00,000

10,00,000 10,00,000 Issued, Subscribed and Paid-up

9410 (Previous Year 9410) Equity shares of Rs 100/- each fully paid up 9,41,000 9,41,000 9,41,000 9,41,000


(Amount in Rupees)


Investment Allowance Reserve As per last Balance Sheet 56,828 56,828 Profit and Loss AccountSurplus as per Profit and Loss Account 1,44,16,914 1,23,12,820

1,44,73,742 1,23,69,648



Particulars Book value at Additions Deductions/ Book value at Upto For the Deductions/ Upto As at As at

01.04.2008 Adjustment 31.03.2009 31.03.2008 year Adjustment 31.03.2009 31.03.2009 31.03.2008

Building 3,55,338 – – 3,55,338 1,85,560 8,489 – 1,94,049 1,61,289 1,69,778

Electricity Fittings 9,182 – – 9,182 7,622 217 – 7,839 1,343 1,560

Plant & Machinery 1,73,009 – – 1,73,009 1,05,150 9,439 – 1,14,589 58,420 67,859

Total 5,37,529 – – 5,37,529 2,98,332 18,145 – 3,16,477 2,21,052 2,39,197

Previous Year 5,37,529 – – 5,37,529 2,78,181 20,151 – 2,98,332 2,39,197

Schedule – C FIXED ASSETS

Face Value (Rs.) Nos. 31.03.2009 31.03.2008

Fully Paid-up Equity SharesUnquoted Surendra Khanij (P) Ltd. 10 12000 1,20,000 1,20,000

1,20,000 1,20,000

Schedule – D INVESTMENTS

(As valued and certified by the Management)Feldspar Lumps 5,28,859 4,34,518

5,28,859 4,34,518

Schedule – E INVENTORIES

(Unsecured, considered good unless otherwise stated)Debts due for a period exceeding six months – –Other Debts 63,88,923 56,95,224

63,88,923 56,95,224

Schedule – F SUNDRY DEBTORS


(Unsecured and Considered good)Loans To Bodies Corporate 65,00,000 65,00,000 Advances recoverable in cash or in kind or for value to be received 12,13,909 15,60,632 Advance Income Tax 8,94,601 10,06,513

86,08,510 90,67,145

31.03.2009 31.03.2008

Cash Balance on hand 57,365 1,73,813 Cheques in hand 1,38,218 –Balances With Scheduled Banks

in Current Accounts 9,56,791 10,25,946 in Fixed Deposit Accounts 10,00,000 15,00,000

21,52,374 26,99,759

Schedule – G CASH AND BANK BALANCES

(Amount in Rupees)


Sundry CreditorsDues to Micro, Small & Medium Enterprises – –Others 10,21,164 25,48,295

Other Liabilities 5,86,977 5,43,430 16,08,141 30,91,725

Schedule – I CURRENT LIABILITIES

Miscellaneous Receipts – 461 Interest Received

From Bank (TDS Rs 18,431 Previous year Rs 21,501) 1,02,672 1,11,115From Others (TDS Rs 1,54,655 Previous year Rs 1,54,655) 6,82,500 6,82,500

7,85,172 7,94,076

Schedule – L OTHER INCOME

For Taxation 9,55,400 18,15,227 For Gratuity and Unavailed Leave 6,517 5,628 For Fringe Benefit Tax – 558

9,61,917 18,21,413

Schedule – J PROVISIONS

Feldspar Powder 2,62,65,959 2,37,05,689 2,62,65,959 2,37,05,689

Schedule – K SALES

Schedule – H LOANS AND ADVANCES AND OTHER CURRENT ASSETS



Schedule – P ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

31.03.2009 31.03.2008

Closing StockFeldspar Lumps 5,28,859 4,34,518

5,28,859 4,34,518 Less :Opening StockFeldspar Lumps 4,34,518 4,61,934 Increase / (Decrease) 94,341 (27,416)

Schedule – M INCREASE / (DECREASE) IN STOCK

(Amount in Rupees)

Raw Materials Consumed 1,55,31,514 1,54,04,861 1,55,31,514 1,54,04,861

Schedule – N MATERIALS

Salaries,Wages and Bonus 2,74,793 2,19,759 Miscellaneous Expenses 30,364 22,470 Grinding Charges 78,83,638 67,05,789 Freight Charges – 69,443 Directors Remuneration 3,00,000 3,00,000 Payment to Auditors :-

Audit Fees 9,927 6,742 Other Services 24,354 15,927

85,23,076 73,40,130

Schedule – O MANUFACTURING AND OTHER EXPENSES

A. Significant Accounting Policy1) Basis of Accounting

The Company prepares its accounts under the historical cost convention on accrual basis, except otherwise stated in accordance withnormally accepted accounting principles and applicable Accounting Standards in India.

2) SalesSales are recognised on dispatch of goods by the Company and are reflected in accounts at net realisable value.

3) Fixed Assets & DepreciationFixed Assets are shown at cost less depreciation. Depreciation has been charged at the rates specified in Schedule XIV to theCompanies Act, 1956.

4) Valuation of InventoryRaw material is valued at lower of cost or net realisable value.

5) Earning per ShareThe earnings considered in ascertaining the Company's earning per share comprises of the net profit after tax. The number of sharesused in computing basic earning per share is weighted average number of shares outstanding during the year.


6) Related Party Transactions:The Company is controlled by Hindusthan National Glass & Industries Limited which owns 99.73% of the Company's shares.

The following related party transactions were carried during the year:

7) The Company's exclusive business is dealing in minerals and as such in the opinion of the management this is the only reportablesegment, as per Accounting Standard 17 on Segment Reporting, issued by “The Institute of Chartered Accountants of India”.

8) In view of the applicability of the provisions of Section 43 A (i) of the Companies Act, 1956, the Company has become a deemedpublic Company and Registrar of Companies, Rajasthan, Jaipur has already made necessary endorsement on the Certificate.

Schedules forming part of the AccountsSchedule – P ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)

Name of the Related Party Nature of Nature of 31.03.2009 31.03.2008Relationship Transaction

1. Hindusthan National Glass and Industries Ltd. Holding Company Income:Sales 26,265,959 23,705,689

2. Glass Equipment (India) Ltd. Under common Income:control Interest on loan 682,500 682,500

3. Smt. Amita Somany Managing ExpensesDirector Remuneration 300,000 300,000

B. Notes on Accounts1) Taxation

Tax expenses for the year, comprising current tax and deferred tax is included in determining the net profit for the year. A provisionis made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws.

4) In consonance with Accounting Standard - 22 on "Accounting for Taxes on Income" issued by “The Institute of Chartered Accountantsof India”, during the year the Company has made provisions for deferred tax assets / liabilities.

5) Deferred Tax:

31.03.2009 31.03.2008

2) Sundry Debtors include :- Due from holding Company 63,54,829 55,41,637

3) Amount paid or credited to the Auditors :Audit Fee 6,618 6,742Tax Audit Fee 3,309 –Management Services and Certification work 24,354 15,927Total 34,281 22,669

(Amount in Rupees)

Opening Balance Charge to Profit Closing Balance & Loss Account

Breakup of deferred tax assets/liabilities and reconciliation of current year deferred tax charge:Deferred Tax Liabilities:The impact of difference between carrying amount of fixed assets in the financial statements and income tax return 34,497 (645) 35,142Total (A) 34,497 (645) 35,142Deferred Tax Assets:Provision of leave encashment 2,440 (2,216) 224Total (B) 2,440 (2,216) 224Net Deferred Tax Liability Total (A - B) 32,057 (2,861) 34,918


9) Earning Per Share

10) Schedule A to P form an integral part of Balance Sheet as at March 31, 2009 and Profit & Loss Account for the year ended on thatdate.

