HINDUSTHAN NATIONAL GLASS & INDUSTRIES LTD.

Transcription

1 HINDUSTHAN NATIONAL GLASS & INDUSTRIES LTD. Registered Office: 2 Red Cross Place Kolkata NOTICE Notice is hereby given that the Sixty-seventh Annual General Meeting (AGM) of the Members of Hindusthan National Glass & Industries Limited will be held on Friday, September 27, 2013, at a.m. at CII - Suresh Neotia Centre of Excellence for Leadership, DC-36, Sector-I, Salt Lake City, Kolkata, behind City Centre to transact the following business: Ordinary Business(es) 1. To receive, consider and adopt the Audited Balance Sheet as at March 31, 2013, the Statement of Profit & Loss for the year ended on that date, the Reports of the Directors and the Auditors thereon. 2. To declare dividend on equity shares for the financial year ended March 31, To appoint a Director in place of Shri Ratna Kumar Daga, who retires by rotation and being eligible, offers himself for reappointment. 4. To appoint a Director in place of Shri Chandra Kumar Somany, who retires by rotation and being eligible, offers himself for reappointment. 5. To re-appoint M/s. Lodha & Co., Chartered Accountants, as Statutory Auditors of the Company for the period commencing from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting and to authorize the Board of Directors to fix their remuneration and reimbursement of out of pocket expenses. 6. To re-appoint M/s. Singhi & Co., Chartered Accountants, as Branch Auditors of the Company s units located at Nashik, Puducherry and Rishikesh for the period commencing from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting at remuneration as may be determined by the Board of Directors in consultation with the Auditors. Special Business(es) 7. Re-appointment of Shri Rakesh Kumar Sharma as an Executive Director for a period of 2 years w.e.f. March 1, To consider and if thought fit to pass, with or without modification(s), the following Resolution as Special Resolution: RESOLVED THAT pursuant to Section 198, 269, 309 and 310 and all other applicable provisions, rules and regulations, if any, of the Companies Act, 1956 (including any amendments, statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule XIII to the said Act and subject to such approval, consents, permissions, as may be required in this regard, consent of the Company be and is hereby accorded to the re-appointment of Shri Rakesh Kumar Sharma as an Executive Director of the Company for a further period of two years, with effect from March 1, 2013 on the terms and conditions as embedded in the Agreement dated April 1, 2013, extract of which is more explicitly set out in the Explanatory Statement annexed to the Notice, as entered between the Company and Shri Rakesh Kumar Sharma (including the remuneration to be paid as minimum remuneration in the event of loss or inadequacy of profits in any financial year during the tenure of his appointment as specified in Para C of Section II of Schedule XIII to the said Act), as per details given herein below; Remuneration i. Basic Salary: ` 2,75,000/- (Rupees two lacs seventy five thousand only) per month subject to annual increment as the Board may deem fit. ii. Perquisites and Allowances: Category A a) HRA will be ` 1,65,000/- p.m. i.e. 60% of basic salary. b) Directors Commission computed in accordance with the provisions of the Companies Act, 1956 restricted to a sum of not exceeding ` 13,20,000/- (Rupees thirteen lacs twenty thousand only) per annum. c) Medical reimbursement / allowance restricted to one month s basic salary per year i.e. ` 2,75,000/- (Rupees two lacs seventy five thousand only). d) Leave travel allowance restricted to one month s basic Salary per year i.e. ` 2,75,000/- (Rupees two lacs seventy five thousand only). e) Premium towards Mediclaim Insurance Policy for him and his family for a sum not exceeding ` 10,00,000/- (Rupees ten lacs only).

2 f) Payment of subscription charges for one club plus normal charges but not admission charges. Category B a) Benefit of Provident Fund as per Company's Provident Fund Rules. b) Benefit of Gratuity as per Company s Gratuity scheme. Category C a) Use of a motor car with the service of a driver, the expenses whereof will be borne and paid by the Company. The Company shall, however, be entitled to recover a reasonable amount towards personal use of the car, if any. b) One free telephone with internet facility at his residence, laptop with data card and a mobile handset. The Company shall, however, be entitled to recover the expenditure on personal calls. c) Reimbursement of actual travelling and guest entertainment expenses reasonably incurred by him relating to the business of the Company. Minimum Remuneration: In the event of absence or inadequacy of profit in any year during his tenure as Executive Director, Shri Rakesh Kumar Sharma shall be entitled to receive the remuneration as provided in Section II of Part II of Schedule XIII of the Companies Act, 1956 or any other applicable provisions as may be in force at that time. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to alter, vary and modify the terms of the said remuneration including but not limited to salary, commission, allowances and perquisites subject to compliance of the Companies Act, 1956 or any other regulations/rules, to obtain necessary approvals, consents, permissions, if required, to furnish such information / clarifications / declaration, certificate and other papers as may be required in this regard and to do all such acts, deeds and things incidental thereto. 8. Re-appointment of Shri Sanjay Somany as Vice Chairman and Managing Director of the Company To consider and if thought fit to pass, with or without modification(s), the following Resolution as Special Resolution: RESOLVED THAT in supersession of all earlier resolutions passed in this regard and the earlier agreement dated September 24, 2010, as entered into between the Company and Shri Sanjay Somany and in accordance with and subject to the provisions of sections 198, 269, 309, 310, 314, 317, Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 (including any amendments, statutory modification(s) or re-enactment thereof for the time being in force) and further subject to approval of Central Government and such other approvals, consents, permissions, the consent of the Company be and is hereby accorded to the re-appointment and remuneration of Shri Sanjay Somany as Vice Chairman and Managing Director of the Company for a further period of 3 years w.e.f. April 1, 2013 as per details given herein below (including the remuneration to be paid as minimum remuneration in the event of loss or inadequacy of profits in any financial year during the aforesaid period as specified in Para C of Section II of Schedule XIII to the said Act). 1. Tenure For a period of three years with effect from April 1, 2013 to March 31, Salary i. Salary of ` 16,67,500/- (Rupees sixteen lacs sixty seven thousand five hundred only) per month with annual increment within the limit of 15% of the salary last drawn subject to the condition that such increase be in compliance with the provisions of section 198, 268,269, 302, 309, 310, schedule XIII and the applicable provisions of the Companies Act, ii. Commission of 1.5% (One and half percent) of the net profit computed in accordance with the provisions of the Companies Act, 1956 restricted to annual basic salary drawn in that particular year 3. Perquisites and Allowances: Category A : a) House Rent 40% of basic salary. b) Medical benefit restricted to one month's basic salary per year. c) Leave Travel Allowance restricted to one month s basic Salary per year. d) Benefit of Company's Group Insurance Scheme. e) Premia paid for insurance covered towards Personal Accident Insurance. f) Reimbursement of annual membership fee for two clubs. Category B a) Benefit of Provident Fund as per Company's Provident Fund Rules. b) Benefit of Superannuation Fund as per Company s Superannuation Scheme.

3 c) Benefit of Gratuity as per Company Gratuity Scheme. Category C a) Use of a motor car with the service of a driver, the expenses whereof will be borne and paid by the Company. The Company shall, however, be entitled to recover a reasonable amount towards personal use of the car, if any. b) Free telephone & fax facilities at his residence. The Company shall, however, be entitled to recover the expenditure on personal calls. c) Reimbursement of actual travelling and guest entertainment expenses reasonably incurred by him relating to the business of the Company. 4. Minimum remuneration: In the event of absence or inadequacy of profit in any year during his tenure Shri Sanjay Somany shall be entitled to receive the remuneration as provided in Section II of Part II of Schedule XIII of the Companies Act, 1956 or any other applicable provisions as may be in force at that time. 5. Sitting Fee: He shall not be paid any sitting fee for attending the meetings of the Board of Directors or a committee thereof. RESOLVED FURTHER THAT the agreement to be executed with Shri Sanjay Somany is be and is hereby approved. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to alter, vary and modify the terms of the said remuneration including but not limited to salary, commission, allowances and perquisites subject to compliance of the Companies Act, 1956 or any other regulations/rules, to obtain necessary approvals, consents, permissions, if required, to furnish such information / clarifications / declaration, certificate and other papers as may be required in this regard and to do all such acts, deeds and things incidental thereto. RESOLVED FURTHER THAT Shri Sujit Bhattacharya and Shri Kishore Bhimani be and are hereby, severally, authorized to enter into the agreement as aforesaid for and on behalf of the Company with Shri Sanjay Somany and to affix the common seal of the Company thereon. 9. Re-appointment of Shri Mukul Somany as Vice Chairman and Managing Director of the Company To consider and if thought fit to pass, with or without modification(s), the following resolution as Special Resolution: RESOLVED THAT in supersession of all earlier resolutions passed in this regard and the earlier agreement dated September 24, 2010, as entered into between the Company and Shri Mukul Somany and in accordance with and subject to the provisions of sections 198, 269, 309, 310, 314, 317, Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 (including any amendments, statutory modification(s) or re-enactment thereof for the time being in force) and further subject to approval of Shareholders, Central Government and such other approvals, consents, permissions, the consent of the Company be and is hereby accorded to the re-appointment and remuneration of Shri Mukul Somany as Vice Chairman and Managing Director of the Company for a further period of 3 years w.e.f. April 1, 2013 as per details given herein below (including the remuneration to be paid as minimum remuneration in the event of loss or inadequacy of profits in any financial year during the aforesaid period as specified in Para C of Section II of Schedule XIII to the said Act). 1. Tenure For a period of three years with effect from April 1, 2013 to March 31, Salary i. Salary of ` 16,67,500/- (Rupees sixteen lacs sixty seven thousand five hundred only) per month with annual increment within the limit of 15% of the salary last drawn subject to the condition that such increase be in compliance with the provisions of section 198, 268,269, 302, 309, 310, schedule XIII and the applicable provisions of the Companies Act, ii. Commission of 1.5% (One and half percent) of the net profit computed in accordance with the provisions of the Companies Act, 1956 restricted to annual basic salary drawn in that particular year 3. Perquisites and Allowances: Category A : a) House Rent 40% of basic salary. b) Medical benefit restricted to one month's basic salary per year. c) Leave Travel Allowance restricted to one month s basic Salary per year. d) Benefit of Company's Group Insurance Scheme. e) Premia paid for insurance covered towards Personal Accident Insurance. f) Reimbursement of annual membership fee for two clubs.

4 Category B a) Benefit of Provident Fund as per Company's Provident Fund Rules. b) Benefit of Superannuation Fund as per Company s Superannuation Scheme. c) Benefit of Gratuity as per Company Gratuity Scheme. Category C a) Use of a motor car with the service of a driver, the expenses whereof will be borne and paid by the Company. The Company shall, however, be entitled to recover a reasonable amount towards personal use of the car, if any. b) Free telephone & fax facilities at his residence. The Company shall, however, be entitled to recover the expenditure on personal calls. c) Reimbursement of actual travelling and guest entertainment expenses reasonably incurred by him relating to the business of the Company. 4. Minimum remuneration: In the event of absence or inadequacy of profit in any year during the tenure, Shri Mukul Somany shall be entitled to receive the remuneration as provided in Section II of Part II of Schedule XIII of the Companies Act, 1956 or any other applicable provisions as may be in force at that time. 5. Sitting Fee: He shall not be paid any sitting fee for attending the meetings of the Board of Directors or a committee thereof. RESOLVED FURTHER THAT the agreement to be executed with Shri Mukul Somany is be and is hereby approved. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to alter, vary and modify the terms of the said remuneration including but not limited to salary, commission, allowances and perquisites subject to compliance of the Companies Act, 1956 or any other regulations/rules, to obtain necessary approvals, consents, permissions, if required, to furnish such information/ clarifications/ declaration, certificate and other papers as may be required in this regard and to do all such acts, deeds and things incidental thereto. RESOLVED FURTHER THAT Shri Sujit Bhattacharya and Shri Kishore Bhimani be and are hereby, severally, authorized to enter into the agreement as aforesaid for and on behalf of the Company with Shri Mukul Somany and to affix the common seal of the Company thereon. 10. Enhancement of limit in terms of Section 293(1)(d) of the Companies Act, 1956 to borrow additional funds up to ` 4,000 Crores. To consider and if thought fit to pass, with or without modification(s), the following resolution as an ordinary resolution: RESOLVED THAT pursuant to the provisions of section 293(1)(d) of the Companies Act, 1956 and all other enabling provisions, if any, the consent of the Company be and is hereby granted to the Board of Directors for borrowing, from time to time, any sum or sums of money which, together with the monies already borrowed by the Company (apart from the temporary loans obtained or to be obtained from the Company s bankers in the ordinary course of business), which may exceed the aggregate for the time being of the paid up capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose, provided that the total amount of money/monies so borrowed by the Board of Directors shall not at any particular point of time exceed the limit of ` 4,000 crores (Rupees four thousand crores only). 11. Creation of charge / mortgage / hypothecation etc. on Company s movable or immovable properties in terms of Section 293(1)(a) of the Companies Act, To consider and if thought fit to pass, with or without modification(s), the following resolution as an ordinary resolution: RESOLVED THAT the consent of the Company be and is hereby accorded in terms of Section 293(1)(a) and other applicable provisions, if any, of the Companies Act, 1956 to the Board of Directors of the Company to mortgage, create charge(s) and /or hypothecate in addition to the existing mortgage(s), charges(s), and hypothecation(s) on all or any of the immovable and / or movable properties of the Company, wheresoever situate, both present and future, in such form and manner with such ranking at such time on such terms and conditions as Board of Directors may deem fit, with or without the power to enter upon and take possession of the assets of the Company together with the power to take over the Management of any business or concern of the Company, in event of default, in favour of the lender(s) for securing loan upto an aggregate amount of ` 4,000 crores (Rupees four thousand crores only). RESOLVED FURTHER that the Board of Directors of the Company be and is hereby authorized to finalize the documents for creation of aforesaid mortgage(s) and /or charge(s) and /or debt instruments including any modification(s) therein and to do all such acts and things as

5 Notes: may be necessary for giving effect and full force to the aforesaid resolution. By Order of the Board of Directors For Hindusthan National Glass & Industries Limited Registered Office: 2, Red Cross Place Kolkata Date: August 9, 2013 (Ajay Kumar Rai) Company Secretary 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING MAY APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF IN THE MEETING. THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. 2. A proxy form, duly completed and stamped, must reach the Registered Office of the Company not less than 48 hours before the commencement of the meeting. In case, several joint holders attend the meeting, only such joint holder who is higher in order of names will be entitled to vote at meeting. 3. The Register of Members and Share Transfer Book of the Company will remain closed from September 20, 2013 to September 27, 2013 (both days inclusive) for the purpose of Annual General Meeting and payment of dividend (if any). The dividend on equity shares, if declared at the meeting, will be paid to those members whose names shall appear on the Company s Register of Members on September 19, Shareholders holding shares in the physical form, who wish to avail the Electronic Clearing Service (ECS) facility, may send their ECS mandate in the prescribed form as enclosed herewith to the Company. 5. The Securities & Exchange Board of India (SEBI) has mandated the requirement of having a Permanent Account Number (PAN) by every participant of the securities market. Members holding shares in electronic form are, therefore, requested to submit their PAN to their respective Depository Participants. Members holding shares in physical form can submit their PAN details to the Company s Registrar & Share Transfer Agent. 6. The Register of Directors Shareholding and Register of Contracts maintained under section 307 & section 301, respectively under the Companies Act, 1956, will be available for inspection to the members at the AGM and all other documents as referred to in the accompanying notice are open for inspection at the registered office of the Company on all working days, except Saturdays and Sundays between a.m. to 4.00 p.m.. 7. Members are requested to intimate immediately change of address, if any, to the Registrar & Share Transfer Agent of the Company, M/s. Maheshwari Datamatics Pvt. Ltd., 6, Mangoe Lane, Kolkata and/or to the Company Secretary at the Registered Office of the Company at 2, Red Cross Place, Kolkata , quoting their folio numbers. Shareholders holding shares in the electronic mode are requested to address all their correspondence to their respective Depository Participant. 8. Members holding shares in the same name or in the same order of names but in several folios are requested to consolidate them into one folio. 9. Pursuant to section 205A and 205C of the Companies Act, 1956, all dividends remaining unclaimed for seven years from the date they become first due for payment are now required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government under the amended provisions of the Companies Act, Members shall not be able to claim any unpaid dividend neither from the fund nor from the Company once unclaimed dividends are transferred to IEPF. It may be noted that unpaid dividend for the financial year ended March 31, 2006 is due for transfer to the IEPF. 10. In terms of Article 90 of the Articles of Association of the Company, Shri Ratna Kumar Daga and Shri Chandra Kumar Somany, Directors of the Company are liable to retire by rotation at this meeting and being eligible offer themselves for re-appointment. Brief resume of the Directors, nature of their expertise in specific functional areas and names of companies in which they hold directorship and/or membership/chairmanship of Board/Committees, as stipulated under Clause 49 of Listing Agreement executed with the Stock Exchanges are provided in the Annexure attached to the Notice. The Board of Directors of the Company recommends their appointment/re-appointment. 11. Members/Proxies are advised to bring the enclosed Attendance Slip duly filled in for attending the meeting along with the Annual Report already circulated to them. Corporate members intending to send their authorized representatives to attend the meeting are requested to send a certified copy of the Board Resolution authorizing their representatives to attend and vote on their behalf at the meeting. 12. With respect to the resolution at Item No. 10 & 11 of the Notice, members are required to vote only by postal ballot/evoting in terms of section 192A of the Companies Act, The postal ballot form along with the postage pre-paid