11) Previous year figures have been re-grouped or re-arranged wherever considered necessary.

12) Figures have been rounded off to the nearest rupee.

C. Information pursuant to paragraphs 3 & 4 of Part II of Schedule VI of the Companies Act, 1956.1) Capacity & Actual Production:

The Company does not have any outstanding dilutive potential equity shares.

Consequently the basic and diluted earning per share of the Company are the same.

2) Purchase, Stock and Sales:

3) Raw Material Consumed:


Class of Goods Units Licensed Capacity Installed Capacity Actual Production

Feldspar Powder M.T. N A N A 15,989.67(13,038.28)

Opening Stock Purchase Closing Stock Sales/ Consumption

Feldspar PowderUnit (MT) – – – 15,989.67

(13,038.28)Value (Rupees) – – – 26,265,959

(23,705,689)Feldspar LumpsUnit (MT) 509.290 18,845.135 505.285 18,849.140Value (Rupees) 434,518 15,531,514 528,859 15,437,173

31.03.2009 31.03.2008Units (MT) Value (Rupees) Units (MT) Value (Rupees)

Feldspar Lumps 18,849.14 15,437,173 18,610.90 15,244,185

31.03.2009 31.03.2008

Net Profit attributable to Share Holders 21,04,094 10,52,548Weighted average number of equity shares 9,410 9,410Basic earning per share of Rs 100/- each 223.60 111.85

(Amount in Rupees)



As per our report of even dateFor J.M. Vyas & Co. For Quality Minerals Ltd.Chartered Accountants


D. Balance Sheet Abstract and general profile of the Company under Part IV to Schedule VI of the Companies Act, 1956

1 5 7 6

3 1 0 3


Balance Sheet Date


II. Capital Raised during the year (Amount in Rs ‘000)

2 0 0 9

1 7



Public Issue

N . A . N . A .

N I L

Right Issue

N I L

Bonus Issue

N I L

Private Placement

N I L

III. Position of Mobilisation and Deployment of Funds (Amount in Rs ‘000)Total Liabilities

1 5 4 5 0

Total Assets

1 5 4 5 0

IV. Performance of the Company (Amount in Rs ‘000)Turnover

2 7 1 4 5

Total Expenditure

2 4 0 7 2

(Please tick Appropriate box + for Profit, – for Loss)

Earning per Share in Rs

2 2 3 . 6 0

Dividend %

N I L

Sources of FundsPaid-Up Capital

9 4 1


1 4 4 7 4

Secured Loans

N I L

Unsecured Loans

N I L

Deferred Tax Liability

3 5

Application of FundsNet Fixed Assets

2 2 1

Investments

1 2 0

Net Current Assets

1 5 1 0 9

Miscellaneous Expenditure

N I L

Accumulated Losses

N I L

+ – Profit/Loss before Tax

√ 3 0 7 3

+ – Profit/Loss after Tax

√ 2 1 0 4


Auditors’ Report

To the Board of Directors of Hindusthan National Glass & Industries Limited on the Consolidated Financial Statements of Hindusthan National Glass &Industries Limited and its Subsidiaries.

1. We have examined the attached Consolidated Balance Sheet of

HINDUSTHAN NATIONAL GLASS & INDUSTRIES LIMITED (“the

Company”) and its subsidiaries and associate as at March 31,

2009, the Consolidated Profit and Loss Account and also the

Consolidated Cash Flow Statement for the year then ended on

that date, annexed hereto. These consolidated financial

statements are the responsibility of the Company’s

management. Our responsibility is to express an opinion on

these financial statements based on our audit.

2. We conducted our audit in accordance with the generally

accepted auditing standards in India. These standards require

that we plan and perform the audit to obtain reasonable

assurance whether the financial statements are prepared, in all

material respects, in accordance with an identified financial

reporting framework and are free of material mis-statements.

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

supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting

principles used and significant estimates made by the

management, as well as evaluating the overall financial

statements. We believe that our audit provides a reasonable

basis for our opinion.

3. We did not audit the financial statements of subsidiary

companies Glass Equipment (India) Limited and Quality Minerals

Limited for the year ended March 31, 2009 whose financial

statements reflects total assets of Rs 3544.22 lacs as at March

31, 2009 and total revenues of Rs 3147.36 lacs and cash flows

amounting to Rs (1.72) lacs for the year ended as on March 31,

2009. These financial statements have been audited by other

auditors whose report(s) has (have) been furnished to us, and in

our opinion, insofar as it relates to the amounts included in

respect of the subsidiaries, is based solely on the report of the

other auditors.

4. We did not audit the financial statements of associate Company

HNG Float Glass Limited. The Financial Statements of HNG Float

Glass Limited for the year ended March 31, 2009 as compiled

for the purpose of consolidation have been prepared by the

management and these are subject to audit by their auditors

and in our opinion, in so far as it relates to the amounts included

in respect of such associate, is based solely on the said accounts.

5. Attention is invited to Note 24E of Schedule S regarding

purchase of goods for which central Government approval as

required in terms of provisions of Companies Act, 1956 has not

been obtained by the Company.

6. Subject to Para 4 and 5 above, we report that:

i) the consolidated financial statements have been prepared

by the Company in accordance with the requirements of

Accounting Standard 21 “Consolidated Financial

Statements”, Accounting Standard 23 “Accounting for

Investment in Associates in Consolidated Financial

Statements”, issued by “The Institute of Chartered

Accountants of India” and on the basis of the individual

financial statements of the Company and its subsidiary

companies and associate included in the consolidated

financial statements.

ii) In our opinion, based on our audit and the report of other

auditors, the Consolidated Financial Statements referred to

above give a true and fair view of the financial position of

the Company and its subsidiary companies and associate as

at March 31, 2009 ; and of the results of their operations for

the year then ended in conformity with the accounting

principles generally accepted in India:

a) in the case of the Consolidated Balance Sheet, of the

consolidated state of affairs of the Company and its

subsidiary companies and associate as at 31, 2009; and

b) in the case of the Consolidated Profit and Loss Account,

of the consolidated results of operations of the

Company and its subsidiary companies and associate for

the year then ended on that date ; and

c) in the case of the Consolidated Cash Flow Statement,

of the consolidated cash flows of the Company and its

subsidiary companies and associate for the year then

ended on that date.

For Lodha & Co.

Chartered Accountants

H K Verma

Kolkata Partner

June 20, 2009 Membership No: 55104


The Schedules referred to above form an integral part of Consolidated Balance SheetAs per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director


Consolidated Balance Sheet As at March 31, 2009

(Rs in lacs)

Schedules As at 31.03.2009 As at 31.03.2008

SOURCES OF FUNDS

Shareholders' Funds

Share Capital A 1746.77 1746.77

Reserves and Surplus B 93153.70 86244.22

94900.47 87990.99

Loan Funds

Secured Loans C 41804.23 28957.70

Unsecured Loans D 9210.65 13127.61

51014.88 42085.31

Deferred Tax Liabilities (Net) 4207.24 1845.04

Total 150122.59 131921.34


Fixed Assets E

Gross Block 139393.60 127459.54

Less : Depreciation 48553.01 42181.15

Net Block 90840.59 85278.39

Capital Work-In-Progress 8203.39 4510.60

Investments F 10213.07 11394.50


Inventories G 22784.41 17343.27

Sundry Debtors H 22723.03 16456.51

Cash and Bank Balances I 1175.74 1701.48

Loans and Advances and Other Current Assets J 19909.53 14059.66

66592.71 49560.92

Less:


Current Liabilities K 19399.72 14399.63

Provisions L 6327.45 4423.44

25727.17 18823.07

Net Current Assets 40865.54 30737.85

Total 150122.59 131921.34

Significant Accounting Policies & Notes on Accounts S


The Schedules referred to above form an integral part of Consolidated Profit and Loss AccountAs per our report of even dateFor Lodha & Co. Mukul Somany Sanjay SomanyChartered Accountants Jt. Managing Director Managing Director


Consolidated Profit and Loss Account For the year ended March 31, 2009

(Rs in lacs)

Schedules 31.03.2009 31.03.2008

INCOMESales M 146105.65 115867.01 Less : Excise Duty 13049.49 12954.42

133056.16 102912.59 Other Income N 2174.21 1122.98 Increase / (Decrease) in Stock O 1403.94 (460.84)

136634.31 103574.73 EXPENDITUREMaterials P 40844.61 30018.52 Manufacturing and Other Expenses Q 71904.55 51908.76

112749.16 81927.28 Profit before Depreciation, Interest and Tax 23885.15 21647.45 Depreciation 7850.97 7371.65 Transferred From Revaluation Reserve (306.68) (281.21)

7544.29 7090.44 Interest and Finance Expenses R 4369.55 2365.07

11913.84 9455.51 Profit before Tax 11971.31 12191.94 Less : Provision for Income Tax

- Current Tax 161.35 99.01 - Minimum Alternate Tax 1310.00 1367.20 - Less: MAT Credit Entitlement 355.00 955.00 1367.20 –- Fringe Benefit Tax 51.64 38.20 - Deferred Tax (6.99) (2683.19)- Income Tax for Earlier years (7.87) (1300.18)

Profit after Tax 10818.18 16038.10 Less: Share in Associate 181.66 –Net Profit before Minority Interest 10636.52 16038.10

- Concern Share 10637.21 16038.74 - Minority (0.69) (0.64)

Add: Balance brought forward from last year 810.62 620.23 Amount Available for Appropriation 11447.83 16658.97 APPROPRIATIONSGeneral Reserve 7200.00 15000.00 Debenture Redemption Reserve 1250.00 –Proposed Dividend on Equity Shares 899.79 725.11 Tax(including Cess) on Proposed Dividend 152.92 123.24 Balance carried to the Balance Sheet 1945.12 810.62

11447.83 16658.97 Basic and Diluted Earning per Share of Rs 10/- each 60.90 91.82 Significant Accounting Policies and Notes on Accounts S


Consolidated Cash Flow Statement For the year ended March 31, 2009



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

2) Previous Year’s figures have been regrouped wherever necessary to conform to the Current Year.

(Rs in lacs)

2008-09 2007-08

A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before Tax and extraordinary items 11971.31 12191.94Adjustments to reconcile profit before tax to cash provided by operating activities.Depreciation 7544.29 7090.44Bad Debts and Provision for Doubtful Debts 205.54 239.25 Interest Expenses (Net) 4369.55 2365.07 Dividend Income (166.71) (0.26)Liability/Provision no longer required written back (515.16) (97.38)Provision for Diminution in value of Investments (0.23) 0.17 Prior Period Income – (3.03)Interest received (498.39) (132.09)(Profit) / Loss on sale of Fixed Assets (Net) 134.04 71.56 (Profit) / Loss on sale of Current Investments (Net) (119.10) (8.15)Operating Profit before working capital changes 22925.14 21717.52 Changes in current assets and liabilitiesLoans and Advances (148.06) (4600.86)Trade and other Receivables (6472.06) (4030.18)Inventories (5442.20) (537.45)Trade and other Payables 4058.65 3853.33 Net Cash Generated by Operating Activities 14921.47 16402.36 Adjustments for :Direct Taxes Paid (1550.88) (149.63)Fringe Benefit Tax Paid (42.84) (38.27)Net Cash from Operating Activities 13327.75 16214.46

B. CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Fixed Assets and Changes in Capital Work in Progress (16617.50) (12927.73)Proceeds on Disposal of Fixed Assets 680.78 169.82 Purchase of Long Term Investment (0.27) (4367.93)Sale of Long Term Investment – 42.93 Purchase of Current Investments – (5794.44)Sale of Current Investments 1119.10 5802.59 Share Application Money (3500.00) –Dividend received 166.71 0.26 Interest received 235.33 59.53 Net Cash used in Investing Activities (17915.85) (17014.97)

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds/(Repayment) from long term borrowing (Net) 17041.95 810.38 Proceeds/(Repayment) from short term borrowings (Net) (8112.38) 3035.44 Dividend paid including Corporate Dividend Tax (848.05) –Interest paid (4019.16) (2349.58)Net Cash from Financing Activities 4062.36 1496.24 Net changes in Cash and Cash equivalents (525.74) 695.73 Opening Cash and Cash equivalents 1701.48 1005.75 Cash and Cash equivalents at the end of the year 1175.74 1701.48 (represents Cash in Hand and Bank balances)


Schedules forming part of the Consolidated Accounts

31.03.2009 31.03.2008

Authorised51,15,00,000 Equity Shares of Rs 10/- each (Previous Year 51,15,00,000 shares of Rs 10/ each) 51150.00 51150.00

51150.00 51150.00 Issued, Subscribed and Paid-Up1,74,67,713 Equity shares (Previous Year 1,10,43,368 shares) of Rs 10/- each fully paid up of 1746.77 1104.34

which 58,10,360 Equity Shares of Rs 10/- each were allotted as fully paid up Bonus shares by Capitalisation of General Reserve and 64,24,345 Equity Shares of Rs 10/- each issued as fully paid up pursuant to a Scheme of Amalgamation and arrangement for consideration other than cash.

Share Suspense Account (pending allotment pursuant to the Scheme of Arrangement) – 642.43 1746.77 1746.77



(Rs in lacs)

31.03.2009 31.03.2008

Capital Reserve on Consolidation 2.90 2.90Investment Allowance Reserve 0.57 0.57General ReserveAs per last Balance Sheet 60774.76 17740.09Add/(Less) adjustment as referred to in note no. 26 (a) of Schedule "S" 7199.53 67974.29 43034.67 60774.76 Revaluation ReserveAs per last Balance Sheet 11101.53 3388.73Add/(Less) adjustment as referred to in note no. 26 (b) of Schedule "S" (305.37) 10796.16 7712.80 11101.53Debenture Redemption ReserveAdd/(Less) adjustment as referred to in note no. 26 (c) of Schedule "S" 1250.00 –Share PremiumAs per last Balance Sheet 13553.84 1104.30Add/(Less) adjustment as referred to in note no. 26 (d) of Schedule "S" 2369.18 11184.66 12449.54 13553.84Profit & Loss AccountSurplus as per Profit & Loss Account 1945.12 810.62

93153.70 86244.22



Note: ** Represents Mibor linked Non-Convertible Debentures privately placed with LIC Mutual Fund (previous year with JM Mutual

Fund).

Short Term LoansFrom Banks 5000.00 8555.45 Non Convertible Debentures * 2500.00 3000.00 From Others – 27.04

OthersTrade Deposits 100.10 100.10 Deferment Loan 1610.55 1445.02

9210.65 13127.61

Notes 31.03.2009 31.03.2008

I) 12.75% Redeemable Non Convertible Debentures 1 and 2 10000.00 –II) Rupee Term Loans

From Financial InstitutionExport Import Bank of India 2 5304.17 6327.78

From BanksState Bank of India 2 and 3 5996.00 2432.00 The Honkong & Shanghai Banking Corporation Limited 4 9437.50 4562.50

III) Foreign Currency LoansFrom Banks

The Honkong & Shanghai Banking Corporation Limited - PCFC – 599.16ICICI Bank Limited - External Commercial Borrowing 2 1929.38 2005.50

IV) Working Capital Borrowing from Banks 5 8514.12 12709.54 V) Loans under Finance Schemes

From Banks 6 449.07 293.05 From Others 6 136.43 7.13

VI) Interest accrued and due thereon 37.56 21.04 41804.23 28957.70

Notes:1) 12.75% Secured Non Convertible Debentures amounting to Rs 100 crores, privately placed (alloted on December 22, 2008) are due for

redemption at par in three equal installments at the end of 5th, 6th and 7th year from the date of allotment with put/call option at parat the end of 3rd year from the date of allotment.