6 envelope has been sent through separate notice. Votes cast otherwise than the postal ballot form/e-voting will be rejected. Depending on the result of the postal ballot, the said resolution will be declared having been passed or otherwise at the Annual General Meeting. 13. To support the Green Initiative measures undertaken by the Ministry of Corporate Affairs, wherein companies are allowed to send the documents in electronic mode to the shareholders, members are requested to register/update their address, in respect of shares held in dematerialized form with their respective Depository Participants and in respect of shares in physical form with Company s RTA. 14. An Explanatory Statement under section 173(2) of the Companies Act, 1956 relating to the items of the special business set out at item nos above is annexed hereto. EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 Item No. 7 The Board of Director at their meeting held on February 13, 2013 appointed Shri Rakesh Kumar Sharma as an Executive Director for a further period of two years w.e.f March 1, 2013 subject to the approval of shareholders on the terms as set out in the Agreement dated April 01, 2013 executed with him. The terms of appointment and remuneration as approved by the Board pursuant to the recommendation of the Remuneration Committee are as follows: 1. Tenure of Agreement: Two years with effect from March 1, Nature of Duties: During the tenure of the said Agreement, Shri Rakesh Kumar Sharma shall, on best effort basis, devote his time and energy to promote the interests of the Company as an Executive Director. He shall not, either during the tenure of the agreement or even after the termination of the said agreement, disclose to any person, whosoever, any information relating to the Company or its customers which ought to be considered as secret which he knows or may come to know during the course of his engagement / association with the Company. Shri Rakesh Kumar Sharma shall exercise such powers & functions and shall discharge such duties & responsibilities as may be delegated to him by the Board of Directors of the Company from time to time. 3. Remuneration: Basic Salary: ` 2,75,000/- (Rupees two lacs seventy five thousand only) per month subject to annual increment as the Board may deem fit. Perquisites and Allowances: Category A : a. House Rent Allowance will be ` 1,65,000/- p.m. i.e. 60% of basic salary. b. Directors Commission computed in accordance with the provisions of the Companies Act, 1956 restricted to a sum of not exceeding ` 13,20,000/- (Rupees thirteen lacs twenty thousand only) per annum. c. Medical reimbursement / allowance restricted to one month s basic salary per year i.e. ` 2,75,000/- (Rupees two lacs seventy five thousand only) d. Leave Travel Allowance restricted to one month s basic Salary per year i.e. ` 2,75,000/- (Rupees two lacs seventy five thousand only) e. Premium towards Mediclaim Insurance Policy for him and his family for a sum not exceeding ` 10,00,000/- (Rupees ten lacs only) f. Payment of subscription charges for one club plus normal charges but not admission charges. Category B a) Benefit of Provident Fund as per Company's Provident Fund Rules. b) Benefit of Gratuity as per Company Gratuity scheme. Category C a) Use of a motor car with the service of a driver, the expenses whereof will be borne and paid by the Company. The Company shall, however, be entitled to recover a reasonable amount towards personal use of the car, if any. b) One free telephone with internet facility at his residence, laptop with data card and a mobile handset. The Company shall, however, be entitled to recover the expenditure on personal calls. c) Reimbursement of actual travelling and guest entertainment expenses reasonably incurred by him relating to the business of the Company. 4. Minimum Remuneration: In the event of absence or inadequacy of profit in any year during the tenure as Executive Director, Shri Rakesh Kumar Sharma shall be entitled to receive the remuneration as provided in Section II of Part II of Schedule XIII of the Companies Act, 1956 or any other applicable provisions as may be in force at that time.

7 5. Sitting Fee: Shri Rakesh Kumar Sharma shall not be paid any sitting fee for attending the meetings of the Board of Directors or a Committee thereof. 6. Inspection of Documents: The agreement dated April 1, 2013 entered between the Company and Shri Rakesh Kumar Sharma is available for inspection by the Members of the Company at its Registered Office on any working day between a.m and 4.00 p.m. upto the date of this meeting and will also be available at the time of the meeting. 7. Memorandum of Interest: Shri Rakesh Kumar Sharma s appointment and remuneration, fixed in accordance with the applicable provisions of the Companies Act, 1956 read with Schedule XIII to the said Act, is subject to approvals of shareholders and the Central Government. Hence, the Special Resolution set out in Item No. 7 of the Notice is placed for your approval. Your Directors recommend passing of the said resolution in the interest of the Company. Except Shri Rakesh Kumar Sharma, none of the other Directors of the Company are in any way concerned or interested in the said resolution. Item No. 8 & 9 The Shareholders at their meeting held on September 24, 2010 appointed Shri Sanjay Somany and Shri Mukul Somany as the Vice Chairmen & Managing Directors for a period of five years with effect from October 1, As the Management predicts that the profit of the Company will not be adequate for financial year and onwards, the payment of the remuneration as approved by the Shareholders at their meeting held on September 24, 2010 will require Central Government s approval. Further, as per Schedule XIII to the Companies Act, 1956, a special resolution appointing a managerial personnel can be passed for a period of three years only, accordingly, for convenience purpose, the Board of Directors at its meeting held on May 30, 2013 decided to re-appoint Shri Sanajy Somany and Shri Mukul Somany for a fresh term of 3 years effective from April 1, 2013 in supersession of earlier resolution passed for this purpose and seek shareholders approval by way of special resolution for payment of remuneration during this new tenure to Shri Sanjay Somany & Shri Mukul Somany as per the provisions of Schedule XIII on the following terms & conditions: 1. Tenure For a period of three years with effect from April 1, 2013 to March 31, Salary i. Salary of ` 16,67,500/- (Rupees sixteen lacs sixty seven thousand five hundred only) per month with annual increment within the limit of 15% of the salary last drawn subject to the condition that such increase be in compliance with the provisions of section 198, 268, 269, 302, 309, 310, Schedule XIII and the applicable provisions of the Companies Act, ii. Commission of 1.5% (One and half percent) of the net profit computed in accordance with the provisions of the Companies Act, 1956 restricted to Annual Basic Salary drawn in that particular year. 3. Perquisites and Allowances: Category A : a) House Rent 40% of basic salary. b) Medical benefit restricted to one month's basic salary per year. c) Leave Travel Allowance restricted to one month s basic Salaryper year. d) Benefit of Company's Group Insurance Scheme. e) Premia paid for insurance covered towards Personal Accident Insurance. f) Reimbursement of annual membership fee for two clubs. Category B a) Benefit of Provident Fund as per Company's Provident Fund Rules. b) Benefit of Superannuation Fund as per Company s Superannuation Scheme. c) Benefit of Gratuity as per Company Gratuity Scheme. Category C a) Use of a motor car with the service of a driver, the expenses whereof will be borne and paid by the Company. The Company shall, however, be entitled to recover a reasonable amount towards personal use of the car, if any. b) Free telephone & fax facilities at his residence. The Company shall, however, be entitled to recover the expenditure on personal calls. c) Reimbursement of actual travelling and guest entertainment expenses reasonably incurred by him relating to the business of the Company.

8 4. Minimum remuneration: In the event of absence or inadequacy of profit in any year during the their tenure they shall be entitled to receive the remuneration as provided in Section II of Part II of Schedule XIII of the Companies Act, 1956 or any other applicable provisions as may in force at that time. 5. Sitting Fee: They shall not be paid any sitting fee for attending the meetings of the Board of Directors or a Committee thereof. 6. Inspection of Documents: A copy of the proposed agreements to be entered with Shri Sanjay Somany and Shri Mukul Somany are available for inspection at the Registered Office of the Company between am to 4.00 p.m. on any working day of the Company up to the date of Annual General Meeting. 7. Memorandum of Interest The appointment of Shri Sanjay Somany and Shri Mukul Somany as Vice Chairmen and Managing Directors will be beneficial and will be in the interest of the Company, your Directors, therefore, recommend the special resolutions set forth at item no. 8 & 9 for your approval. None of the Directors other than Shri Chandra Kumar Somany, Shri Sanjay Somany and Shri Mukul Somany are in any way concerned or interested in the resolution. Item No. 10 & 11 The Company is in the expansion phase and it has become imperative to authorise the Company to borrow additional funds by way of taking loan/facilities from various Financial Institutions/ Banks exceeding paid up share capital and free reserves of the Company. In view of the above it is required to enhance the borrowing limits from ` 3,000 crores to ` 4,000 crores The Financial Institutions from which loans/facilities are availed by the Company may insist for creation of charge in their favour, either by way of mortgage or hypothecation, on the assets of the Company, movable or immovable. Your Directors, therefore, recommend the resolutions set forth in items no.10 & 11 for your approval. None of the Directors are in any way concerned or interested in the resolution. Statement in terms of Part II of Section II of Schedule XIII to the Companies Act, Nature of Industry The Company is engaged in the manufacture of glass containers and falls under glass industry. 2. Date or expected date of commencement of commercial production At present the Company has seven units: It commissioned its first glass container plant of 30 TPD at Rishra in 1952 In 1964 it commissioned its second plant with 45 TPD at Bahadurgarh In 2001 the capacity stood at 1100 TPD In 2002 it acquired two plants at Rishikesh & Puducherry with total capacity of 700 TPD from Owens Brockway India Ltd. It acquired a 320 TPD capacity glass division from Larsen & Toubro at Nashik In 2007 it acquired 180 TPD capacity Neemrana unit of Haryana Sheet Glass In 2011 it acquired assets of Agenda Glas AG having a 320 TPD facility at Gardelegen, Germany. It Commissioned 650 TPD furnace at Nashik on June 27, th Plant at Naidupeta (650 TPD) commissioned on September 28, In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus. Not Applicable. 4. Financial performance based on given indicators During the year , the Company s net turnover was at `1,826 crores as against `1,889 crores in the previous year. The profit before interest, depreciation and tax in was ` 156 crores as compared to ` 304 crores in The Company suffered a loss of ` 246 crores before tax in as compared to profit before tax of ` 95 crores in the year

9 The financial performance of the Company during the last three years was as follows: Particulars Gross Income Profit Before Tax (246) Profit After Tax (172) Return on Networth % 7.94% 7.82% Earnings per share (in `) (19.67) Export performance and net foreign exchange collaborations Export comprises 4% of the total revenue. The Company has been awarded 5-star export house status. Earnings in foreign exchange amounted to ` 92 crores in as compared to ` 52 crores in Foreign investments or collaborators, if any. The current foreign holding in the share capital of the Company is as under: Ironwood Investment Holdings % of paid-up share capital, 7 Recognition or awards QUALITY CERTIFICATIONS: ISO22000 Certified for food and safety ISO14000/18000 Certified for delivering as per global benchmarks ISO9001:2008 Certified for ensuring quality management standard system Ranked by Business Standard at 299th (among 1,000 top-listed corporate) in terms of revenue, 265th by operating profit quantum and 253rd by net profit quantum in II. Information about the appointee 1. Shri Rakesh Kumar Sharma 1. Background details Shri Rakesh Kumar Sharma, 61, is an Executive Director of the Company. Prior to joining HNG, he held a senior position in Larsen & Toubro Limited. He has a demonstrated proven track record in General Management, EPC contracts and Business Development. He has an experience of 40 years in corporate sector in India and has acquired requisite experience in managing process industry and large-scale projects. He holds a graduate degree in Mechanical Engineering and has also earned a Masters degree in Marketing Management. 2. Past remuneration Financial Year Particulars Gross Income Salary 52,80,000 48,00, ,000 Perquisite & allowances 55,00,00 5,00,000 20,833 Commission, bonus 12,00, ,000 Other including retirals 3,96,000 3,60,000 30,000 Total 62,26,000 68,60,000 5,50, Job profile and his suitability Shri Rakesh Kumar Sharma, B.E (Mech.) also having Masters Degree in Marketing Management and having vast experience in Operations, Projects, Business Management related to Cement & Minerals, Iron & Steel and Power Industry, was appointed as Executive Director in the sixty fifth Annual General Meeting by the shareholders of the Company with effect from March 1, Keeping in mind his valuable contribution and in order to sustain continued momentum he is being re-appointed for a further period of 2 years w.e.f March 1, Remuneration proposed The remuneration proposed is the same as paid during the financial year Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person (in case of expatriates the relevant details would be with respect to the country of his origin). For the responsibility shouldered by Shri Rakesh Kumar Sharma, Executive Director of the Company in driving the Company s growth plans, the remuneration paid to him is commensurate and compares favourably with the compensations paid to the business heads of like sized and similarly positioned businesses. 6. Pecuniary relationship directly or indirectly with the Company, or relationship with the managerial personnel, if any. Nil.

10 2. Shri Sanjay Somany 1. Background details Shri Sanjay Somany, 55, is the Vice Chairman & Managing Director of the Company and Ex- Managing Director of Glass Equipment (India) Limited, a subsidiary of HNG. Having gained more than three decades of experience in Glass industry, Shri Somany has led the evolution of HNG to the forefronts of technological excellence. He presently oversees the operations and management of the Company. A Commerce Graduate, Shri Somany, also holds a diploma in diesel engineering. Previously, he has also held a host of notable positions in Industry bodies, such as the President of All India Glass Manufacturers Federation. 2. Past remuneration Financial Year Particulars Salary 2,59,69,000 2,61,87,000 1,88,90,400 Perquisite and allowances 16,67,496 15,58,750 5,22,554 Commission, bonus - 1,87,05,000 1,28,94,000 Other including retirals 24,01,200 22,44,600 15,47,280 Total 30,037,696 4,86,95,350 3,38,54,234 Note 1. Gratuity is payable per applicable provisions of Payment of Gratuity Act, Proposed annual increment be restricted to 15% of the last drawn salary. 3. Job profile and his suitability Shri Sanjay Somany was appointed as the Managing Director for a period of five years with effect from October 1, 2005 by the Shareholders in their 59th Annual General Meeting. He played a crucial role in consolidating Company s position as a leading player in container glass manufacturing industry. Therefore, in 2011 he was re-appointed as Vice Chairman & Managing Director of the Company. Keeping in mind his valuable contribution and in order to sustain continued momentum the following remuneration is proposed. 4. Remuneration proposed The remuneration proposed is the same as paid during the financial year Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person (in case of expatriates the relevant details would be with respect to the country of his origin). For the responsibility shouldered by Shri Sanjay Somany, Vice Chairman & Managing Director of the Company in driving the Company s growth plans, the remuneration paid to him is commensurate and compares favourably with the compensations paid to the business heads of like sized and similarly positioned businesses. 6. Pecuniary relationship directly or indirectly with the Company, or relationship with the managerial personnel, if any. Apart from receiving managerial remuneration he does not have any Pecuniary relationship with the Company. He is related to Shri Chandra Kumar Somany and Shri Mukul Somany. 3. Shri Mukul Somany 1. Background details Shri Mukul Somany, 48 years, is the Vice Chairman & Managing Director of the Company. A second-generation entrepreneur, he holds more than 26 years of experience in the glass industry. At HNG, he has been the driving force behind Company s acquisitions, marketing and branding strategies over the years. He also oversees the administration function in the Company. He holds a Bachelors of Commerce (Hons.) degree. In the past he had held reputed posts in the Industry federations, notably being the President of All India Glass Manufacturer s Federation (AIGMF), Executive Committee Member of Eastern Region Confederation of Indian Industry (CII) & Member of CII National Council. He was the Ex-Chairman, Eastern Region of CII and also a Member of the Bengal Rowing Club. 2. Past remuneration Financial Year Particulars Salary 2,59,69,000 2,61,87,000 1,88,90,400 Perquisite and allowances 16,67,496 15,58, ,554 Commission, bonus 1,87,05,000 1,28,94,000 Other including retirals 24,01,200 22,44,600 15,47,280 Total 3,00,37,696 4,86,95,350 3,38,54,234