2) The loans are secured by first charge ranking pari-passu with other first charges created on all immovable properties by way of equitablemortgage and hypothecation of all moveable properties both present and future of Rishra, Bahadurgarh and Neemrana Plants, save andexcept specific assets exclusively hypothecated in favour of respective lenders.

3) These loans are also collaterally secured by second charge on Current Assets of the said plants.

4) The loans are secured by first charge ranking pari-passu with other first charges created and/or to be created on all immovable propertiesby way of equitable mortgage and hypothecation of all moveable properties both present and future of Rishikesh, Pondicherry andNashik Plants, save and except specific assets exclusively hypothecated in favour of respective lenders.

5) This is secured by hypothecation of inventories (both present and future) and book debts and second charge on all immovables, moveableproperties including land and building in favour of consortium bankers led by State Bank of India.

6) These are secured by hypothecation of the vehicles financed in favour of respective lenders.


(Rs in lacs)




GROSS BLOCK DEPRECIATION NET BLOCK Particulars Book Value Additions Deductions/ Book Value Upto For the Deductions/ Upto As on As on

at 01.04.2008 Adjustments at 31.03.2009 01.04.2008 year Adjustments 31.03.2009 31.03.2009 31.03.2008

Land 12222.72 28.03 – 12250.75 5.60 – – 5.60 12245.15 12222.72Leasehold Land 2009.07 39.29 – 2048.36 – 13.03 – 13.03 2035.33 2003.47Buildings 13375.63 335.36 (49.77) 13760.76 2460.94 426.15 – 2887.09 10873.67 10914.69Leasehold Buildings 9.18 – – 9.18 0.18 0.16 – 0.34 8.84 9.00Plant and Machinery 97740.34 12883.56 2104.12 108519.78 38883.27 7141.00 1360.09 44664.18 63855.60 58857.07Furniture and Fixtures 360.27 42.30 82.79 319.78 153.57 18.24 3.62 168.19 151.59 206.70Office and Other Equipments 373.94 50.77 11.09 413.62 194.89 41.39 11.10 225.18 188.44 179.05Vehicles 1306.59 572.98 145.70 1733.87 442.71 168.69 104.30 507.10 1226.77 863.88Computer Software 61.80 275.70 – 337.50 39.99 42.31 – 82.30 255.20 21.81Total 127459.54 14227.99 2293.93 139393.60 42181.15 7850.97 1479.11 48553.01 90840.59 85278.39Previous Year 108304.51 21071.35 1916.32 127459.54 36423.69 7371.65 1614.19 42181.15 85278.39


Face Value (Rs.) Nos. 31.03.2009 31.03.2008

A) Long TermTradeFully Paid up Equity SharesUnquoted Capexil Agencies Ltd. 1000 5 0.05 0.05 Ceramic Decorators Ltd. 10 7 0.00 0.00HNG International Ltd 10 134 0.27 – AssociateHNG Float Glass Ltd. 10 42010000 4201.00 4201.00 Less: Share of Loss for the year 181.66 –

4019.34 4201.00Other than TradeUnquoted Units of CAN FMP 13M-SRI (close ended) 10 – 1000.00 Fully Paid up Equity SharesThe Calcutta Stock Exchange Association Ltd. 1 8364 167.28 167.28 Beneficial interest in Shares held in HNG Trust 7.55 7.55 Beneficial interest in Shares held in ACE Trust 6009.35 6009.35 Surendra Khanij Pvt Ltd. 10 12000 1.20 1.20 Hasow Automation Ltd. – 4.73 Less: Provision for diminution in Investments – 4.73 GOVERNMENT SECURITIES Unquoted Deposited with Government Authorities #a) 12 Years National Savings Certificate 0.01 0.01 b) 7 Years National Savings Certificate 0.01 0.01 c) 6 Years National Savings Certificate 6.49 6.49

B) CurrentOther than TradeQuoted Kajaria Ceramics Ltd. 2 5470 1.52 1.56 # Rs 0.42 lacs since matured but not encashed 10213.07 11394.50Aggregate amount of Quoted Investments 1.52 1.56 Aggregate amount of Unquoted Investments 10211.55 11392.94

10213.07 11394.50


(Rs in lacs)

Note: Market Value of Quoted shares Rs. 1.52 lacs (Previous Year Rs. 1.56 lacs)



31.03.2009 31.03.2008

(As valued and certified by the Management)Raw Materials 5104.22 3299.50 Stores, Spare parts, Fuel and Building Materials 9205.19 7189.34 (Including in Transit Rs 238.94 lacs, Previous Year Rs 172.48 Lacs)Packing Materials 640.44 423.81 Stock in Process 625.10 546.37 Finished Goods 7209.46 5884.25

22784.41 17343.27


(Rs in lacs)


Considered good 2733.33 939.95 Considered doubtful 863.04 991.53

3596.37 1931.48 Less: Provision for doubtful debts 863.04 991.53

2733.33 939.95 Other Debts 19989.70 15516.56

22723.03 16456.51


Cash balance on hand 30.63 31.52 Cheques in hand 255.27 1078.26 Balances With Scheduled Banks

in Current Accounts 851.37 533.41 in Fixed Deposit Accounts * 38.46 18.25 in Margin Money Accounts * – 40.03

Balances With Post Office in Saving Bank Account 0.01 0.01 * (Receipts pledged with the banks and Government authorities for Rs 21.61, Previous Year Rs 57.18 lacs)

1175.74 1701.48

(Unsecured and Considered good)LoansTo Bodies Corporate 3049.50 4724.00 Advances Recoverable in cash or in kind or for value to be received 2392.02 2108.21 (Net of Doubtful Advances Rs 238.02 lacs, Previous Year Rs 240.65 lacs)VAT Credit (Inputs) Account 593.85 613.24 Share Application Money 3500.00 –Advance Income Tax 4896.86 3190.26 Tax Deducted at Source 364.70 175.80 Advance Fringe Benefit Tax 85.00 41.75 MAT Credit Entitlement 1722.57 1367.57 Deposits and balances with Government Authorities and Others Department 2902.21 1586.35 Other Deposits 25.55 155.10

19532.26 13962.28 Other Current AssetsInterest accrued on Investments 2.35 1.79Interest Receivable 352.75 85.35 Fixed Assets Held for disposal (at lower of net book value or estimated net realisable value) 22.17 10.24

19909.53 14059.66





31.03.2009 31.03.2008

Sundry CreditorsDues to Micro, Small & Medium Enterprises 68.34 55.68 Others 15809.93 13340.75

Interest accrued but not due on Loans 454.64 104.25 Commission to Directors 139.09 118.40 Other Liabilities 2927.40 780.53Unclaimed dividend 0.32 0.02 * This is not due for payment to Investor Education & Protection Fund.

19399.72 14399.63


(Rs in lacs)

For Taxation 3898.23 2445.13 For Gratuity and Unavailed Leave 1282.51 1088.01 For Fringe Benefit Tax 94.00 41.95 For Proposed Dividend 899.79 725.11 For Tax on Proposed Dividend 152.92 123.24

6327.45 4423.44


Finished Goods 145845.14 115000.57 General Merchandise Sale 76.95 163.03 Others 183.56 703.41

146105.65 115867.01 Less: Excise Duty 13049.49 12954.42

133056.16 102912.59


Hire charges and Lease Rental 1.20 24.54 Dividends on Trade and Long Term Investments 166.71 0.26 Interest on- Loan 428.47 51.93 - Deposits 49.87 20.18 - Investments 0.62 0.07 - Others 2.21 0.21 - Tax Refunds 17.32 0.52 Rent 39.93 34.38 Insurance Claims 9.62 1.98 Miscellaneous Receipts 808.32 483.53 Liabilities / Provisions no longer required written back 515.16 97.38 Profit on Assets Sold/Discarded 15.68 15.46 Profit on Sale of Current Investment - Other than Trade 119.10 8.15 Foreign Exchange Fluctuations (Net) – 310.07 Income from derivatives – 71.29 Prior Period Income – 3.03

2174.21 1122.98



Schedules forming part of the Consolidated Accounts(Rs in lacs)

Raw Materials Consumed 40553.79 29646.93 Purchase of Trading Material 290.82 371.59

40844.61 30018.52


31.03.2009 31.03.2008

Closing StockFinished Goods 7209.46 5884.25 Work-in-Process 625.10 546.37

7834.56 6430.62 Less :Opening Stock Finished Goods 4765.61Add: Transfer pursuant to scheme of amalgamation 5884.25 1648.06 6413.67 Work-in-Process 424.07Add: Transfer pursuant to scheme of amalgamation 546.37 53.72 477.79

6430.62 6891.46 Increase / (Decrease) 1403.94 (460.84)

Stores and Spare Parts Consumed 7621.57 5111.74 Power and Fuel 36853.90 27200.22 Packing Material Consumed and Packing Charges 9123.08 7605.62 Salaries, Wages, Bonus and Gratuity 5791.90 4514.95 Contribution to Provident and Others Funds 763.03 741.04 Workmen and Staff Welfare Expenses 397.39 439.01 Rent (Including Lease Rent) 93.43 95.43 Rates and Taxes 44.04 58.85 Repair and Maintenance:-

Building 186.95 132.87 Plant and Machinery 932.17 1061.60 Others 239.29 210.98

Freight outwards, Transport and Other Selling Expenses (Net of realisation of Rs 1214.21 lacs, Previous year Rs 983.56 lacs) 1232.83 1004.07 Washing and Grinding Charges 78.84 67.06 Commission on Sales 140.78 116.10 Insurance 153.23 150.22 Charity and Donation 40.93 31.00 Bad Debts/Advances Written Off 265.23 185.81Less: Provision for Doubtful Debts / advances 265.16 0.07 195.92 (10.11)Provision for Doubtful Debtors/Advances 205.47 249.36 Excise Duty on Stock (177.05) (28.93)Director's Remuneration 332.62 280.43 Provision For Loss on Derivative Transactions 1833.05 313.94 Foreign Exchange Fluctuation (Net) 2326.33 –Loss on sale and discard of fixed assets 149.72 87.02 Provision for diminution in value of investments (0.23) 0.17 Miscellaneous Expenses 3541.21 2476.12

71904.55 51908.76





31.03.2009 31.03.2008

On Debentures 429.13 569.50 On Term Loans 2570.41 1510.40 Bank and Others 974.27 153.39 Finance Expenses 395.74 131.78

4369.55 2365.07


(Rs in lacs)

Notes on the Consolidated Financial Statement of the Company and its Subsidiaries and Associates.1. PRINCIPAL OF CONSOLIDATION

a) The Consolidated Financial Statements have been prepared in accordance with the Accounting Standard 21 (AS 21) on “ConsolidatedFinancial Statements” and Accounting Standard 23 (AS 23) on "Accounting for Investments in Associates in Consolidated FinancialStatements" issued by “The Institute of Chartered Accountants of India”.

b) The Subsidiaries (which along with Hindusthan National Glass & Industries Ltd., the holding Company, constitute the group) havebeen considered in the preparation of these consolidated financial statements are:

d) Consolidation Proceduresi) For preparation of consolidated financial statements, the financial statements of the Company and its subsidiaries have been

combined on a line - by - line basis by adding together like items of assets, liabilities, income and expenditures, after eliminatingIntra group balances and transactions and the resulting unrealised profit & losses.

ii) Investments in Associate is accounted in accordance with AS-23 on "Accounting for Investments in Associates in ConsolidatedFinancial Statements", under "Equity Method".

iii) The difference between the cost of investment in the associate and the share of net assets at the time of acquisition of sharesin the associate is identified in the financial statements as Goodwill or Capital Reserve as the case may be.

e) Other Significant Accounting PoliciesI. Accounting Convention

The accounts, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been preparedon the basis of the historical cost and on the accounting principles of a going concern. The accounts have been prepared inaccordance with the provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (AccountingStandards) Rules, 2006.

II. Use of EstimatesThe preparation of financial statements require management to make estimates and assumption that affect the reportedamount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and thereported amounts of income and expenses during the year. Difference between the actual results and the estimates arerecognised in the year in which the results are known /materialised.

III. Fixed AssetsFixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have beenrevalued or at fair value as the case may be.

c) Investment in Associate

Schedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

Name of Subsidiary Percentage of voting power either

directly or through subsidiaries as at

31.03.2009 31.03.2008

Glass Equipment (India) Ltd. 100.00 100.00

Quality Minerals Ltd. 99.73 99.73

Name of Associate Percentage of voting power

held as at

31.03.2009 31.03.2008

HNG Float Glass Ltd. 41.33 48.49



IV. Depreciation and AmortisationTangible Assetsi. Depreciation except otherwise stated has been provided at the rates specified under Schedule XIV to the Companies Act,

1956 on assets installed/acquired up to March 31, 1990 on written down value method and in respect of additions thereafteron straight line method.

ii. Certain Plant and Machinery have been considered as continuous process plant as defined under Schedule XIV to theCompanies Act, 1956 on the basis of technical evaluation.

iii. Depreciation on increase in value of Fixed Assets due to revaluation is provided on the basis of remaining useful life asestimated by the valuer on the straight line method and is transferred from Revaluation Reserve to Profit and Loss Account.

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

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

Intangible Assetsvi. Computer Softwares are amortised on straight line method @33.33% over a period of three years

V. Impairment Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assetsbelonging to Cash Generating Unit (CGU) exceeds recoverable amount. The recoverable amount is the greater of assets netselling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets arediscounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverableamount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying valueor the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.

VI. InvestmentsLong Term Investments are stated at cost, less provision for diminution in value other than temporary, if any. Current Investmentsare valued at cost or fair value whichever is lower.

VII. InventoriesInventories are valued at the lower of cost or estimated net realisable value. In respect of Raw Materials, Stores, Spare Parts,Fuel, Building and Packing Materials the cost include the taxes and duties other than those recoverable from taxing authoritiesand other expenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost includemanufacturing expenses and appropriate portion of overheads. The cost of inventories is determined on the weighted averagebasis.

Own manufactured moulds used for the manufacture of glass items are recorded at weighted average cost, which includesprime cost, factory and general overheads and the same are classified as stores and spare parts under inventories.

VIII. Foreign Exchange Transactions and DerivativesTransactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreigncurrency monetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereonand also on the exchange differences on settlement of the foreign currency transaction during the year are recognised asincome or expenses in the Profit and Loss Account.

Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency riskon unexecuted firm commitments or of highly probable forecast transactions are recognised in the period in which they ariseand the difference between the forwards rate and exchange rate at the date of transaction is recognised as income/expenseover the life of the contract.