11 Note 1. Gratuity is payable per applicable provisions of Payment of Gratuity Act, ) Proposed annual increment be restricted to 15% of the last drawn salary. 3. Job profile and his suitability Shri Mukul Somany was appointed as the Managing Director for a period of five years with effect from October 1, 2005 by the Shareholders in their 59th Annual General Meeting. He played a crucial role in consolidating Company s position as a leading player in container glass manufacturing industry. Therefore, in 2011 he was re-appointed as Vice Chairman & Managing Director of the Company. Keeping in mind his valuable contribution and in order to sustain continued momentum the following remuneration is proposed. 4. Remuneration proposed The remuneration proposed is the same as paid during the financial year Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person (in case of expatriates the relevant details would be with respect to the country of his origin). For the responsibility shouldered by Shri Mukul Somany, Vice Chairman & Managing Director of the Company in driving the Company s growth plans, the remuneration paid to him is commensurate and compares favourably with the compensations paid to the business heads of like sized and similarly positioned businesses. 6. Pecuniary relationship directly or indirectly with the Company, or relationship with the managerial personnel, if any. IV. materials respectively. The Company also started commercial production for two of its new plant of 650 TPD each, the brownfield expansion at Nashik during the month of June 2012 and greenfield expansion at Naidupeta in September 2012, which has resulted in higher depreciation and interest cost dampening the bottom-line further. Please note that the new furnaces take time to ramp up in terms of production and therefore the new capital expenditure will start bearing fullest fruits in 12 to 18 months of furnace firing. 2. Steps taken or proposed to be taken for improvement The 2 new furnaces are being gradually ramped up by addressing the technical issue of new furnaces. Besides, the major cost for the glass industry is power and fuel, HNG is taking lot of initiatives in this front which will result in significant reduction of power and fuel cost. The following are some of the major initiatives in power and fuel Migration to high tension lines Sourcing of power from Indian Energy Exchange Entering in Bilateral contracts for power Load factor optimization Also the Company is actively involved to create source of raw materials near its plant to save on the freight cost. 3. Expected increase in productivity and profits in measurable terms. All the above initiatives as mentioned above related to power and fuel will lead to an annual savings of more than ` 400cr. Disclosures The remuneration package of the managerial personnel has been provided in the Notice and also in the Corporate Governance Report. III. Apart from receiving managerial remuneration he does not have any Pecuniary relationship with the Company. He is related to Shri Shri Chandra Kumar Somany and Shri Sanjay Somany. Other Information 1. Reasons for loss or inadequate profits The profitability for the year has been impacted mainly due to rising power and fuel and raw materials cost. The cost per MT in half year has increased by 24% and 18% for power & fuel and raw By Order of the Board of Directors For Hindusthan National Glass & Industries Limited Registered Office: 2, Red Cross Place Kolkata Date: August 9, 2013 (Ajay Kumar Rai) Company Secretary

12 Annexure to the Notice Details of the Directors retiring by rotation seeking re-election at this Annual General Meeting Particulars Shri Ratna Kumar Daga Shri Chandra Kumar Somany Date of Birth & Age August 19, 1939 June 25, years 80 years Appointed on November 25, 1997 April 1, 1970 Expertise in specific He has considerable knowledge He holds F.B.I.M. (London) degree & functional areas in the field of engineering and a degree in Glass Plant Instrumentation finance. He is a Post Graduate in Business Management from the U.K. from Honeywell Brown, Minneapolis, U.S.A. Directorship held in 1. Somany Ceramics Ltd. 1. Glass Equipment (India) Ltd. other public companies 2. SR Continental Ltd. 2. Spotlight Vanijya Ltd. 3. Somany Foam Ltd. 4. HNG Cement Ltd. 5. HNG Power Ltd. 6. Mould Equipment Ltd. 7. All India Glass Manufacturer s Federation 8. CAPEXIL Memberships/Chairman-ships Audit Committee of Audit and Investor Grievances 1. Somany Ceramics Ltd. Committee across 2. Hindusthan National Glass & public companies. Industries Ltd. NIL Investor Grievances Committee 1. Hindusthan National Glass & Industries Ltd. Shareholding NIL 2,666,620

13 HINDUSTHAN NATIONAL GLASS & INDUSTRIES LIMITED Registered Office: 2 Red Cross Place Kolkata BANK ACCOUNT PARTICULARS / ECS MANDATE FORM I/We do hereby authorise Hindusthan National Glass & Industries Limited to: * Print the following details on my/our dividend warrant. * Credit my/our dividend amount directly to my/our Bank Account by ECS. My/Our Folio No DP ID No Client ID No Particulars of Bank Account: 1. Name of the Bank : Branch Name & Address : Account Number (As appearing on the cheque book) : Account type (Saving/Current/Cash Credit) : Digit Code Number of the Bank and branch appearing on the MICR Cheque issued by the Bank : STD Code & Telephone Number : I/We hereby declare that the particulars given above are correct and complete. If any transaction is delayed or not effected at all for reasons of incompleteness or incorrectness of information supplied as above, the Company/Registrar will not be held responsible. I agree to avail the ECS facility provided by RBI, as and when implemented by RBI/Company. I/We further undertake to inform the Company of any change in my Bank/branch and account number. I/We shall not hold the bank responsible if the ECS could not be implemented or the Bank discoutinue(s) the ECS, for any reason. Date: Signature of the First Shareholder/Joint Shareholders Please attach a photocopy of a cheque for verifying the accuracy of the MICR Code Number. Whenever the shares in the given folio are entirely dematerialized, then this ECS mandate from will stand rescinded. Send To: " M/S Maheshwari Datamatics Pvt. Ltd. 6, Mangoe Lane, 2nd Floor, Kolkata Tel. (033) /5209, Fax: (033)

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15 HINDUSTHAN NATIONAL GLASS & INDUSTRIES LIMITED Registered Office: 2 Red Cross Place Kolkata PROXY FORM I/We resident of being a member(s) of Hindusthan National Glass & Industries Limited, hereby appoint resident of failing him/her resident of as my/our Proxy to vote for me/us on my/our behalf at the 67th Annual General Meeting of the Company to be held on Friday, September 27, 2013 at A.M. at CII - Suresh Neotia Centre of Excellence for Leadership, DC-36, Sector-I, Salt Lake City, Behind City Centre, Kolkata and at any adjournment thereof. Signed this day of , 2013 Signature Folio No.: DP ID/Client ID: No. of Shares: Affix Revenue Stamp Note: The Proxy Form must be returned not less than FORTY EIGHT HOURS before the time for holding the aforesaid meeting so as to reach the Registered Office of the Company at 2, Red Cross Place, Kolkata " HINDUSTHAN NATIONAL GLASS & INDUSTRIES LIMITED Registered Office: 2 Red Cross Place Kolkata ATTENDANCE SLIP Name of the attending Member / Proxy: Memberʼs Folio No./Client ID/DP ID: Fatherʼs/Husbandʼs Name: Complete Address: No. of shares held: I hereby record my presence at the 67th Annual General Meeting of the Company held on Friday, September 27, 2013 at A.M. at CII - Suresh Neotia Centre of Excellence for Leadership, DC-36, Sector-I, Salt Lake City, Behind City Centre, Kolkata " Memberʼs/Proxyʼs Signature PLEASE BRING THIS ATTENDANCE SLIP TO THE MEETING AND HAND OVER AT THE ENTRANCE DULY FILLED IN

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17 HINDUSTHAN NATIONAL GLASS & INDUSTRIES LIMITED 67 th ANNUAL REPORT

18 Forward looking statements In this Annual Report, we have disclosed forward looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements written and oral that we periodically make, contain forward looking statements that set out anticipated results based on the management s plans and assumptions. We have tried wherever possible to identify such statements by using words such as anticipates, estimates, expects, projects, intends, plans, believes, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward looking statements will be realised, although we believe that we have been prudent in assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward looking statements, whether as a result of new information, future events or otherwise. CONTENTS 02 Vision 03 We are HNG 06 Glass for the Green Cause 10 Innovative Glass 12 Chairmanʼs Overview 14 VC & MDʼs Review 16 Deal with Trakya Cam 18 Corporate Social Responsibility (CSR) 20 Profile of Board of Directors Statutory Reporting 24 Management Discussion and analysis 32 Directorʼs Report 42 Report on Corporate Governance Financial Section 55 Standalone Accounts 96 Consolidated Accounts

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20 To create a world-class glass manufacturing plant that pursues Quality, Cost Reduction and Productivity Improvement in a truly holistic manner leading to Customers, Shareholders, Employees and Suppliers Satisfaction. This integrated effort will result in the Company becoming an industry benchmark and a role model for systems, processes and results. VC & MD s Review We are HNG Glass for the Green Cause Chairman s Overview Vision 2 Annual Report

21 KEY FACTS HNG was incorporated in 1946 by the Somany family who are the pioneers of the Indian glass manufacturing industry for the last six decades. Largest container glass manufacturer in India with dominant market share Eight manufacturing units with an operational capacity of 13 furnaces and 58 production lines with fully-automated IS machines Sales of ` 1,878 crore Overseas presence with a plant in Germany Listed on Bombay Stock Exchange (stock code: ), National Stock Exchange (stock code: HINDNATGLS) and Calcutta Stock Exchange (stock code: ) MANAGEMENT HNG has transformed steadily from a family-owned business to a professional organization in the last six decades. The Company s leadership team comprises of highly motivated and experienced professionals, led by Shri Chandra Kumar Somany, Chairman and ably backed by Shri Sanjay Somany and Shri Mukul Somany, the Vice Chairmen and Managing Directors of the Company. WE ARE HNG Trakya Cam CSR GROUP STRUCTURE Hindusthan National Glass & Industries Ltd. Directors Statutory Reporting Glass Equipment (India) Ltd. (100%) Capital Goods & Spares Supplier to Glass Industry Quality Minerals Ltd.(99.7%) Mineral Supplier to Glass Industry HNG Global GmbH (100%) Container Glass Plant in Germany HNG Float Glass Ltd. (18.3%) Manufacturer of Float & Processed Glass Financial Section 3 Annual Report

22 PAN-INDIA PRESENCE Vision GEIL Float Glass Unit Container Glass Plant Locations Marketing Offices NEEMRANA RISHIKESH BAHADURGARH DELHI We are HNG Glass for the Green Cause Plant Capacity (TPD) Rishra 860 Bahadurgarh 840 Virbhadra 460 Puducherry 330 Nashik 980 Neemrana 180 Naidupeta 650 Total 4300 MUMBAI VADODARA NASHIK BENGALURU CHENNAI HYDERABAD NAIDUPETA PUDUCHERRY RISHRA KEY CLIENTS Chairman s Overview LIQUOR BEER FOOD VC & MD s Review SOFT DRINKS PHARMACEUTICALS 4 Annual Report

23 A HISTORY OF SUSTAINED CAPACITY BUILD-UP In the last decade, the Company has increased its capacities by more than four times through organic and inorganic expansion. Trakya Cam 1952 Commissioned its first glass container plant of 30 TPD 1964 Commissioned second plant of 45 TPD Installed capacity stood at 1100 TPD Acquired 320 TPD loss making glass division from Larsen & Toubro at Nashik Acquired two plants (Rishikesh & Puducherry with total capacity 700 TPD) from Owens Brockway India Ltd, a subsidiary of Owens Illinois, USA. Company renamed to Ace Glass Containers Ltd. CSR Forayed into Float glass with commissioning of float glass plant in Halol under HNG Float Glass Ltd. Acquired 180 TPD Neemrana unit of Haryana Sheet Glass Commissioned 650 TPD furnace each at Nashik and Naidupeta respectively. Nashik was commissioned at the end of Q1 and Naidupeta was commissioned at the end of Q2 of FY Merged Ace Glass Containers with HNG Expanded manufacturing presence to overseas markets, through its first acquisition in Germany Acquired assets of Agenda Glas AG having a 320 TPD facility at Gardelegen, Germany Directors Statutory Reporting QUALITY CERTIFICATIONS ISO certified for food and safety ISO 14000/18000 certified for delivering as per global benchmarks ISO 9001:2008 certified for ensuring quality management standard system Financial Section 5 Annual Report

24 Vision The benefits of glass packaging are clear: it s sustainable, it s virtually inert, it s 100% recyclable, it s safe to store food and drinks in... and it s beautiful. VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG

25 Glass for the Green Cause Trakya Cam For over 40 years the international glass packaging industry has been waging a war against the onslaught of plastics. At first it was seemed that it would be a losing war. Plastics, after all are lighter, less brittle and cheaper than glass and certainly well-suited for packaging many kinds of products better than conventional natural materials than glass, wood or metal. In the early days many experts opined that the use of glass would eventually be restricted to premium products where the look and feel of glass cannot be matched. However, as the years have unfolded this has not quite come to pass. Not only has glass survived the plastic assault, in recent years it has even been reclaiming lost ground. Glass comes from nature Glass is made from natural raw materials: sand, soda ash and limestone. Unlike oil, these are abundant in nature, making production of glass sustainable. Glass therefore prevents exploitation of fossil fuels. While it is true that glass production needs energy to melt the raw materials (or to recycle broken glass), this does not necessarily mean burning fossil fuels such as oil. In fact for most of the 2500 years of glassmaking use of fossil fuels as an energy source is very recent. Going forward it is possible to avoid burning fossil fuels altogether by switching to renewable or low carbon energy sources. Glass can be reused A glass bottle adequately designed, unless it gets chipped or cracked, can be easily washed and reused without any negative hygienic or aesthetic repercussions. Reusing glass bottles reduces overall impact on the environment, including energy use and CO 2 emissions, multiplying the sustainable value of glass. According to the FEVE (European Glass Federation) Life Cycle Assessment (LCA) about 7% of all glass bottles are reused up to 40 times. The ability to reuse over and over again to such a high degree puts glass into a league of its own for reusable sales packaging. Glass is recyclable Glass is fully and infinitely recyclable in a closed loop system, wherein it can be used over and over again without loss of quality. Today more than 67% of glass bottles and jars or about 11 million tonnes -- are collected for recycling in the European Union. Over 80 per cent of these are actually recycled by European glassmakers to make new bottles and jars. In comparison plastic bottles are not recycled into plastic bottles but downcycled into something much poorer in quality. Every time you buy a product packaged in a plastic container, it s fresh plastic. Which means new resources went into making it, raising energy consumption markedly. A study estimates that every ton of glass recycled saves 322 kwh of energy, 246 kg of CO 2 and 1.2 tonnes of virgin raw material Glass is inert Another key reason why glass is winning back its popularity is its chemical inertness, which enables it to maintain the purity of the packaged material. In fact, glass is the only packaging medium which is regarded as safe by the U.S. Food and Drug Association. The inert quality of glass makes it the safest packaging material in terms of protecting against potential migration of toxic substances into food and drinks. It should also be noted that toxicity is a major concern not only in case the packaging material comes in contact with food but also at the disposal phase when it can leach into the ground or water. CSR Directors Statutory Reporting Financial Section 7 Annual Report

26 Vision We are HNG Glass preserves taste A generation of customers has also discovered that any food item tastes better or more original in a glass bottle. A study by the University of Oklahoma revealed that most health conscious shoppers believe glass packaging keeps the true flavor, taste and purity of a food product. Other researchers confirm the trend towards glass packaging as the first choice of consumers who say they care about the environment and health. Whichever way you look at it, glass is greener and fresher. The (LCA) study shows increased cullet helps reducing energy emissions, conserve raw materials, extend the life of glass manufacturing furnaces, and save energy. Glass Packaging Institute, USA Glass has nothing to hide Contrary to other packaging materials, no additional plastic lining (whose composition may be unknown) is needed between the food or beverage contents and the packaging to avoid corrosion or migration. Glass has no added lining and it has nothing to hide. The non-toxicity of glass for human beings, its longer shelf-life, and its exceptional taste preservation properties are all major qualities of glass that are not measurable. These are, however, crucial elements to be taken into account when choosing an appropriate packaging material LCA study confirms positive impact of glass packaging and recycling Glass for the Green Cause Chairman s Overview VC & MD s Review Recycling is estimated to create nearly five times as many jobs as landfilling, Recycling one glass bottle saves enough energy to power a 60-watt bulb for four hours, a computer for 30 minutes or a television for 20 minutes. Glass Packaging Institute RECYCLE BOTTLES US EPA, HIGHLIGHT The recently conducted LCA study by AIGMF proves that glass is the most sustainable packaging material. Glass Packaging Institute, U.S.A in it s LCA Study states that glass containers are a good environmental choice for packaging foods and beverages. The European Container Glass Federation clearly states that Food and drinks packed in glass will always retain their original taste and smell. HNG has successfully reduced carbon emissions by reducing the weight of bottles. Lighter bottles consume less molten glass and hence save fuel and carbon emissions. During FY , HNG saved 2095 MT of CO 2 emissions by reducing the weight of some SKU s by 7%. 8 Annual Report

27 THE WAY THE WORLD SEES IT Perception of Consumers: A FEVE Survey 74% would recommend glass as a better packaging material to friends and family. 47% believe that glass packaging is the most environment friendly packaging medium. 87% feel that Glass Packaging is the most Recyclable packaging medium. 54% feels that Glass Packaging preserves the taste of its contents better as compared to other packaging mediums. Perception of Consumers: An O-I (Owens- Illinois) Initiative 85% of Americans agree that things taste better in glass packaging 81% Americas say that glass containers are most appealing among all packaging mediums 76% say that beverage products packed in glass bottles are of higher quality. 1 in every 3 people say that they would buy their favourite food and drinks if they were available in glass packaging 65% Europeans say that glass is best for preserving taste 90% people in Europe say that glass is the healthiest packaging material Market Survey of Glass Packaging Preference in India Study by AC Nielsen 79% in Rural India and 84% in Urban India feel keeping/storing any kind of product in glass packaging is most hygienic. 70% in Rural India and 76% in Urban India feel food products kept in glass packaging stay fresh for long than other packaging. 83% of the total sample surveyed has mentioned that, they will prefer glass packaging if made user friendly in terms of ease of handling. Moving back to Glass A number of countries have moved to ban plastics in packaging alcoholic beverages and many others are contemplating the ban. Plastic liquor bottles were banned in Bulgaria as far back as South Africa s Alcoholic Drinks Control Act, 2010 only allows sale of spirits in glass bottles. Turkey banned plastic-based packaging for most alcoholic drinks in In recent years, several countries including France have banned the use of BPA, which is commonly used in all hard plastic bottles. Canada is likely to follow. Russia may go a step further with a proposed ban on beer bottles. In India, Himachal Pradesh has been the first to ban selling to liquor in plastic bottles in Trakya Cam CSR Directors Statutory Reporting Financial Section 9 Annual Report

28 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision

29 Innovations in Glass Trakya Cam Innovations by the glass industry essentially focus on reducing weight (without losing strength), reducing input resources and energy and enhancing aesthetics and utility. CSR Internally embossed wine bottles are strikingly different and offer wine makers the chance to reveal a unique point of difference. Directors These Vortex beer bottles are lighter in nature and the grooves inside the neck create a vortex as beer is poured thereby increasing the turbulence in beer making it fizzier. VesarFlow jars introduced in the USA have an innovative head which channelizes the flow thereby making it easier to pour and reducing the wastage. Statutory Reporting The new twist to open concept combines an ergonomically-designed cork stopper and a glass bottle with an internal thread finish in the neck for sophisticated wine packaging. Financial Section 11 Annual Report

30 Glass for the Green Cause We are HNG Vision Chairman s Overview A LONG TERM PERSPECTIVE VC & MD s Review The year marks sixty years of HNG s manufacturing operations. It was in 1952 that our first plant at Rishra rolled out the first bottle, which it continues to do even today. It has been an eventful six decades during which India and the world has changed dramatically. So has the way of running business. Some things however remain the same and among the most enduring paradigms is the cyclical nature of the economy and industry. In the last twenty years alone businesses in India have faced several roller-coaster ups and downs, starting with the liberalization of the early nineties when the proverbial Hindu Rate of Growth broke the shackles and crossed 7% ( ). It then averaged below 5% ( ), skyrocketed past 9% ( ) before falling again in the last two years. And every swing of revival and retreat has seen accompanying moods of hope and fear. It is well known that for the Indian industrial economy FY has been one of the worst in recent memory with high inflation and interest rates coupled with sluggish growth. Through most of the year indices 12 Annual Report

31 of industrial growth remained flat, or even negative, as demand stalled and costs spiraled. In particular companies that had bet on the Indian Growth Story during the last decade found themselves badly hit as capex commitments and expanded capacities raised costs without commensurate revenue due to weak demand. Many companies were forced to find ways of cutting expenses and since one company s expense is another company s income this had a domino effect. By Q4, with burgeoning deficits, falling rupee and a government mired in policy paralysis, the entire India Growth Story was being held in doubt by the skeptics. However, as the decades have shown, both the optimism and pessimism tend to be overdone. If we take the entire time horizon since 1991, the average Indian today earns nearly 4 times more than two decades ago in real terms. The difference is even more marked in the middle class and above. For example, there are almost 20 times as many cars on the road today as compared to Most consumer industries have been averaging double digit growth despite slowdown in other sectors and even at 5% India is growing faster than most other countries. If issues of policy and implementation can be sorted out I have no doubt that a decadal growth average of 7%+ will be maintained through the 2010s. In my view, for established companies and market leaders like HNG, what matters is not the booms and blips of short economic cycles but the ability to build enduring assets that can best leverage decadal trends. In this regard I believe we are well placed to take on a buoyant future as well as withstand the intermittent dips. We are one of the few companies internationally to have an in-depth understanding of glass making. We are also the market leaders in India with an enviable reputation for quality. We have aligned our production to the Indian Growth Story by nearly quadrupling our capacities since At the same time we have continued to deliver highest standards of quality products to our clients through consistent investments in world-class equipment and deeprooted culture of quality. Our cost structures have been fine-tuned by our constant efforts to go beyond the established norms and ensure maximum utilization on resources. These factors have translated into an ability to offer quality products at competitive prices, which has enabled us to win customer confidence. Apart from being an opportunity for improving business efficiencies, adverse situations also bring about a need to introspect and look at business plans without the tints of rosy optimism. A result of this introspection has been our decision to divest our majority stake in HNG Float Glass Limited in favour of a strategic international partner, Trakya Cam Sanayii A.Ş. The partnership brings in strong technological knowhow for value-added float glass and automotive grade glass segments, both of which have considerable growth potential in India. Further, in the automobile glass the entry of Trakya Cam into the Indian market will open up significant opportunities in OEM markets on account of their global reputation and tie-ups. International management skills and global industry expertise can also be expected to positively impact efficiencies. Trakya Cam s technical, financial and manpower strengths, coupled with HNG s strength in India s glass industry are sure to result in much better and deeper inroads in the markets going forward. Before I conclude I would like to touch upon another long term aspect that businesses today need to take cognizance of. These are issues that pertain to the environment and society at large which are becoming essential for sustainable growth. Increasingly and globally there is pressure to ensure that production and consumption do not cause long term damage to environment and communities. We are proud to manufacture an eco-friendly, recyclable product that has no substitute in many packaging applications. Internationally, the trend today is in favour of a greener future. At home, we are also proud to play an active role in the betterment of environments and societies around our manufacturing units. We recognize that sustainable development is the only way forwards and that our business has prospered and will continue to prosper because we work in harmony with the future. Chandra Kumar Somany Chairman Trakya Cam CSR Directors Statutory Reporting Financial Section 13 Annual Report

32 Chairman s Overview Glass for the Green Cause We are HNG Vision LEADING THE WAY Shri Sanjay Somany and Shri Mukul Somany Vice Chairmen & Managing Directors VC & MD s Review Globally, interest in glass for packaging has been seeing a revival both due to its inherent properties in preserving taste and purity as well as its eco friendly nature (See story Glass for the Green Cause pp. 7). Some major countries are in the process of imposing bans of plastic in Food & Beverage packaging giving a fillip to future glass demand. New technologies and innovations in glass making are also making it possible to produce lighter glass, thereby reducing its effective cost. All this has improved the prospects for the glass industry even as the global economy struggles to grow. In India another major factor has been contributing to the optimistic outlook for container glass the steady growth of consumption by the middle and upper classes who are the main buyers of foods, beverages, cosmetics and pharmaceutical products that are usually packaged in glass. All the above 14 Annual Report

33 sectors have been witnessing double digit growth through the last decade and are expected to do so even in coming years although there were some blips seen in FY13 when the Liquor segment, to which we largely cater, grew in low single digits. However India offers very high scope of growth as the per capita consumption of glass bottles in India is only about 1.4 bottles which, compared to its neighbouring countries like South Korea (89), Japan (10.2) and China (5.9), is extremely low. With the both international and national trends converging to assure long term growth, we at HNG have been consciously pursuing expansion plans on several fronts in our bid to stay ahead of the curve and develop capacities close to the markets. In this context, we are glad to state that our ambitious greenfield Naidupeta plant -- South East Asia's Largest Glass Manufacturing Complex started commercial production in September 2012 adding another 650 TPD to our capacity during this financial year. Earlier in the year we also expanded our capacity at Nashik by commissioning of one of the world s largest container glass furnaces in a 650 TPD brownfield project to add further add muscle in the western states. This is a vital step in view of the fact that western and southern India account for over 60% share in production of alcoholic beverages in India. Naidupeta will enable us to offer bigger volumes at lower logistic costs to sharpen our competitive edge. As reported last year we have also forayed into international markets, acquiring a 320 TPD state-ofthe-art glass container plant, Agenda Glass AG, in Gardelegen, Germany in The process of integration was completed in the current year giving us a firm global foothold and enabling faster access to advanced technologies. The financial performance of the formerly loss-making company has since improved significantly a testimony to HNG s domain expertise and management skills. A major highlight of the current year has been the partial sale of our stake in HNG Float Glass Limited (HNGFL) to Trakya Cam Sanayii A.Ş., a Sisecam group company, which ranks fourth in Europe and sixth globally in the float glass industry. Post the deal HNG's shareholding in HNGFL has come down from about ~ 47% to ~18%, although the HNG Group as a whole continues to hold 50% stake in the joint venture to retain a role in the management. The deal not only brings precious technology, markets and resources to HNGFL, it has also vastly improves our cash flow position. Capacity expansions have been accompanied by technology upgrades to ensure that HNG continues to maintain international quality and even set global benchmarks. The Company has invested to put two new state-of-the-art facilities with technology and equipment imported from some of the very reputed capital good suppliers. The new furnaces are equipped to manufacture products of international standards thus setting a benchmark for global container glass manufacturers. Control of raw materials is another critical component of the production process to ensure the right quality, quantity and cost. We have already obtained a mining license for the Karoli mines in Rajasthan to supply silica, the principal raw material for glass manufacturing, to our Northern plants. Similarly HNG has taken significant measures in power and fuel front to reduce its rising energy cost: procuring power from energy exchanges (IEX), entering into bilateral agreement with power producers, installing high tension lines to reduce the cost per unit of electricity, etc. In the coming quarters we expect the result of our initiatives will start bearing fruit along with other production efficiencies. Coupled with our growing marketing strength in India and abroad this should see HNG sustain and grow operating margins in the coming years. Trakya Cam CSR Directors Statutory Reporting Financial Section 15 Annual Report

34 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision

35 HNG Float Glass Limited, enters an equal joint venture partnership with Trakya Cam Sanayii A.Ş. Trakya Cam On January 10, 2013, the HNG Group entered into an agreement to restructure the shareholding of HNGIL subsidiary, HNG Float Glass Ltd. (HNGFL), to establish an equal joint venture partnership with Trakya Cam Sanayii A.Ş., one of the world s largest float glass companies, for jointly pursuing the float glass business in India. Established in 2007, HNG Float Glass has emerged as one of the leading float glass manufacturing companies in India, particularly in the key western markets. The Company was set up by the HNG Group to expand its presence in the glass industry and gain a foothold in the fast-growing real estate and automobile markets. However, the complex nature of float glass technology and markets, which is dominated by global giants, made it prudent to bring in commensurate knowhow to stay competitive. With this objective HNG Group entered into Joint Venture partnership, on June 11, 2013, with Trakya Cam Sanayii A.Ş. of Turkey, one of the largest glassmakers of the world. As a result of the transaction, the HNG Group s stake in HNGFL was reduced from ~88% to 50%, mainly by divesting a major part of Hindusthan National Glass & Industries Limited s shareholding, which came down from ~47% to ~18%. Trakya Cam Sanayii A.Ş. also acquired 12.36% stake from IFC Washington's to raise its holding to 50% and become an equal joint venture partner. Apart from buying its 50% stake, Trakya has also invested ` 150 crores in the form of primary infusion in HNGFL. For HNGIL, the divestment fetched ` 135 cr. resulting in a gain of ` 76 cr. Founded in 1978 and headquartered in Istanbul, Turkey. Trakya Cam Sanayii A.Ş. is a subsidiary of Türkiye Şişe ve Cam Fabrikaları A.Ş., popularly known as the Şişecam Group. With a capacity of 1.85 MTA of float glass and annual turnover of about USD 700 million, it currently ranks fourth in Europe and sixth globally in the flat glass industry. Traded in the Istanbul Stock Exchange (Borsa Istanbul), Trakya Cam s market cap, as on January 2013, exceeded USD 1 Billion. Together with its subsidiaries, Trakya Cam is engaged in the production and sale of glass products, covering both basic glass and other glass segments. The Company s basic glass products include flat glass, patterned glass, mirror, laminated glass, coated glass and glass for architectural applications. It also offers automotive glass, solar glass and glass for home appliances. The Company sells its products to various sectors comprising construction, automotive, energy, home appliances, furniture and agriculture. Türkiye Şişe ve Cam Fabrikaları A.Ş. (Şişecam), the holding company of Trakya Cam with 70% shares, is also a Turkey-based Company with a market cap of ~USD 2.5 billion. The Group has led the renowned Turkish glass industry for well over 75 years and is founded by Isbank, one of the largest banks of Turkey. In addition to float glass, the Group has interests in glassware (home articles and souvenirs), glass containers and allied chemicals such as soda ash and chromium chemicals. Besides Turkey, it operates in Germany, Russia, Slovakia, Hungary, Romania, Bulgaria, Egypt, Georgia, Bosnia-Herzegovina, Ukraine and Italy. Its tableware glass is popularly sold worldwide under the brand name Paşabahçe. It exports to about 150 countries with Europe and Russia as its main markets. CSR Directors Statutory Reporting Financial Section 17 Annual Report

36 Glass for the Green Cause Chairman s Overview VC & MD s Review We are HNG Vision At HNG, we believe that corporations create wealth for Society. As an organization we come together and work towards a common good, aligning our business goals towards achieving social and environmental objectives. This is done at several levels ranging from improving production processes to improving lives well beyond our plants boundary walls.