Keeping in view the announcement of “The Institute of Chartered Accountants of India” dated March 29, 2008 regardingaccounting for derivatives, mark to market losses on all other derivatives contracts (other than forward contracts dealt asabove) outstanding as at the year end, are recognised in the accounts.

IX. Revenue Recognitioni) All Expenses and Incomes are accounted for on mercantile basis except otherwise stated.




ii) Income from Export Incentives, insurance and other claims, etc is recognised on the basis of certainties as to its utilisationand related realisation.

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

X. CENVAT / Value Added Tax (VAT) CreditCenvat / VAT credit whenever availed on Fixed Assets is set off with the cost of the assets. Other Cenvat / VAT credit whereveravailed is adjusted with the cost of purchases of Raw Material or Stores as the case may be.

XI. Employee BenefitsEmployee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Planfor its employees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fundwhich are fully funded and administered by the Trustees / Government. The Company contributes to the Employees’ PensionScheme, 1995 for certain categories of employees. Contributions are recognised in the Profit and Loss Account on accrualbasis.

Long-term employee benefits under define benefit scheme such as gratuity, leave encashment etc. are determined at the closeof each year at the present value of the amount payable using actuarial valuation techniques.

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

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

XIII. Subsidies and GrantsCash Subsidy related to Fixed Assets to the extent received is adjusted to the cost of respective fixed assets. Subsidy related tothe total investment in the project is treated as Capital Reserve. Other Government grants including incentives etc. are creditedto Profit and Loss Account or deducted from the related expenses.

XIV. Borrowing CostBorrowing cost that are attributable to the acquisition/construction of Fixed Assets are capitalised as part of the cost of respectiveassets. Other borrowing costs are recognised as an expense in the year in which they are incurred.

XV. Income TaxProvision for Tax is made for current tax, deferred tax and fringe benefit taxes. Current tax is provided on the taxable incomeusing the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, whichare capable of reversal in subsequent periods are recognised using tax rates and tax laws, which has been enacted orsubstantively enacted. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficientfuture taxable income will be available against which such deferred tax assets will be realised. In case of carry forward ofunabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is “virtual certainty” that such deferredtax assets can be realised against future taxable profits.

XVI. LeaseWhere the Company is the lessee, finance leases, which effectively transfer to the Company substantially all the risks andbenefits incidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of theminimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportionedbetween the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges arecharged directly against income. Lease management fees, legal charges and other initial direct costs are capitalised.

Leases rentals in respect of assets taken under finance lease up to March 31, 2001 are amortised over the total term of thelease (including extended secondary lease term).

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classifiedas operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-linebasis over the lease term.

XVII. Provision, Contingent Liabilities and Contingent AssetsProvisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as aresult of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nordisclosed in the financial statements. Contingent Liabilities, if material are disclosed by way of notes.



Schedules forming part of the Consolidated AccountsSchedule – S ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)

NOTES ON ACCOUNTS

6) Fixed assets at Nashik Plant estimated to have lower residual lives than that envisaged as per the rates provided in Schedule XIV of theCompanies Act, 1956. Depreciation has been provided based on the estimated shorter residual lives as follows:

Particulars of Fixed Assets Rates as Rates of prescribed by Depreciation on

Schedule XIV to assets appliedthe Companies

Act, 1956

Buildings (other than factory buildings) 1.63 2.04Factory Buildings 3.34 5.21Plant and Machinery

Used for single shift operations 4.75 11.44Continuous Process Plant 5.28 11.44Used for Triple Shift operations 10.34 11.44

Furniture & Fixtures 6.33 17.37Computers 16.21 17.95

2008-09 2007-08

2) Contingent liabilities not provided fora) Outstanding Bank Guarantees / Letter of Credit 6410.93 1384.86b) Income Tax matter in respect of erstwhile AGCL under dispute 5.87 9.28c) Sales Tax matter under appeals 216.88 214.25d) Excise Duty and Octroi demand issued against which the Company has preferred appeals

and which in the opinion of the management are not tenable. 1639.10 1703.25e) Cases pending with labour courts (to the extent ascertainable) 544.44 549.60f) Claim for increased price of land acquired at Bahadurgarh by the then Punjab Government

and given to the Company against which the claimants have preferred an appeal in the Supreme Court against the order of the High Court. 0.30 0.30

g) Amount of duty against Export Obligation in respect of exemption availed against Advance License Scheme. 19.19 4.32

h) Other Claims against the Company not acknowledged as debt. 110.54 26.10i) Corporate Guarantee to bank/ Government authorities given on behalf of Somany Foam

Limited. 3235.00 3235.00j) Counter Guarantee furnished to Government and other authorities on behalf of Glass

Equipment (India) Ltd. (Subsidiary Company) – 381.00k) Surety given to Sales Tax department. 50.00 50.75Notes :On the basis of current status of individual cases and as per the legal advice obtained, wherever applicable the management is of the view that no provision is required in respect of these cases. Further Cash outflow in respect of item no. b) to h) as mentioned above is dependent upon outcome of final judgment/decision.

3) In respect of Neemrana Plant a notice has been received from Civil Court filed by the creditors Nil Nilof Haryana Sheet Glass Limited demanding their outstanding payments and stating that plant can not be transferred unless their dues are paid. However, the matter is under dispute/litigation.

4) Capital commitments (Net of advance of Rs 1319.85 lacs previous year Rs 362.51 lacs) 10432.75 1222.375) Capital work in progress includes pre-operative expenses pending allocation.

a) Salary and Wages Nil 23.99b) Power and Fuel 11.24 23.02c) Miscellaneous expenses 150.80 31.21d) Interest on Term Loan 180.16 239.25

Add: Brought Forward from previous year 413.97 163.97Less: Capitalised 756.17 67.47Total Carried Forward Nil 413.97

(Rs in lacs)



2008-09 2007-08

7) i) Land and Buildings of Rishra and Bahadurgarh units were revalued by an approved 10891.99 10891.99 valuer on April 1, 1992 and on March 31, 2006 on current replacement cost basis. Accordingly, net amount transferred to Revaluation Reserve Account.

ii) a) Plant and Machinery of Rishra and Bahadurgarh units were revalued by an approved 4831.31 4831.31 valuer, on April 1, 1995 on current replacement cost basis.

b) Plant and Machinery of GEIL unit were revalued by an approved valuer on March 31, 419.61 499.962008 by using residual replacement value method. Accordingly, net amount transferred to Revaluation Reserve Account.

iii) Depreciation transferred from Revaluation Reserve Account to Profit and Loss Account. 306.68 281.21

(Rs in lacs)

2008-09 2007-08

a) Payment to Statutory Auditors *i) Audit Fees 5.38 9.38ii) Tax Audit Fees 1.68 1.60iii) Management Services and Certification work 5.30 2.00iv) Reimbursement of Expenses 0.56 0.73

b) Payment to Branch Auditors *i) Audit Fees 4.00 Nilii) Management Services and Certification work 2.31 Niliii) Reimbursement of Expenses 2.99 Nil

8) Miscellaneous Expenses include

2008-09 2007-08

Profit after Tax (Rs in lacs) 10818.18 16038.10Number of shares outstanding 17467713 17467713Earning per share (Basic) (Rs) 60.90 91.82

10) Earning per share

2008-09 2007-08

9) Sundry Creditor include acceptances 4388.48 392.14

11) Financial and Derivative Instruments:a) The Company had entered into certain derivative transactions, the cash flows arising therefrom being recognised in the books of

account as and when the settlements took place in accordance with the terms of the respective contracts over the tenure thereof.However, in pursuance of announcement dated March 29, 2008 of “The Institute of Chartered Accountants of India” on “Accountingfor derivatives” and as a matter of prudence:

i) mark to market loss on account of derivative transaction as on March 31, 2009 estimated to be Rs 510.46 lacs out of which Rs 313.94 lacs has been provided in previous year and balance has been accounted during current year.

ii) in respect of another derivative contract in respect of which the claim raised was at Rs 404.18 lacs as on March 31, 2008 hasceased to exist on November 19, 2008 and Knock Out intimation has since been received during the year. The Claim raised onthe Company interalia including on account of daily range accrual as on March 31, 2009 estimated to be Rs 1636.53 lacsincluding interest has been provided for during the year.