37 A Socially Responsible Corporation Trakya Cam Eco-friendly production We seek to ensure that glass production is at leastcost to the environment, society and workers. All units have requisite environmental clearances, quality certifications and established safety protocols. For many years we have been investing in energy efficient technology and equipment, streamlining processes and monitoring energy savings. A notable achievement has been substitution of furnace oil with natural gas. Controlling emissions through suitable anti-pollution technology is another aspect of green production. Finally, our dedicated efforts in cullet (broken glass) collection help conserve raw materials through recycling. Water Conservation Many parts of India and the world -- lack water. HNG has taken proactive initiatives across units to conserve water such as installation of water harvesting and conservation systems backed by real time monitoring on water consumption. Ensuring widespread awareness for responsible usage of water across the units has also helped cut down on water consumption. Worker s Safety In a production process involving glass and molten metal workers safety is of paramount concern. HNG takes a number of steps to ensure work-floor safety procedures across the units ranging from advocacy posters to incident analysis. We impart proactive and exhaustive training to employees across functions and units on the importance of safety; undertake regular surveillance checks for major processes involving equipment, processes and safety gear; conduct safety audits across the units for improving processes further. A culture of transparency and ethics further ensures safety norms are not violated. Employee Welfare Employee welfare measures begin with creating a supportive work environment followed by regular training and development initiatives to enhance employee skills. Mentor-mentee programs ensure succession planning across roles, giving employees clear career goals. Feedback and guidance mechanisms boost employee performance and trust in management. Beyond the workplace, amenities like schools, hospitals, parks maintained by the company in the vicinity of units ensure better quality of lives for employees and their families. Model units Our plants have received several recognitions for their CSR activities For a larger community HNG is committed to promoting education, health infrastructure and employment in communities around its plants. To this end the company Funds and Manages Bal Bharti Public School in Bahadurgarh Plant, catering to more than students. The +2 level school is affiliated to CBSE Delhi Initiatives educational programs at various units Holds regular health check-up camps Supports medical facilities in the vicinity of the units Organizes and participates in tree plantation activities Promotes environmental responsibility through educational meets Runs an institutionalized glass cullet collection and supply program CSR Directors Statutory Reporting Financial Section 19 Annual Report

38 PROFILE OF BOARD OF DIRECTORS Vision We are HNG Glass for the Green Cause Shri Chandra Kumar Somany Shri Chandra Kumar Somany, aged 80 years, is the Chairman of the Company. A renowned technocrat having in-depth experience in glass technology, Shri Somany has been the driving force behind the Company s performance over the years. At HNG, he plays a key role in forming and proving policy guidelines for the management and administration of the Company. He holds F.B.I.M (London) degree and a degree in Glass Plant Instrumentation from Honeywell Brown, Minneapolis, U.S.A. He has held reputed positions in his long and illustrious association with the Indian Glass Industry, such as the President of All India Glass Manufacturers' Association, Bengal Glass Manufacturers' Association and several other commercial and non-commercial organizations. He also served as the Chairman of the Development Panel for Glass Industry formed by the Government of India, Ministry of Industry during Shri Somany is associated with various charitable and philanthropic organizations and also oversees the human initiatives at HNG. He was inducted into the Board in 1970 and subsequently took over as Executive Director of the Company and thereafter as Managing Director, a post held by him up to September At present he is also the member of Special Committee in HNG. He holds 26,66,620 equity shares of the Company of face value of ` 2/- each. Directorships held in other companies Glass Equipment (India) Limited Niket Advisory & Trading Company LLP Spotlight Vanijya Limited HNG Cement Limited HNG Power Limited Brabourne Commerce Private Limited Mould Equipment Limited Somany Foam Limited Shri Sanjay Somany Chairman s Overview VC & MD s Review Shri Sanjay Somany, aged 55 years, is the Vice Chairman & Managing Director of the Company and Ex-Managing Director of Glass Equipment (India) Limited, a subsidiary of HNG. Having gained more than three decades of experience in glass industry, Shri Somany has led the evolution of HNG to the forefronts of technological excellence. He presently oversees the operations and management of the Company. A Commerce Graduate, Shri Somany, also holds a diploma in diesel engineering. Previously, he has also held a host of notable positions in industry bodies, such as the President of All India Glass Manufacturers' Federation. At HNG, Shri Somany is member in Treasury Management Committee, Shareholders/Investors Grievance Committee and Special Committee. He holds 36,05,500 equity shares of the Company at face value of ` 2/- each. Directorships held in other companies Glass Equipment (India) Limited Niket Advisory & Trading Company LLP Spotme Tracon Private Limited Spotlight Vanijya Limited Somany Foam Limited Khazana Marketing Private Limited AMCL Machinery Limited HNG Cement Limited HNG Power Limited HNG Float Glass Limited Brabourne Commerce Private Limited Mould Equipment Limited HNG Global GmbH 20 Annual Report

39 Shri Mukul Somany Shri Mukul Somany, aged 48 years, is the Vice Chairman & Managing Director of the Company. A second-generation entrepreneur, he holds more than 26 years of experience in the glass industry. At HNG, he has been the driving force behind Company s acquisitions, marketing and branding strategies over the years. He also oversees the administration function in the Company. He holds a Bachelors of Commerce (Hons.) degree. In the past he has held reputed posts in the industry federations, notably being the President of All India Glass Manufacturer's Federation (AIGMF), Executive Committee Member of Eastern Region Confederation of Indian Industry (CII) & Member of CII National Council. He was the Ex-Chairman, Eastern Region of CII and also a Member of the Bengal Rowing Club. At HNG, Shri Somany is a member in Treasury Management Committee, Shareholders/Investors Grievance Committee and Special Committee. He holds 41,42,045 equity shares of the Company at face value of ` 2/- each. Directorships held in other companies Glass Equipment (India) Limited Niket Advisory & Trading Company LLP AMCL Machinery Limited Rungamattee Trexim Private Limited Spotlight Vanijya Limited Somany Foam Limited Saurav Contractors Private Limited Brabourne Commerce Private Limited HNG Cement Limited HNG Power Limited HNG Float Glass Limited The Calcutta Stock Exchange Limited Mould Equipment Limited HNG Global GmbH Trakya Cam CSR Directors Shri Kishore Bhimani Shri Kishore Bhimani, aged 74 years, an illustrated journalist, is an Independent Director of the Company. He is associated with The Statesman as Senior Assistant Editor and has written exhaustively on sports, finance and the financial markets. Besides, he has also anchored various programmes on TV channels in India and abroad on cricket, foreign affairs and economics. A Graduate from the St. Xavier's College, Kolkata, Shri Bhimani also holds a B.Sc. (Econ) degree from the London School of Economics. He has also authored several books including the one on the Swedish collaboration of industries in India. Besides, Shri Bhimani is also connected with a number of NGOs dealing with environment and social causes. At HNG, he is the Chairman of the Company's Remuneration Committee and Shareholders/Investors Grievance Committee. Directorships held in other companies SKP Securities Limited Statutory Reporting Financial Section 21 Annual Report

40 PROFILE OF BOARD OF DIRECTORS VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision Shri Ratna Kumar Daga Shri Ratna Kumar Data, aged 72 years, is an Independent Director of the Company. He has vast experience in the field of engineering and finance. During his tenure as the Chairman of Indian Institute of Materials Management, Kolkata, the professional body made significant strides in its activities. Calcutta Junior Chamber was adjudged the best unit in India under his Presidentship. He then headed a three-member team to Sri Lanka to conduct leadership development courses. As a President of Federation of Small and Medium Industries (FOSMI), he led a business delegation comprising 15-member team to Singapore, Malaysia and Hong Kong. He holds a Post Graduate degree in Business Management from the UK. He is the Honorary Secretary of Satyanand Yoga Kendra (Kolkata branch) of Bihar School of Yoga. At HNG, Shri Daga is member in Audit Committee, Shareholders/Investors Grievance Committee and Remuneration Committee. Directorships held in other companies Somany Ceramics Limited S.R. Continental Limited Trutools (India) Private Limited LSI Financial Services Private Limited Shankar Estates Private Limited Goenka Leasing & Finance Private Limited Shri Dipankar Chatterji Shri Dipankar Chatterji, aged 65 years, is an Independent Director of the Company. He is a Chartered Accountant and the senior partner of the firm, L. B. Jha & Co. Chartered Accountants. He is also Former Chairman of the Confederation of Indian Industry (CII- eastern region) and is currently a Member of the National Council of CII. He was Member of the Central Council of the Institute of Chartered Accountants of India and the Chairman of the Audit Practices Committee of the ICAI. He was appointed as member of the Padmanabhan Committee (set up to review Reserve Bank of India's supervision over banks) and the committee set up to advice on NABARD's supervisory role over RRBs and Cooperative Banks, and other committees and task forces. He was the Former President of Indo American Chamber of Commerce (eastern region). At HNG, Shri Chatterji is member in Audit Committee, Shareholders/Investors Grievance Committee, Treasury Management Committee and Remuneration Committee. Directorships held in other companies West Bengal Industrial Development Corporation Limited Nicco Ventures Limited TRF Limited Viom Networks Limited Texmaco Infrastructure & Holdings Limited Span Air Private Limited Pantheon Data Services Private Limited Delphi Management Services Private Limited Obeetee Textiles Private Limited 22 Annual Report

41 Shri Sujit Bhattacharya Shri Sujit Bhattacharya, aged 69 years, is an Independent Director of the Company. He is also a Fellow Member of the Institute of Chartered Accountants of England and Wales and the Institute of Chartered Accountants of India. Prior to joining the Company's Board he was Senior Partner of Lovelock & Lewes, Chartered Accountants. He has served as an independent director on the board of several companies including as Special Director nominated by the Board for Industrial and Financial Reconstruction, Government of India. His professional experience includes association in an advisory capacity in the fields of accounting and auditing standards, corporate governance, investigations, business valuation and taxation with several leading national and multinational corporations engaged in diversified manufacturing and service activities. At HNG, Shri Bhattacharya is a member of Audit Committee. Trakya Cam CSR Directorships held in other companies NIL Directors Shri Rakesh Kumar Sharma Shri Rakesh Kumar Sharma, aged 61 years, is an Executive Director of the Company. Prior to joining HNG, he held a senior position in Larsen & Toubro Limited. He has a demonstrated proven track record in general management, EPC contracts and business development. He has an experience of 36 years in corporate sector in India and has acquired requisite experience in managing process industry and large-scale projects. He holds a graduate degree in Mechanical Engineering and has also earned a Masters Degree in Marketing Management. Directorships held in other companies AMCL Machinery Limited Raykal Aluminium Company Private Limited Kensun Iron and Steel Company Private Limited Statutory Reporting Financial Section 23 Annual Report

42 Glass for the Green Cause Chairman s Overview VC & MD s Review We are HNG Vision With turbulence marking both Indian and global economies in recent years, glass and its user industries have had to weather several storms. Worldwide, however, the container glass industry has shown remarkable resilience in meeting the challenges Annual Report

43 Trakya Cam MANAGEMENT DISCUSSION AND ANALYSIS CSR Glass is among humankind s oldest packaging materials. Chemically inert, mouldable, impermeable and non-toxic, it has enjoyed enduring popularity through millennia. Glass does not deteriorate, corrode, stain or fade, so products inside glass container remain fresh and pure. Further, the perception of glass containers as having a high quality or premium image compared to plastic and metal containers is also facilitating its growth. In today s environment conscious world, the fact that it is bio-degradable and recyclable is an added advantage. Despite the advent of plastics and other packaging material, glass continues to rule as it has no substitute in certain applications. Worldwide, as well as in India, it predominantly preferred for storing ready-to-drink beverages, foods, medicines, perfumes, etc. Wherever taste, flavor or purity needs to be maintained, the first and often only choice is glass. Directors Statutory Reporting Financial Section 25 Annual Report

44 Global Alcoholic Drinks Glass Packaging by Region and Growth Vision We are HNG % CAGR Asia Pacific Latin America Africa/Middle East Australasia Eastern Europe North America Western Europe % growth Note: bubble size represents 2012 unit volume, billion units Source : Euro Monitor Glass for the Green Cause Chairman s Overview VC & MD s Review Global Scenario Despite economic turmoil in many parts of the world, the global market for glass packaging continues to ride on the back of the brisk consumer demand. While traditional markets in Europe and America have been somewhat subdued, emerging markets have more than made up for any shortfall with the Asia Pacific region accounting for the fastest growth. Worldwide, the alcohol industry is the largest user of glass packaging, which accounts for as much as 76% of all packaging of global spirits. According to Euromonitor nearly 200 billion units of glass sold in alcoholic drinks in Much of the demand is for Indian Scenario The Indian Economy has been enjoying sustained growth for more than a decade, averaging of over 7% since Even during the 2008 global meltdown, the country had shown remarkable resilience. However, FY proved to be a subdued year as a variety of problems assailed the economy ranging from a poor monsoon to depreciating rupee to policy paralysis. The biggest factor undoubtedly was the old bugbear of inflation which started in the previous year beer bottles, which accounts for about two-thirds of total container glass consumption. Soft drinks such as colas are another major segment, accounting for nearly 60 billion units of glass packaging sold in A report published by Visiongain in December 2012 puts the size of the global glass packaging industry at $ 36.8 billion and predicts that this will nearly double over the next twenty years growing at an annual rate of 5.8%. Growing affluence, high disposable income, and increase in consumption of alcoholic beverages is expected to drive the glass packaging sector, particularly in developing markets. and remained stubbornly high throughout the financial year. As a result, interest rates remained forbidding, inhibiting credit and spending. The GDP growth plummeted to 5%, the worst in the last decade. Economic activity slowed to a point where the Index of Industrial Production (IIP) slipped repeatedly into negative terrain. The ripples of the slowdown spread across virtually all sectors Annual Report

45 GDP GROWTH Nor does there seem to be much light at the end of the tunnel. Although inflation has moderated somewhat, pressures such as the burgeoning Current Account Deficit and depreciating rupee has kept monetary policy tight and inflation high. Since late 2012, the Indian Government has made sporadic attempts to re-introduce economic reforms and reduce the fiscal deficit but the positives have mostly been swallowed by the deteriorating economy which has squeezed income at all levels. Also, while global commodity prices have eased improved growth prospects in the developed nations are likely to lead to firming up of commodity prices in the near future % % 9.3% % % 5.5% Trakya Cam CSR Industry Overview According to CRISIL Research, the Indian packaging industry attained a size of ` 850 billion in , growing at 14 per cent CAGR in the previous three years. This growth was primarily led by the FMCG and pharmaceutical segments, and is expected to continue, reaching ` 1300 billion Food & Beverages is the single largest buyer group accounting for half the packaging demand. Others 8% Non - alcoholic beverages 15% Pharma 27% Source: Crisil alcoholic beverages 50% Industrial Chemicals 9% Pharma 10% Other FMCG Products 10% Others 7% Beverages 14% Food Products 38% Source: Crisil Industrial Packaging 12% Glass packaging constitutes currently accounts for only about 8% of overall packaging demand. However it is one of the fastest growing segments due to its popularity in some of the fastest growing consumer sectors.at its current CAGR of over 16-17% it is expected to reach ` 104 billion by The beverages segment is the largest end-user of glass bottles, accounting for over two-thirds of total demand, with alcoholic beverages alone accounting for half. Directors Statutory Reporting Financial Section 27 Annual Report

46 Vision We are HNG By global standards the Indian container glass industry remains small at only a little over $1 billion despite rapid growth of user industries in recent years. As elsewhere, the Food & Beverage sector is its primary customer, accounting for as much as 85% of the demand. Except in the last year, when economic activity slowed significantly, the demand for glass containers has been enjoying double digit growth as part of the Great Indian Consumption Story. On the supply side, majority of production is controlled by top 3 players, with HNGIL as the leader. For the glass industry, India however differs from the global market in so far as the bulk of demand comes from distilleries and not breweries. While beer consumption in India has shown phenomenal growth in recent years, it remains low in absolute terms. In view of the changing trend in drinking habits, the gradual shift to beer in line with international averages therefore augers well for the industry. Pharmaceuticals, Soft Drinks and Food & Diary are other important segments. Although glass is a traditional product, In India it is in a strong growth phase as the economy grows steadily stronger. Overall, India has very low per capita consumption of glass containers at about 1.5 kg/year as compared to the USA s 27.5 kg. This latent demand along with the rapid growth of key user industries has encouraged most major players to launch expansion plans. Glass for the Green Cause Chairman s Overview HNGIL Segment Sales 2013 In the year under review, the economic slowdown in India impacted almost all manufacturing sectors and the struggle to control inflationary costs amidst slowing demand put severe pressure on the bottom line of most user industries. Consequently, demand for container glass declined as some customers, in a bid to curtail costs, sought cheaper substitutes. Company-specific problems of some major customers also added to the negative impact. The industry also has to contend with cost pressures. Soda ash, silica sand and cullet (broken glass) are the main raw materials while energy costs account for 30-35% of total cost.rising commodity prices and exchange rate fluctuations therefore impact operating 100 margins, apart from demand factors mentioned earlier. To counter cost pressures, the Company has taken several measures particularly in power and fuel, the result of which will start coming in coming quarters. Also in the long term, the growing markets and increasing presence of the world s largest companies and brands in India signals the maturing of the Indian market. As multinational companies gain greater control of the Indian Made Foreign Liquor (IMFL) industry there is also a resultant demand for international quality glass packaging and high hygiene standards. Given HNGIL s standing and reputation in glass packaging this should fetch commensurate benefits over the coming years VC & MD s Review % 16% 11% Liquor Beer Pharma Food Soft Drinks 10% 9% 2% 2% 1% Toiletries House hold Vials 28 Annual Report