The matters are subjudice and the Company has been legally advised that these contracts are void ab- initio.

* excluding Service Tax

2008-09 2007-08

b) Outstanding derivative instruments 510.46 3993.25c) Foreign currency exposure outstanding as on March 31, 2009 whish has not been

hedged by the derivative instruments:Loans – 9297.11Creditors 3203.02 1779.73Debtors 208.72 1069.01

d) The amount of Exchange Gain/(Loss) of Foreign Currency Transaction adjusted to 362.40 310.07respictive heads of accounts of the Profit and Loss Account



13) Prior Period item aggregating Rs 448.03 lacs (net) (previous year Rs Nil) has been booked under the head Miscellaneous Expenditure inthe Profit & Loss Account. Pursuant to the Scheme of Amalgamation and Re-organization of Capital (the Scheme) under Section 391 to394 of the Companies Act, 1956, with effect from April 1, 2006 (the appointed date). Ace Glass Containers Limited (AGCL) had mergedwith the Company in the previous year. In terms of the Scheme, all fixed assets were recorded at the fair values as of the appointed date.While recording such assets in the books in the previous financial year, the value of certain assets were overstated / understated. Theseassets have now been restated in current year at their appropriate value by decreasing an amount of Rs 527.77 lacs in the value of fixedassets and prior period income adjustment by Rs 79.74 lacs in respect of discarded assets.

14) a) The breakup of Deferred Tax Assets and Deferred Tax Liabilities is as given below:


Deferred Tax AssetsBrought Forward Losses and unabsorbed depreciation 1956.04 (1959.99) (3.95)Expenses Allowable on Payment Basis 431.97 274.56 706.53Provision for Loss on Derivative transactions 106.71 623.06 729.77Provision for Doubtful Debts 347.69 (54.45) 293.24Total Deferred Tax Assets 2842.41 (1116.82) 1725.59Deferred Tax LiabilitiesDepreciation 4687.45 1245.38 5932.83Total Deferred Tax Liabilities 4687.45 1245.38 5932.83Net Deferred Tax Liabilities (1845.04) (2362.20) (4207.24)

b) In terms of Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 as sanctioned by the Hon’ble High Courtof Calcutta vide its Order dated April 7, 2008 and by Hon’ble High Court at Delhi vide its Order dated March 19, 2008, deferred taxliability of Rs 2369.18 lacs for the holding Company for the year has been adjusted to Share Premium Account.

c) The Company has provided for Minimum Alternate Tax (MAT). The Company is entitled to MAT Credit and accordingly, based onevidences MAT Credit of Rs 355.00 lacs (previous year Rs 1367.20 lacs) has been recognised in these accounts.

d) Provision for Income Tax has been made after considering the set off of unabsorbed depreciation and brought forward business lossof erstwhile Ace Glass Containers Limited merged with the Company with effect from April 1, 2006.

15) The Company has incurred Rs 38.26 Lacs (Previous year Rs 7.91 lacs) on account of Research and Development expenses, which has beencharged to Profit and Loss Account.

16) As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard aregiven below:

Defined Contribution SchemeContribution to Defined Contribution Plan, recognised for the year are as under:

Employer’s Contribution to Provident Fund 217.26Employer’s Contribution to Pension Fund 245.41Employer’s Contribution to Superannuation Fund 16.29

The guidance note on implementing Accounting Standard (AS-15) (Revised 2005) on Employees Benefits issued by Accounting StandardBoard (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be made by the employers

2008-09 2007-08

12) a) Electricity duty waiver benefit under State Incentive Schemes and subsidy received under 108.76 81.78 State Incentive has been credited to Power and Fuel Account.

b) Interest subsidy towards Interest on Term Loan receivable under State Investment 75.21 NilPromotion Policy has been adjusted with Interest on Term Loan paid.

c) Amount included in VAT Credit Inputs Account shown under Loans and Advances can 515.23 411.40be utilised only after repayment of corresponding amount of Sales Tax Deferred Loan. The balance amount of Rs 78.62 lacs (previous year Rs 201.84 lacs) is available for utilisation.

(Rs in lacs)



needs to be treated as “Defined Benefit Plan”. According to the management, in consultation to the actuary, it is not practical or feasibleto actuarially value the Provident liability in the absence of any guidance from Actuarial Society of India and also due to the fact thatthe rate of interest as notified by the Government can vary annually. Accordingly, the Company is currently not in a position to provideother related disclosures as required by the aforesaid AS – 15 read with ASB guidance. However, with regard to the position of the fundand confirmation of the Trustees of such fund, there is no shortfall as at year-end.

Defined Benefit PlanThe employees’ gratuity fund scheme managed by Birla Sun Life Insurance is a defined benefit plan. The present value of obligation isdetermined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving riseto additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation forleave encashment is recognised in the same manner as gratuity.

I. Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances thereofare as follows:

II. Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows:

III. Expense recognized in the Income statement (Under the head “Contribution to provident and other funds” – Refer Schedule Q)

V. Compensated AbsencesThe actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the company as atMarch 31, 2009 is Rs. 252.19 lacs.


Liability at beginning of the year 710.07 726.88 203.47Current Service Cost 60.05 66.83 27.46Interest Cost 50.76 57.78 17.06Actuarial (Gain) / Loss 61.81 (98.01) 31.03Benefits paid 66.54 (35.86) 2.07Liability at the end of the year 816.14 717.61 252.19

(Rs in lacs)


Current Service Cost 60.05 66.83 199.45Interest Cost 50.76 57.78 17.06Expected Return on plan assets 54.80 Nil NilNet Actuarial (Gain) / Loss to be recognized 115.33 (98.01) 31.03Expenses recognized in Profit and Loss account 171.34 26.59 75.54

Gratuity (Funded)


IV. Balance Sheet Reconciliation


Opening Net Liability 25.13 726.88 203.47Expenses as above 171.35 26.59 75.54Employers Contribution 45.87 35.86 26.81Amount Recognised in Balance Sheet 742.86 717.61 252.19



The following table shows the distribution of the Company’s Debtors by Geographical market.Sundry Debtors by Geographical Market

The estimates of rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion andother relevant factors including supply and demand in the employment market. The above information is certified by the actuary.



17) The Company’s exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the management thisis only reportable segment, as per the Accounting Standard 17 on Segment Reporting, issued under Companies (Accounting Standards)Rules, 2006.

Geographical SegmentThe following table shows the distribution of the Company’s Sales by Geographical market.

Sales Revenue by Geographical Market

18) The accounts of some of the customers are pending reconciliation / confirmation and Sales Tax deferment loan of Rs 1610.55 lacs issubject to confirmation and the same have been taken as per the balances appearing in the books. A provision of Rs 863.04 lacs (Previousyear Rs 991.53 lacs) is carried in the books against doubtful debts and the management is of the opinion that the same is adequate andno further provision is required there against.

19) In the opinion of the Management/Board of Directors, the “Current Assets and Loans and Advances” have a value on realisation in theordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

20) Disclosure of sundry creditors under current liabilities is based on the information available with the Company regarding the status ofthe suppliers as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” (the Act). There are no delays inpayment made to such suppliers. There is no overdue amount outstanding as at the balance sheet date. Based on above the relevantdisclosures u/s 22 of the Act are as follows:



(Rs in lacs)



1. Principal amount outstanding at the end of the year 68.342. Interest amount due at the end of the year Nil3. Interest paid to suppliers Nil

21) Profit or loss on sale of Raw Materials and Stores has been adjusted in consumption.

22) Stores and Spare Parts consumption includes materials consumed for Repairs and Replacement.

23) Inventories of Stores and Spare Parts include items, which are lying with the Company. A provision of Rs 679.51 lacs (including Rs 61.48lacs for the year) towards obsolescence is carried in the books and the management is of the opinion that the same is adequate and nofurther provision is required there against.

VI. Principal Actuarial assumptions at the Balance Sheet Date


Mortality Table LICI 1994-1996 LICI 1994-1996 LICI 1994-1996Discount rate (per annum) 7.50 % 8.00 % 8.50 % / 7.50 %Expected rate of return on plan assets (per annum) 8.00 % 8.00 % 8.00 %Rate of escalation in salary (per annum) 5.00% 5.00 % 5.00 %



Current Year Previous year

Entities Entitiesover which over which

Directors and Directors andDirectors and their relatives Directors and their relatives

Associate their relatives have influence Associate their relatives have influence24(i) 24(ii) 24(iii) 24(i) 24(ii) 24(iii)

IncomeSales of Goods 46.06 3.21 Sales of Fixed Assets 0.42 1.05 Rent Received 27.97 13.20 Interest Received 400.46 47.27 Services Given 0.47 265.14 ExpensesPurchases 2.51 14.56 25.59 Purchase of Assets 1.33 Services Taken 301.14 Remuneration Paid 326.80 271.27 Sitting Fees Paid 0.16 0.01 Interest Paid 38.86 9.84 Purchase of Investments 0.27 4.73 Borrowings and LendingsLendings 4500.00 Borrowings 1501.70 64.00 Guarantee/Corporate Guarantee:Given 3235.00 3235.00 OutstandingsReceivables* 3135.78 4528.88 Payables 28.65 9.47 83.66

(Rs in lacs)

24) Related Party Disclosures as identified by the management in accordance with the Accounting Standard – 18.A) Associate

i) HNG Float Glass Limited

B) Directors and Relativesi) Mr C. K. Somany – Key Management Personnelii) Mr Sanjay Somany – Key Management Personneliii) Mr Mukul Somany – Key Management Personneliv) Mrs Amita Somany – Key Management Personnelv) Mr Bharat Somany – Relative of Key Management Personnelvi) Mr R. R. Soni – Key Management Personnel (with effect from October 27, 2008)

C) Enterprises over which any person described in [B (i) to (v)] above is able to exercise significant influence and with whom theCompany has transactions during the year.i) AMCL Machinery Limitedii) Ceramic Decorators Limitediii) Microwave Merchants Private Limitediv) Mould Equipmentv) Noble Enclave and Towers Private Limitedvi) Somany Foam Limitedvii) Topaz Commerce Limited

Disclosure of transactions between the Group and Related parties and status of outstanding balances as on March 31, 2009

* Companies in which directors are interested as member / director(s). Further, these loans were given by the erstwhile Ace GlassContainers Limited (AGCL) and none of the directors was director in AGCL and accordingly, as advised legally, the provisions of Section295 of the Companies Act, 1956 are not applicable with regard to these loans.



E) Transactions for purchase of goods with Mould Equipments are covered under Section 297 of the Companies Act, 1956. Steps arebeing taken to obtain Central Government approval for such transactions.

25) Segment Informationa) Segments have been identified by the Company in line with the Accounting Standard on Segment Reporting (AS-17), taking into

account the organisational structure as well as the different risk and returns of these segments. Details of these segments are as

Glass Container - Manufacturing and selling of Glass Bottles and Tumblers.

Glass Machines - Manufacturing and selling of Glass Forming Machines, Spares and providing related services.

Minerals - Purchase, Processing and sale of Silica Sand and Feldspar.

Reportable Segments Glass Containers Glass Machines Minerals Eliminations Total

2008-09 2007-08 2008- 09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08

I REVENUE

External Sales/services 131103.59 102129.69 1952.57 782.90 133056.16 102912.59

Inter-segment sales/services 646.68 1008.03 262.66 237.06 (909.34) (1245.09)

Total Revenue 131103.59 102129.69 2599.25 1790.93 262.66 237.06 133056.16 102912.59

II RESULT

Segment result 16026.14 13924.75 437.97 228.15 22.87 9.14 (257.02) (164.83) 16229.96 13997.21

Other expenses net of

unallocable income 387.56 (486.90)

Operating profit 15842.40 14484.11

Interest expenses (4376.39) (2371.90)

Interest income 505.32 79.74

Profit from ordinary activities 11971.33 12191.95

Net profit 11971.33 12191.95

Income Tax-Current (153.48) (167.47)

Income Tax-Deferred 6.99 2683.19

Income Tax-Fringe Benefit Tax (51.64) (38.20)

MAT Credit (955.00) 1367.57

Profit after tax 10818.20 16037.04

III OTHER INFORMATION

Segment assets 154783.55 132832.81 2782.39 2521.05 95.05 101.37 (1483.35) (1100.24) 156177.64 134354.99

Unallocated corporate assets (130.20) (130.20) 19672.14 16388.36

Total assets 175849.78 150743.35

Segment liabilities 67726.54 54086.50 654.59 896.13 16.43 49.46 (842.63) (715.29) 67554.93 54316.80

Unallocated corporate liabilities (65.00) (65.00) 12372.54 8436.62

Total liabilities 79927.47 62753.42

Capital expenditure 14446.01 20659.67 44.52 539.93 (262.54) (128.25) 14227.99 21071.35

Depreciation 7698.06 7012.76 158.24 84.11 0.18 0.20 (5.52) (6.63) 7850.96 7090.44

(Rs in lacs)



26) Adjustment made in Reserve and Surplus Account

2008-09 2007-08

a) General Reserve AccountAdd: Adjustment consequent upon amalgamation of erstwhile Ace Glass Containers Ltd. Nil 31391.22Add: Transfer from Capital Reserve Nil 0.04Add: Transfer from Profit & Loss Account 7200.00 15000.00Less: Adjustment on account of transitional provision under AS-15 Nil 118.63Less: Loss on Ace Glass Containers Limited for the year ended March 31, 2007 Nil 3146.66Less: Carrying Cost of shares held in erstwhile Ace Glass Containers Limited pursuant

to the Scheme of Amalgamation Nil 7.55Less : Merger expenses and others Nil 83.19Less: Minority Interest 0.47 0.56Total 7199.53 43034.67

b) Revaluation Reserve AccountAdd: Adjustment during the year 2.78 8054.76Less: Transfer to Profit and Loss Account 306.68 281.21Less : Adjustment on account of sale/ discard of assets 1.47 60.75Total (305.37) 7712.80

c) Debenture Redemption Reserve AccountAdd: Transfer from Profit & Loss Account 1250.00 NilTotal 1250.00 Nil

d) Share Premium AccountAdd: Adjustment consequent upon amalgamation of erstwhile Ace Glass Containers Ltd. Nil 12449.54Less: Deferred Tax Liability 2369.18 NilTotal (2369.18) 12449.54

(Rs in lacs)

27) Figures for previous year have been regrouped and/or rearranged wherever considered necessary.

28) Schedule "A" to "L" and "S" form part of Consolidated Balance Sheet and Schedule "M" to "S" form part of Consolidated Profit and LossAccount.



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