47 SEGMENT ANALYSIS Liquor Trakya Cam The Indian liquor industry is in a long term growth trend with favorable demographics, rising disposable income levels and greater acceptance of alcoholic beverages in social circles and among women. According to a study by research firm Data Monitor, the sector has been growing at a compound annual growth rate of 12 per cent for the last decade and is currently pegged at nearly ` 150,000 cr. In spite of discouraging government policy, it ranks among the country s fastest growing industries. While the bulk of sales is in country liquor, 260-million case strong Indian-made foreign liquor (IMFL) is fast catching up India is turning out to be an attractive territory for global players as consumption of alcohol has saturated in many countries and even declined in traditional markets like Europe, while India offers immense growth opportunities, Data Monitor Container glass will continue to remain the primary packaging material for alcoholic beverages. Growth in alcoholic beverages is expected to remain buoyant at over 15 per cent. Although, in the recent past, PET bottles were introduced to package certain Indian Made Foreign Liquor (IMFL) and beer brands, it has not attracted positive response from consumers. Therefore, we do not foresee any significant substitution of glass with PET bottles for packaging alcohol. Crisil % CAGR Glass Volume and Growth for Spirits in Key Asian Countries China India 4 South Korea 2 Philippines Taiwan Thailand 0 Japan % growth Notes: bubble size shows 2012 volume, billion units Source : Euro Monitor The market is skewed towards southern India which contributes well over half in sales. The market in India is dominated by United Spirits which holds 41% volume share. Since liquor bottles account for nearly half of HNGIL s and the Industry s sales, demand from the south and key customers play a major role in your Company s performances. The Company successfully commissioned its plant at Naidupeta to better serve the southern markets. However the liquor industry s need to conserve costs saw a shift to PET bottles in pricedriven volume brands and smaller packs. Overall the liquor industry, which was growing at double digit rate for past decade, surprisingly reported a growth of only 3% last year. This resulted in marginal contraction in HNGIL sales in FY However, with rising middle class affluence and easing of taboos against social drinking, the liquor industry is expected to soon resume its upward path. The internationalization of the industry also ensures steady demand for glass bottles as more global brands enter the country and world bottling standards are implemented. Also, experimentation with alternate packaging has not been well-received anywhere in the world, including India, leading to a renewed demand for glass in bottling wines and spirits. For HNGIL the demand expectations from this segment remain high. CSR Directors Statutory Reporting Financial Section 29 Annual Report

48 Beer Chairman s Overview Glass for the Green Cause We are HNG Vision Despite being a tropical country, consumption of beer is surprisingly low in India, although it ranks among the top 15 in the world in absolute terms due to its large population. Annual beer consumption per capita is below two liters, which is a lot less than other Asian markets, such as China (more than 35 liters) and Hong Kong (22 liters), according to Euromonitor International. It is over 125 litres in beer drinking countries like Germany and New Zealand. Although the current market size is less than 20 million hectoliters, changing tastes and trends are expected to rapidly propel India into one of the world s top 10 beer markets during the current decade. Already consumption is growing faster than spirits and wine, and by the end of 2012 the beer market in India accounted for almost half -- 46% -- of total alcoholic drinks volume sales. In anticipation multinational and Indian brewers have been investing heavily in India in building brewery capacity in the last few years. United Breweries is the largest brewery group in India accounting for 54% market share The beer sector posted a strong year in 2012 with new product launches by foreign brewers and increasing sales by market leaders to clock over 13% growth and about 270 million cases. However the demand for container glass in beer market suffered because of high float created in earlier years due to embossing of brand names of beer bottles. This is a temporary phenomenon and demand has started picking up from Q4 FY13 onwards. Indeed the beer segment offers promising prospects over the coming months and years. A young, upwardly mobile urban population is, of course, a key driver. Global beer majors are also starting to play a major role in the Indian market bringing with them professional marketing techniques to encourage consumption. Government regulations on sale are also being steadily eased, making beer more widely available. For a market leader like HNGIL such generic growth of user markets bodes extremely well. The growth is driven by college-going young adults and professionals ages 18 to 40 who "consider it more fashionable to drink beer than consume brown spirits," Beer Demand: Past & Future 2012 unit volume (billions) 528 KLs Euromonitor KLs 820 KLs 985 KLs 1320 KLs Source: NIIR Top 15 Countries for Beer in Glass and Prospects China USA Germany Mexico Russia Venezuela Brazil South Africa Canada Colombia Poland India Australia France Ukraine 2012 unit volume % CAGR Source : Euro Monitor % CAGR Food & Beverages VC & MD s Review The Indian F & B industry is a buoyant one, which according to a FICCI-Technopak study is expected to touch to $300 billion by It is considered a priority sector by the government, since it has potential for generating employment in both urban and rural areas. According to the India Brand Equity Foundation (IBEF), the industry already employs over 1.6 million workers directly, besides its impact on other sectors such as agriculture, logistics and retailing. Beverages, in particular, have a direct linkage with container glasses. The Indian Beverage Association (IBA) expects the country's beverage industry to continue to grow in double digits, despite the recessionary threats. Within the sector, the nonalcoholic ready-to-drink beverage segment has been growing at a compound annual growth rate (CAGR) of 13 per cent since 2009, and is one of the segments that have defied the slowing economic growth. Multinational 30 Annual Report

49 cola companies have major plans for India in view of its attractive demographics and weather conditions. Experts estimate non-alcoholic beverages (especially aerated drinks) segment will accelerate growth in the range of 20-25% over the next 3 years. HNGIL made significant inroads in the bottled soft drinks segment, where glass bottles provide significant cost benefits*, with sales rising by 35%. The food segment however witnessed marginal degrowth, largely due to economic conditions and rising competition from plastic bottles, tetrapacks and other material. Cost competitiveness of glass bottles over PET bottles Packaging cost of glass bottle vs. PET bottle for 300ml Cost of one glass bottle 8 Number of times it is re-used times Cost of collection and re-use (per re-use) 1-2 Cost of glass bottle per use (excluding time value of money) Cost of one PET bottle 4-5 Source: Crisil Trakya Cam CSR Pharmaceuticals The Indian Pharmaceutical Industry is India's top science-based industries, ranking high amongst all third world countries, in terms of technology, quality and the vast range of medicines that are manufactured. It is an Industry that has grown from mere US$ 0.3 billion turnover in 1980 to about US$ 25 billion today. India ranks 3 rd in terms of volume of production, accounting for 10 per cent of global share. It exports drug intermediates, Active Pharmaceutical Ingredients (APIs), Finished Dosage Formulations (FDFs), Bio-Pharmaceuticals, Clinical Services to various parts of the world.according to a Pricewaterhouse Coopers (PwC) report, the Indian Conclusion The major sectors which require container glass are among the buoyant in the economy. Despite adverse economic conditions they have maintained a steady growth with most being expected to double their production by Glass containers, despite rising competition from alternate packaging, remains incomparable for many kinds of packaging needs. It also finds favour as a natural product in an increasingly environment conscious world. These long term advantages ensure a steady future for the pharmaceutical market is expected to touch US$ 74 billion sales by Glass containers are required for a wide range of pharmaceuticals ranging from syrups and tonics to injectibles due to its ability to preserve purity. A large demand arises from the over-the-counter or OTC market, which is among the fastest growing segments. For the pharmaceutical industry, nothing can match the safety of glass containers in preserving contents. HNGIL sales consequently reflected a healthy 10% rise, mirroring the pharmaceutical industry s growth. industry in which HNGIL is the dominant market leader. As a market leader HNGIL is also subject to cyclical ups and downs that all industries are subject to. The container glass industry is currently being buffeted by short term factors affecting the economy and its principal clients. It is estimated that such adversities will cyclically bottom out and that investments made in the recent past will begin to bear fruit in the near future. Directors Statutory Reporting Financial Section 31 Annual Report

50 Vision Directors Report We are HNG Dear Members, Glass for the Green Cause We hereby present Annual Report together with the Audited Accounts of our business and operations for the year ended March 31, Financial Highlights For the year ended For the year ended Particulars March 31, 2013 March 31, 2012 Gross sales (including excise duty) 198, ,205 Profit before interest, depreciation and tax 15,569 30,390 Interest and finance charges 20,357 9,233 Profit / (Loss) before depreciation and tax (4,788) 21,157 Depreciation 19,831 11,652 Chairman s Overview Profit / (Loss) before tax (24,619) 9,505 Provision for tax (7,439) 419 Profit / (Loss) after tax (17,180) 9,086 Balance brought forward from previous year 10,287 5,961 Provision for proposed dividend including Dividend Distribution Tax written back Forgo of right to receive Dividend by HNG Trust and Ace Trust Transfer from Debenture Redemption Reserve 2,500 Transfer from General Reserve 6,740 Amount available for appropriation ,803 VC & MD s Review Appropriation Amount transferred to General Reserve 1,000 Amount transferred to Debenture Redemption Reserve 5,000 Proposed dividend 87 1,310 Tax on dividend Balance carried forward to the next year 10, Annual Report

51 Review The financial year under review was mixed year for your Company. The Company has successfully commissioned the world s largest container glass furnaces with a capacity of 650 TPD at its Nashik and Naidupeta units but the financial performance of the Company suffered due to challenging environment. The year saw GDP dropping to ~5% and people have started cutting on discretionary spending which has affected the consumption and also had an impact on demand for glass. The performance was further impacted due to higher interest and depreciation cost coupled with initial stabilisation cost for the new plants. In this challenging environment, your Company reported a total income of ` 183,188 lacs in compared to ` 189,474 lacs in Your Company recorded an EBIDTA of ` 15,569 lacs and a net loss of ` 17,180 lacs during the year under review. During the current financial year, your Company has given major thrust on strengthening its existing internal control and on implementation of various cost saving measures, the effect of which would be visible in coming quarters. Your Company will continue to give importance to the same in the coming years also. Some of the main initiatives proposed for the financial year are as follows: (i) (ii) (iii) (iv) (v) (vi) Development of alternate source for electricity; Increase in production efficiency; Development of alternate source and vendors for procurement of raw materials; Increasing usage of cullet; Waste reduction; Enforce quality checks; Dividend Your Directors recommend a dividend of 5% i.e. ` 0.10 per equity share of ` 2 each for the year The total outgo as dividend, including applicable tax, this year is ` lacs. Outlook Despite economic turmoil in many parts of the world, the global market for glass packaging continues to ride on the back of the brisk consumer demand. A report published by Visiongain in December 2012 puts the size of the global glass packaging industry at $ 36.8 billion and predicts that this will nearly double over the next twenty years growing at an annual rate of 5.8%. Growing affluence, high disposable income and increase in consumption of alcoholic beverages is expected to drive the glass packaging sector, particularly in developing markets. Glass packaging currently accounts for only about 8% of overall Indian packaging demand. However, it is one of the fastest growing segments due to its popularity in some of the fastest growing consumer sectors. As per CRISIL s Report, Glass Industry will grow at a CAGR of over 16-17% and it is expected to reach ` 104 billion by The beverages segment is the largest enduser of glass bottles, accounting for over two-thirds of total demand, with alcoholic beverages alone accounting for half. Except in the last year, when economic activity slowed significantly, the demand for glass containers has been enjoying double digit growth as part of the Great Indian Consumption Story. On the supply side, 80% of the production is controlled by top 8 players, with HNGIL as the leader. Directors & Company Secretary Shri Chandra Kumar Somany and Shri Ratna Kumar Daga, Directors of the Company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for reappointment. Your Directors recommend the re-appointment of aforesaid Directors. Shri Venkatesan Sridar, has resigned from the Directorship of the Company w.e.f. May 30, The Board of Directors placed its deep appreciation for the valuable guidance and assistance rendered by him during his tenure as Director of the Company. Shri L. N. Mandhana, CFO & Company Secretary relinquished the post of Company Secretary on the close of business hours on December 31, Mr. Mandhana will continue to work as CFO of the Company. Shri Ajay Kumar Rai was appointed as Company Secretary of the Company w.e.f. January 1, Shri Sanjay Somany & Shri Mukul Somany are reappointed as Vice Chairmen & Managing Directors of the Company for a period of three years w.e.f. April 1, 2013 and Shri Rakesh Kumar Sharma is re-appointed as Executive Director of the Company w.e.f. March 1, 2013 for a period of two years as per the provisions of Schedule XIII and shall be paid remuneration subject to the approval of Shareholders and Central Government. Trust Shares Pursuant to amalgamation of Ace Glass Containers Limited with the Company, 21,41,448* shares and 13,68,872* shares having face value of ` 10 each (corresponding to 1,07,07,240 and 68,44,360 shares having face value of ` 2 each) were issued to HNG Trust and Ace Trust respectively. At present HNG Trust & Ace Trust are holding 7,797,240 & 6,844,360 shares respectively. In terms of an undertaking given to the Bombay Stock Exchange, the Company is required to make disclosures pertaining to utilisation of proceeds Trakya Cam CSR Directors Statutory Reporting Financial Section 33 Annual Report

52 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision of shares allotted to the said Trusts until they are extinguished. During the financial year , 143,35,000 shares in aggregate were pledged by both the Trusts for the loan availed by the Company of ` 190 crores from Axis Bank Ltd., L&T Finance Ltd. and Aditya Birla Finance Ltd. for meeting its capital expenditure. *The Company s shares were sub-divided from `10 per share to ` 2 per share w.e.f. November 13, Fixed Deposits Your Company did not accept any deposits from the public within the meaning of section 58A of the Companies Act, 1956 during the financial year Consolidated Financial Statements Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 read with Accounting Standard 23 issued by the Institute of Chartered Accountants of India and forms part of this Annual Report and accounts in accordance with disclosure made in respect thereto in the Notes on Financial Statements No. 2.1 to Auditors Report The Auditors Report contains the following observation: As stated in Note no of the financial statements regarding remuneration paid/payable to the Vice Chairmen & Managing Directors and Executive Director in excess of the limits laid down in the Companies Act, 1956 aggregating to ` lacs awaiting Central Government approval and further the appointment / remuneration of ` 4.76 lacs of the Executive Director for the period March 1, 2013 to March 31, 2013 is subject to approval of Shareholders in the ensuing General Meeting and Central Government. Due to inadequate profit during the financial year the Company has paid ` 4.76 lacs as excess remuneration to its Executive Director. The necessary application has already been made to the Central Government for obtaining approval for the payment of remuneration to Shri Rakesh Kumar Sharma for the period April 1, 2012 to February 28, 2013 and to Shri Sanjay Somany & Shri Mukul Somany for the period April 1, 2012 to March 31, The application is pending for approval and your Directors presume that the necessary approval will be received during the financial year Annual Listing Fees The Company s shares continue to be listed at the National Stock Exchange of India Limited, the Bombay Stock Exchange Limited and The Calcutta Stock Exchange Limited. The annual listing fee for the year has been paid to all these exchanges. Auditors M/s Lodha & Company, Chartered Accountants, Registration No E, Statutory Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Statutory Auditors, if re-appointed. It has been confirmed by M/s Lodha & Company that they have subjected themselves to peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of the ICAI. M/s Singhi & Company, Chartered Accountants, Branch Auditors of the Company s three units namely Nashik, Puducherry and Rishikesh will also retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Branch Auditors, if re-appointed. The Board of Directors recommend re-appointment of the aforesaid Auditors. Cost Auditors In respect of financial year , your Company had appointed M/s N. Radhakrishnan & Co., Cost Accountants as Cost Auditors of the Company for maintenance of cost records. The Cost Auditor Report was filed by the Cost Auditor within the due date. Directors Responsibility Statement pursuant to Section 217(2AA) of the Companies Act, 1956 The Directors hereby confirm that:- I) In preparation of the annual accounts for the financial year , applicable Accounting Standards have been followed along with proper explanations relating to material departures. II) They selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended on March 31, 2013 and of the profits of the Company for the said financial year. III) They took proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for 34 Annual Report

53 IV) preventing and detecting fraud and other irregularities. They prepared the annual accounts on a going concern basis. Corporate Governance The Company has been practising the principles of good governance with a view to achieve transparent, accountable and fair management. The report on Corporate Governance along with the Certificate of the Auditors, M/s Lodha & Co., Chartered Accountants, confirming the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms a part of this Annual Report. Subsidiary Companies As on March 31, 2013, your Company has three subsidiaries namely: Quality Minerals Limited, Glass Equipment (India) Limited and HNG Global GmbH. Pursuant to the General Circular No. 2/2011 issued by Ministry of Corporate Affairs, granting general exemption to the companies from attaching annual accounts of the subsidiary companies, the Board of Directors in its meeting held on May 30, 2013 has given its consent for not attaching the Balance Sheet of its subsidiaries. Shareholders of the Company as well as of the Subsidiary Companies who are interested in obtaining annual accounts of the Subsidiary Companies and related detailed information may write to the Company Secretary at the Registered Office of the Company. These documents will be available during business hours for inspection by the Shareholders of the Company and of the Subsidiary Companies at the Registered Office of the Company and at the Registered Offices of its subsidiaries. Consolidated Financial Statement of the Company and its three subsidiaries duly audited for the year ended March 31, 2013 forms part of the Annual Report of the Company. Exports During the year, direct export turnover was ` 14,031 lacs compared to ` 7,687 lacs during the preceding year. Personnel and Industrial Relations Your Company is consolidating the human resource operations and the internal systems to enhance the operations of the Company. The Human Resource team is very active as it recruits and retains the existing talent pool of the Company. It is continuously involved in manpower planning, forecasting and conducting regular workshops to enhance the skill sets. Cordial industrial relations resulted in efficient production at all the plants of your Company. Statement of employees Statement of particulars of employees as required under section 217(2A) of the Companies Act, 1956 and rules framed there under forms a part of this Annual Report. Conservation of energy, technology absorption and foreign exchange earnings and outgo The statements containing the required particulars under section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are annexed hereto and forms a part of this report. Corporate Social Responsibility Sustainable development is an integral part of HNGIL Group s business philosophy. The Group has always believed in creation of wealth for its stakeholders. As a responsible Corporate, HNGIL is focused on the happiness of people living in its larger neighboring communities. We are also committed to the best industry standards in Health, Safety and Environment. The best safety equipment has been deployed at the critical locations and constant supervision is also done to maintain the highest safety standards. Our CSR team works towards improving the living conditions of the underprivileged and makes a positive difference in their lives. A number of focused initiatives have been implemented near the plant locations. Acknowledgments Your Directors wish to express their gratitude and appreciation for assistance, co-operation and encouragement extended by all Investors, Financial Institutions, Banks, Government Authorities, Customers, Vendors and Employees during the year and place on record their deep sense of appreciation for the committed services of their executives, staff and workers for an overall performance of the Company. Place: Kolkata Date: May 30, 2013 For and on behalf of the Board Chandra Kumar Somany Chairman Trakya Cam CSR Directors Statutory Reporting Financial Section 35 Annual Report

54 Vision Annexure to the Directors Report VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG 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, I. ENERGY CONSERVATION Energy conservation continues to remain the key focus area for the Company. New initiatives and developments undertaken in this direction are: RISHRA 1. Conversion of mould preheater from LPG to Electrical, yielding an energy savings of 5414 Mcal. 2. Conversion of CENTAC compressor no. 1 from stage 3 to stage 2 has led to energy saving of 3 kwh/mt. 3. Installation of Bell mouth in mould cooling blowers for energy efficiency. 4. Cooling Tower Chemical Treatment is being done on regular basis leading to less clogging of heat exchanges thereby less discharge of temperature. As a result less energy is consumed by compressor. 5. Variable Frequency Drive (VFD) installation for dryer cooling pumps. 6. Installation of efficient light fittings with electronic gear & use of LED lights. BAHADURGARH 1. Reduction in auxiliary consumption of DG sets after shifting the total load on 132 KVA grid power. 2. Reduction in use of FO by lower usage use of DG sets. 3. Installed VFD on mould cooling blowers to reduce power consumption. 4. Installed online compressed air pressure monitoring system to optimize the energy consumption of compressors. 5. Installed energy efficient lighting. 6. Installed auto level controller in overhead tanks to save water and pump energy. 7. Installed capacitor bank to keep power factor near unity. 8. Installed grid synchronization system for smooth changeover from grid to DG and vice versa. 9. Replaced RO plant membranes to increase efficiency of plant and reduce energy consumption. 10. Installed VFD on gas blowers to reduce power consumption. 11. All critical equipments connected to centralized PLC panel to reduce downtime. RISHIKESH 1. New modified pipe line has been installed for compressed air to reduce the power consumption. 2. Installed VFD on mould cooling blowers to reduce power consumption. 3. Installed energy efficient lighting. 4. Installed the timer in return cullet conveyor to reduce the power consumption. 5. Installed capacitor bank to keep power factor near unity. 6. Installed VFD on 2nd return cullet conveyor with UPS alignment to reduce the power consumption. 7. All critical equipment connected to UPS to reduce downtime. NASHIK 1. Furnace 10 was rebuilt with new checkers for the regenerators. This has resulted in the energy saving to the tune of 15% per ton of glass melted. 2. Furnace 12 LNG firing system installation & commissioning done. PUDUCHERRY 1. Replacement of Machine cooling Blowers of Mc#91 with energy efficient German Blowers leading to reduction in electrical energy. 2. Improvement in power factor. NAIDUPETA 1. Dedicated 132 KVA line is commissioned resulting in less power failure and reduction in auxiliary consumption of DG sets. This has resulted in reduced down time and energy saving Annual Report

55 I FORM A Disclosure of Particulars with Respect to Conservation of Energy Year ended Year ended PARTICULARS Unit March 31, 2013 March 31, 2012 A. POWER & FUEL CONSUMPTION 1 ELECTRICITY a) Purchased Unit 000 KWH 275, , Total Amount 17, , Average Rate/Unit ` b) Own Generation Through Diesel/H.P.S/Furnace Oil By Generator Unit 000 KWH 19, , Amount 2, , HSD/FO/HPS used Litre 5,550, ,325, Units per Litre of Oil Average Rate/Unit ` c) Own Generation (Through LNG) By generator unit 000 KWH 61, , Amount 4, , LNG Used Litre 625, , Units per Litre of MMBTU of LNG Average Rate/Unit ` F-Oil / RFO Quantity (KL) KL 70, , Total Amount 27, , Average Rate/Unit ` 38, , L.N.G. Quantity MMBTU 2,776, ,670, Total Amount 21, , Average Rate/Unit ` i) L.P.G. Quantity MT 8, , Total Amount 5, , Average Rate/Unit ` 63, , ii) H.S.D. Quantity KL 15, , Total Amount 6, Average Rate/Unit ` 40, , iii) L.D.O. Quantity KL Total Amount Average Rate/Unit ` 35, , B CONSUMPTION PER UNIT OF PRODUCTION Glass container & tumblers MT 846, , Electricity KWH L.P.G. KG F-Oil/ RFO / Equv.Oil LTR LNG MMBTU H.S.D LTR L.D.O LTR Notes: 1. Variation in consumption of power and fuel is attributable to enhanced production capacity. Trakya Cam CSR Directors Statutory Reporting Financial Section 37 Annual Report

56 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision II FORM B Disclosure of particulars with respect to absorption 1. RESEARCH AND DEVELOPMENT a. Specific areas in which R & D is carried out by the Company RISHRA 1. Light weighting of more jobs in Blow and Blow Process and development of NNPB process for new jobs continues. 2. Development of Handle Jar completed. 3. Development of Jigs & Fixtures for productivity improvement of moulds. BAHADURGARH 1. Light weighting of more jobs in Blow and Blow Process and development of NNPB process for new jobs continues. 2. A pilot project has been started for online monitoring of compressed air system which will result in optimization of pressure requirement at all time, hence saving in energy. RISHIKESH 1. Light weighting of more jobs. NASHIK 1. Advanced Loading System Installation in IS machines resulting in better gob loading KW drive installation in Line 104 resulting in higher running cycles of IS machines and increased through put of the Line. NEEMRANA 1. Constructed false port and Regenerator arches in place of collapsed arches of the furnace in running condition. 2. Repaired throat and side walls in running condition without having much of the impact on productivity and efficiency. NAIDUPETA 1. Plant load increased from 4.9 MVA to 10 MVA. b. Benefits derived as a result of above R & D RISHRA 1. More Light Weighted and NNPB jobs launched. BAHADURGARH 1. More Light Weighting and NNPB jobs launched. 2. Compressed air generation was optimized. 3. Cost & energy saving and limiting use of FO & gas. 4. Oil atomization improved significantly. RISHIKESH 1. More Light Weighting of jobs. 2. Compressed air generation/utilization was optimized. 3. Optimization of gas consumption in forehearth, distributor and lehrs by daily monitoring. 4. Cost & energy saving and limiting use of FO & gas. c. Future plans of action RISHRA 1. Reduction of overall Energy by 5 KWH/MT 2. Stoppage of Booster usage for furnace heating. 3. Alternate sourcing of electricity. NEEMRANA 1. Up-gradation of workshop is planned to cater special needs of the mould equipment. 2. Up-gradation of Batch House with additional capacity and automation system is planned along with Furnace rebuild. 3. Up-gradation of cold end with case packer and online shrink wrapping system is planned. 4. Construction of new warehouse for additional storage capacity of finished Goods. 5. On line cullet return system which directly connected to batch silos through conveyer system. d. Expenditure on R & D (`. in lacs) Particulars a. Capital b. Recurring c. Total Total R&D Expenditure as a % of total turnover Insignificant 38 Annual Report

57 2. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION BAHADURGARH 1. Fully automatic palletizing facility installed on furnace # 4. It will result in maximizing of packaging line efficiency. 2. Further strengthened our NNPB initiates by commercializing another 6-7 jobs in NNPB process. 3. Installation of Tandem push bar stacker with cross conveyer in ACL, Bahadurgarh. 4. Mixed Fuel Burners was installed in gas fired furnaces. 5. Light weighing of jobs on Blow & Blow and Press & Blow: improved process stabilization and better design of moulds. 6. New Product Development of water bottle/bottles with push up, critical shapes. 7. Installation of palletizers, online packing machines, pick & placer for automation. 8. Ceramic welding carried out on fur #3 to extend life of the furnace. 9. Improvement in strength of Glass bottles by Hot End /Cold End Coating process. 10. Conversion of pneumatic mechanism to servo proportional driven mechanisms. 11. Contact less ware handling equipment installed on 4 lines and planned for another 4 lines. 12. Live transfer system installed on 2 lines on unstable high speed production lines. RISHIKESH 1. Converted gas lehr in ACL to electric fired lehr to optimization of energy cost in ACL. 2. Light weighing of jobs on Blow & Blow : improved process stabilization and better design of moulds. 3. Improvement in strength of Glass bottles by Hot End /Cold End Coating process. 4. Improve the KCR for optimization of cost of production. III PUDUCHERRY 1. Light-weighting of high volume Blow & Blow and Press & Blow jobs. 2. Replacement of IS Machine section box modules of Mc 92 & 94 with improvised / upgraded modules. 3. Complete C class repair of AIS Machine # 91 to improve the productivity levels of the Machine. NAIDUPETA 1. Light-weighting of high volume Blow & Blow and Press & Blow jobs. 2. Improve the KCR for optimization of cost of production. FORM C Foreign Exchange Earnings and Outgo Over the years, the Company has steadily strengthened its export presence in key overseas markets of the USA, South Africa, Kenya, Australia, Hongkong, Thailand, Bangladesh to name a few. The foreign exchange earnings and outgo are detailed below: Particulars Earnings in foreign exchange 9, , Expenditure incurred in foreign exchange (i) Raw Materials 19, , (ii) Capital Goods 8, , (iii) Components, spare parts & repairs 6, , (iv) Other expenses 3, , Place: Kolkata Date: May 30, 2013 For and on behalf of the Board Chandra Kumar Somany Chairman Trakya Cam CSR Directors Statutory Reporting Financial Section 39 Annual Report

58 Vision CEO & CFO CERTIFICATION We, Sanjay Somany, Vice Chairman & Managing Director, Mukul Somany, Vice Chairman & Managing Director and Laxmi Narayan Mandhana, Chief Financial Officer, responsible for the finance function certify that We are HNG Glass for the Green Cause (a) (b) (c) We have reviewed the Financial Statements and the Cash Flow Statement for the year and that to the best of our knowledge and belief: (i) these statements do not contain any materially untrue statements or omit any material fact or contain statements that might be misleading; (ii) these statements together present a true and fair view of the Company s affairs and are in compliance with existing accounting standards, applicable laws and regulations, with proper explanation as to material departures. To the best of our knowledge and belief, no transactions entered into, by the Company during the year , were fraudulent, illegal or violating the Company s code of conduct. We accept responsibility for establishing and maintaining internal controls for financial reporting and have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting. We have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. (d) We have indicated to the Auditors and the Audit Committee: Chairman s Overview (i) (ii) (iii) that no significant changes in internal control over financial reporting during the year have taken place; that no significant changes in accounting policies during the year have taken place and that the same have been disclosed in the notes to the financial statements and that there are no instances of significant fraud of which we have become aware and the involvement therein, if any, of the Management or an employee having a significant role in the Company s internal control system over financial reporting. VC & MD s Review Mukul Somany Sanjay Somany Laxmi Narayan Mandhana Vice Chairman & Managing Director Vice Chairman & Managing Director Chief Financial Officer (Chief Executive Officer) (Chief Executive Officer) 40 Annual Report

59 PARTICULARS OF GOVERNMENT COMPANIES AND COMPANIES IN TERMS OF SECTION 217(2A) OF THE COMPANIES ACT, 1956 Trakya Cam Last Qualification Gross Employment Sl. Name Age & Experience Date of Designation Remuneration held No. (Years) in years Appointment (Nature of Duties) (`) (Designation) 1 Mr. Sanjay Somany 55 B. Com Vice Chairman 30,037,696 Glass Diploma in and Managing Equipment Diesel Director (India) Ltd. Engineering (To Manage the (Managing affairs of the Director) 33 years Company on day to day basis) 2 Mr. Mukul Somany 48 B. Com Vice Chairman 30,037,696 None (Hons.) and Managing 26 years Director (To manage the affairs of the Company on day to day basis) 3 Mr. Rakesh Kumar 61 B.E. (Mech.), Executive Director 6,226,000 Larsen & Sharma MBA- Toubro Ltd. Marketing (Vice 40 Years President) Notes: I) Remuneration includes salary, commission and contribution to Provident Fund, Gratuity and other facilities. II) 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. III) All appointments of the above employees are contractual. CSR Directors Statutory Reporting Place: Kolkata Date: May 30, 2013 For and on behalf of the Board Chandra Kumar Somany Chairman Financial Section 41 Annual Report

60 Vision Report on Corporate Governance Glass for the Green Cause We are HNG Chairman s Overview 1. Company s Philosophy on Code of Governance HNG believes that transparent and ethical practices, in line with accepted norms of Corporate Governance are essential for long term success. The Company lays strong emphasis on management accountability, established control systems and individual integrity at all levels. It seeks to ensure that business objectives are balanced with corporate responsibility to create sustainable value for all stakeholders including shareholders, employees, customers, government and the lenders. In addition to compliance with the regulatory requirements, the Company endeavours to ensure that business practices also follow the spirit of the laws and ethical mores of society so that the reputation built over decades is nurtured. During , the Company kept its commitment towards the required norms and disclosures on Corporate Governance under the Listing Agreement entered into with the Stock Exchanges, on which the shares of the Company are listed. 2. Board of Directors The Company 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, 2013 is given below: Out of the total 9 Directors on the Board:- Three are Executive Directors Six are Non-Executive Directors of which five are 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. VC & MD s Review Attendance of Directors at the previous Annual General Meeting (AGM) & Extra- Ordinary General Meeting (EGM) The last Annual General Meeting was held on August 11, 2012 at Indian Chamber of Commerce, ICC Towers, 10th Floor, 4 India Exchange Place, Kolkata and the same was attended by all the Directors except Shri Kishore Bhimani, Shri Rakesh Kumar Sharma and Shri Venkatesan Sridar. Extra- Ordinary General Meeting of the Company was held on December 18, 2012 at Bengal Chamber of Commerce, 6 Netaji Subhas Road, 1st Floor, Kolkata and the same was attended by Shri Chandra Kumar Somany, Chairman of the Company Annual Report

61 Attendance of Directors at the Board Meeting and number of other directorships and other Board Committee Memberships, among others, during the year under review. Directorship #Number of committees Number in other (other than that of the of Board companies Company) in which he is meeting(s) incorporated Name of the Director Category of Directorship attended in India^ Chairman Member Total Shri Chandra Kumar (Chairman) Non-Executive Somany Non Independent 4 8 Shri Sanjay Somany (Vice Chairman & Managing Director) Executive 4 9 Shri Mukul Somany (Vice Chairman & Managing Director) Executive Shri Kishore Bhimani Independent 4 1 Shri Sujit Bhattacharya Independent 4 Shri Ratna Kumar Daga Independent Shri Dipankar Chatterji Independent Shri Venkatesan Sridar Independent Shri Rakesh Kumar Executive Director 3 1 Sharma Trakya Cam CSR ^excludes directorship of companies incorporated under section 25 of the Companies Act, 1956, Private Limited Companies, Limited Liability Companies and Foreign Companies. # Membership/Chairmanship of Audit Committees and Shareholders /Investors Grievance Committees have been considered. Board Meetings held during the year During , four Board meetings were held. The maximum time gap between two Board Meetings does not exceed 120 days. The details of the meetings are as follows:- Sl No. of Directors No. Date of meeting During the quarter present 1 May 15, 2012 April 2012 June August 11, 2012 July 2012 September November 7, 2012 October 2012 December February 13, 2013 January 2013 March 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 Committee Terms of reference The Company constituted an Audit Committee in the year The terms of reference of the Audit Committee are as follows: 1 Oversight of the Company s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. 2 Recommending to the Board, the appointment, re-appointment and if required, the replacement or removal of the Statutory Auditors, Tax Auditors and Internal Auditors of the Company and the fixation of their audit fees. Directors Statutory Reporting Financial Section 43 Annual Report

62 3. Approval of payment to Statutory Auditors for any other services rendered by them. Vision We are HNG 4. Reviewing, with the Management, the annual financial statements before submission to the Board for approval, with particular reference to: a. Matters required to be included in the Director s Responsibility Statement forming a part of the Boards Report in terms of Section 217(2AA) of the Companies Act, b. Changes, if any, in accounting policies and practices and reasons for the same. c. Major accounting entries involving estimates based on the exercise of judgment by the Management. d. Significant adjustments made in the financial statements arising out of audit findings. e. Compliance with listing and other legal requirements relating to financial statements. f. Disclosure of any related party transactions. g. Qualifications in the 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. Glass for the Green Cause 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. Chairman s Overview VC & MD s Review 12. Carrying out any other function as mentioned in the terms of reference of the Audit Committee. Composition, meetings and attendance during the year:- During , 13 meetings of the Audit Committee were held and the attendance of each member of the Committee is given below:- Dates of meetings:- May 15, 2012 May 30, 2012 June 4, 2012 August 2, 2012 August 11, 2012 August 23, 2012 September 14, 2012 November 7, 2012 November 28, 2012 December 17, 2012 February 6, 2013 February 12, 2013 February 27, 2013 Members of the Audit Committee have the requisite financial and management expertise. The Chairman of the Audit Committee attended the 66th Annual General Meeting of the Company.

63 Total strength of the Audit Committee: Three Number of Number of Designation Members Category meetings held meetings attended Chairman Shri Ratna Kumar Daga Non-Executive, Independent Director Member Shri Sujit Bhattacharya Non-Executive, Independent Director Member Shri Dipankar Chatterji Non-Executive, Independent Director Remuneration Committee Terms of reference- To formulate and determine the Company s policy regarding remuneration packages for Directors including any compensation payments. Composition, meetings and attendance during the year: During , 2 meetings of the Remuneration Committee were held on May 15, 2012 and February 13, Total strength of the Remuneration Committee: Three Number of Number of Designation Members Category meetings held meetings attended Chairman Shri Kishore Bhimani Non-Executive, Independent Director 2 2 Member Shri Ratna Kumar Daga Non-Executive, Independent Director 2 2 Member Shri Dipankar Chatterji Non-Executive, Independent Director 2 1 Trakya Cam CSR Directors The Remuneration Committee approved the re-appointment and increase in remuneration of the Executive Director in terms of the agreement entered by the Company with him. 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. 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 August 11, 2012, approved the payment of remuneration by way of commission every year to the Non- Executive Directors of the Company ` 1,50,000 or 1% 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 five years commencing from April 1, 2012 and ending on March 31, The Commission for the financial year will be distributed among the said Directors accordingly. Details of the remuneration paid to the Directors during To Non-Executive Directors In addition to the commission as aforesaid, the Independent and Non-Executive Directors are entitled to a sitting fee of ` 20,000/- for attending each meeting of the Board and ` 15,000/-for the Audit Committee. The members of Remuneration Committee are paid a sitting fee of ` 10000/- for attending each Committee Meeting. Further, no remuneration is paid for attending the meetings of the Share Transfer and Shareholders Grievance Committee and Treasury Management Committee. Statutory Reporting Financial Section

64 The Company obtained shareholders approval for the payment of commission to Non-Executive Directors, on August 11, 2012, 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. Vision The details of sitting fees paid and commission payable during are as follows: Business relationship Directors with HNG Sitting fees Commission Total Shri Chandra Kumar Somany* Promoter 80, ,000 Shri Kishore Bhimani None 100, ,000 Shri Sujit Bhattacharya None 245, ,000 Shri Ratna Kumar Daga None 295, ,000 (in `) We are HNG Shri Dipankar Chatterji None 250, ,000 Shri Venkatesan Sridar None 60, ,000 * Shri Chandra Kumar Somany is the father of Shri Sanjay Somany, Vice Chairman & Managing Director and Shri Mukul Somany, Vice Chairman & Managing Director. Other Directors are not related to one another. To Executive Directors The details of remuneration paid to Executive Directors during as per their respective agreements is as follows: Glass for the Green Cause Chairman s Overview VC & MD s Review Break-up of Remuneration (in `) Shri Sanjay Somany * Shri Mukul Somany* Shri Rakesh Kumar Sharma Vice Chairman & Vice Chairman & Managing Director, Managing Director, Promoter s family Promoters family Executive Director Salary 25,969,000 25,969,000 5,280,000 Provident fund 2,401,200 2,401, ,000 Perquisites 1,667,496 1,667, ,000 Commission Total 30, 037,696 30, 037,696 6,226,000 * Shri Sanjay Somany, Vice Chairman & Managing Director and Shri Mukul Somany, Vice Chairman & Managing Director, are brothers and are related to Shri Chandra Kumar Somany, Chairman of the Company. Notes a. The existing agreements with the Executive Directors, Shri Sanjay Somany and Shri Mukul Somany, were for a period of five years and expired on September 30, The Company in its Annual General meeting held on September 24, 2010 has appointed Shri Sanjay Somany and Shri Mukul Somany as Vice Chairman & Managing Director for a further period of 5 years w.e.f October 1, 2010 b. The Company has entered into an agreement with Shri Rakesh Kumar Sharma appointing him as an Executive Director for a period of two years w.e.f. March 1, Further the Board of Directors in its meeting held on February 13, 2013 subject to approval of shareholders re-appointed him as an Executive Director for a further period of 2 years w.e.f March 1, c. The commission payable to Shri Sanjay Somany & Shri Mukul Somany has been increased from 1% to 1.5% w.e.f. October 1, 2010 subject to a ceiling of their annual salary. Shri Rakesh Kumar Sharma is entitled to a commission of `13.2 lakhs p.a. Due to the inadequacy of profits during the financial year , no commission was paid to Executive / Non-Executive Directors. d. No stock option is available with the Executive Directors or the employees of the Company Annual Report

65 5. Share Transfer and Shareholders Grievance Committee Composition, meetings and attendance during the year:- Total strength of the Share Transfer and Shareholders Grievance Committee: Four Number of Number of Designation Members Category meetings held meetings attended Chairman Shri Kishore Bhimani Non-Executive Independent Director 0 0 Trakya Cam Member Shri Ratna Kumar Daga Non-Executive Independent Director 0 0 Member Shri Sanjay Somany Executive Director 0 0 Member Shri Mukul Somany Executive Director 0 0 No meeting of the Share Transfer and Shareholders' Grievance Committee was held during the year. Shri Ajay Kumar Rai, Company Secretary is also the Compliance Officer of the Company. CSR Shareholders complaints and pending share transfer There were no investor grievance complaints received during All complaints were resolved and there were no complaints pending at the year ended March 31, 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 66 th Annual General Meeting Indian Chamber of Commerce, Saturday, 2.00 pm ICC Towers, 4 India Exchange Place, August 11, th Floor, Kolkata Directors 65 th Annual General Meeting Indian Chamber of Commerce, Friday, 3.30 pm ICC Towers, 4 India Exchange Place, August 19, th Floor, Kolkata th Annual General Meeting CII Suresh Neotia Centre of Friday, Excellence for leadership, DC 36, September 24, pm sector I, Salt Lake city, Kolkata Details regarding special resolutions passed during the previous three years are given below:- Shareholders meeting Special business requiring special resolution 66 th Annual General Meeting 1. Resolution requiring approval for commission payable to the Non-Executive Directors. Statutory Reporting 65 th Annual General Meeting 1. No Special Resolution was passed. 64 th Annual General Meeting 1. Resolution requiring approval for alteration of article no. 110A in respect of number of Managing Directors that the Company may appoint. 2. Resolution requiring approval for availing services of Dr. Indrajit Kumar Saha, Director of the Company on retainership basis. Financial Section 47 Annual Report

66 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision Postal ballot During the year, ordinary resolution under section 293(1) (a) & 293(1) (d ) of the Companies Act, 1956 and other relevant provisions approving enhancement of limit to borrow additional funds up to `3,000 crores and creation of charge/mortgage/hypothecation etc. on Company s movable or immovable properties was passed by shareholders through Postal Ballot. Shri Mukesh Rathi, Practicing Company Secretary, appointed as Scrutinizer by the Company, received a total of 40 ballots representing 86.75% of total paid-up capital of the Company were all valid and had assented for the aforesaid resolution. Ordinary Resolution u/s 293(1)(a) and 293(1)(d) of the Companies Act, 1956 and other relevant provisions, approving enhancement of limit to borrow additional funds up to ` 4,000 crores (Rupees four thousand crores only) and creation of charge/mortgage/hypothecation, etc. on the Company s movable or immovable properties requiring postal ballot u/s 192A of the Companies Act, 1956 is being proposed at the ensuing Annual General Meeting. 7. Disclosures There were no materially significant related party transactions made by the Company with its Promoters, Directors or the Management and its subsidiaries or relatives, among others, 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. Related party transactions in the ordinary course of business are reported to the Audit Committee. Such transactions are disclosed in Note No of Notes on Financial Statements 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 cognisance of the complaints made and suggestions given by the employees and others. Even anonymous complaints are looked into and whenever necessary, suitable corrective steps are taken. No employee of the Company was denied access to the Audit Committee of the Board of Directors of the Company. The Company conducts periodic reviews and reporting to the Board of Directors regarding risk assessment by senior executives with a view to minimise risk. None of the Non-Executive Directors hold any share in the Company except Shri Chandra Kumar Somany (holding 26,66,620 shares in his personal capacity). During , the Company didn t make any public or rights issue. The financial statements for were 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, The Vice Chairmen & Managing Directors and the Chief Financial Officer 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, Pursuant to the requirement of Clause 49 of the Listing Agreement as amended, the Company adopted a Code of Conduct for Directors and Senior Management at the meeting of the Board of Directors held on August 13, The said Code is also placed on the website of the Company viz. The Directors and designated employees of the Company have complied with the provisions of the said Code of Conduct. The Management Discussion and Analysis forms a part of this Annual Report. According to Articles of Association of the Company, one-third of the Directors retire by rotation and, if eligible, seek re-appointment at the Annual General Meeting of the shareholders. As per Article 90 of the Articles of Association of the Company, Shri Ratna Kumar Daga & Shri Chandra Kumar Somany will retire in the ensuing Annual General Meeting. The Board recommended the re-appointment of all the retiring Directors. The detailed profiles of all these Directors are provided in the Notice for Annual General Meeting Section of the Annual Report Annual Report

67 The Central Government vide its Circular No. 2/2011, dated February 8, 2011 has granted general exemption to the companies under Section 212 of the Companies Act, 1956 from attaching the financial statements of the Subsidiary Companies. Accordingly, financial statements of the subsidiary companies are not annexed hereto. Shareholders of the Company as well as of the subsidiary companies who are interested in obtaining annual financial statements of the subsidiary companies and related detailed information may write to the Company Secretary at the Registered Office of the Company. These documents will also be available during business hours for inspection by the shareholders of the Company and of the subsidiary companies at the Registered Office of the Company and also at the Registered Offices of its Subsidiaries. 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 Financial Express) having wide circulation and another in vernacular language in Bengali (normally in Aarthik Lipi). However, only the annual results are sent to the shareholders of the Company. Moreover, the quarterly / annual results, investor presentations and official news releases are generally sent to the Stock Exchanges as well as also hosted on our website. The Company s annual results along with various other information are displayed on the Company s web-site 9. General shareholder information Incorporation Corporate Identification Number (CIN): AGM: Date, time and venue Financial calendar 1st quarter results by 2nd quarter results by 3rd quarter results by 4th quarter results by Date of book closure The Company was incorporated in Calcutta, in the Province of Bengal, on February 23, L26109WB1946PLC September 27, 2013 CII - Suresh Neotia, Centre of Excellence for Leadership DC - 36, Sector - I, Salt Lake City, Kolkata April to March 2 nd week of August 2 nd week of November 2 nd week of February 3 rd week of May of next year Dividend payment date October 1, 2013 Listing on stock exchanges September 20 to 27, 2013 (both days inclusive) Your Company s shares are listed on the following stock exchanges 1] The Calcutta Stock Exchange Limited 2] Bombay Stock Exchange Limited 3] National Stock Exchange 7, Lyons Range, Kolkata , Phiroze Jeejeebhoy Towers, of India Limited mop@cse-india.com Dalal Street, Mumbai Exchange Plaza, Bandra Website: is@bseindia.com Kurla Complex, Bandra (E) Website: Mumbai ignse@nse.co.in Website: Listing fees Paid for the year for all the above stock exchanges. Scrip code/scrip Symbol i on The Calcutta Stock Exchange Limited., Kolkata High/Low share price data ii on Bombay Stock Exchange Limited, Mumbai. iii. HINDNATGLS on National Stock Exchange of India Limited, Mumbai. 1] According to the data provided by The Calcutta Stock Exchange Ltd, there was no transaction in the Company s equity shares during the year under review at the said Stock Exchange. Trakya Cam CSR Directors Statutory Reporting Financial Section 49 Annual Report

68 2] The details of transactions in the Company s equity shares at the Bombay Stock Exchange Limited and National Stock Exchange of India Limited during the year and the respective high / low price data are as given below:- Vision We are HNG At Bombay Stock Exchange Limited Month High (`) Low (`) Volume (shares) April, ,223 May, ,606 June, ,467 July, ,389 August, ,051 September, ,347 October, ,802 November, ,283 December, ,197 January, ,275 February, ,530 March, ,142 Source: At National Stock Exchange of India Limited Glass for the Green Cause Chairman s Overview Month High (`) Low (`) Volume (shares) April, ,110 May, ,574 June, ,252 July, ,938 August, ,187 September, ,635 October, ,848 November, ,385 December, ,022 January, ,432 February, ,221 March, ,711 Source: Performance in comparison to broad-based indices such as BSE Sensex and NSE Nifty VC & MD s Review Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 BSE high BSE Low HNG Share Price High (`) HNG Share Price Low (`) 50 Annual Report

69 Trakya Cam Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 CSR NSE high NSE Low HNG Share Price High (`) HNG Share Price Low (`) Registrar and Share Transfer Agent : In compliance with the SEBI directive, the Company appointed M/s Maheshwari Datamatics Pvt. Ltd., as its Registrar and Share Transfer Agent for all matters relating to shares both in physical as well in dematerialised mode. However, documents relating to shares are also received at the Company s registered office at 2, Red Cross Place, Kolkata , Tel. No: (033) , Fax No: (033) , address: cosec@hngil.com Share transfer system: The transfer of shares in physical form is processed and completed by M/s Maheshwari Datamatics Pvt. Ltd. within a period of 15 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 NSDL/CDSL through respective depository participants. Directors Distribution of shareholding as on March 31, 2013 Number of equity shares held Folios % Shares % 1 to 5, , to , to , to , to , to to , and above ,820, Grand total ,338, Number of shareholders in: Physical mode , Electronic mode NSDL ,987, CDSL ,339, Total ,338, Statutory Reporting Financial Section 51 Annual Report

70 Shareholding pattern as on March 31, 2013 Category Number of shares % Vision We are HNG Promoters and associates 61,123, Institutions 6,420, Domestic companies 2,887, Resident individuals 16,379, Foreign residents and NRIs 525, Trust Clearing Member 1, Total 87,338, Dividend The Board recommended 5.% i.e. Re 0.10 per equity share Dematerialisation of shares and liquidity As on March 31, 2013, 87,326,810 shares comprising % of the paid-up capital of the Company are in dematerialised mode, as compared with 87,325,160 shares as on March 31, Chandra Kumar Somany Group, promoter of the Company, holds around % of the paid-up capital of the Company as on March 31, 2013 and as on March 31, 2012, of which all the shares are held in dematerialised mode. Demat ISIN Number for NSDL and CDSL INE952A01022 Glass for the Green Cause Chairman s Overview Outstanding GDRSs/ADRs/Warrants None or any convertible instruments, conversion date and the likely impact on equity. Plant locations The Company has seven plants, located at: 1. 2, Panchu Gopal Bhaduri Sarani, 2. Bahadurgarh , Rishra , Dist: Jhajjar, Haryana. Dist. Hooghly, West Bengal Phone: (01276) , Phone: (033) , Fax (01276) Fax (033) , RIICO Industrial Area 4. P.O. Virbhadra, Neemrana, Distt. Alwar Rishikesh , Pin (Rajasthan) Dist. Dehradun, Uttarakhand Tel , Phone: (0135) Fax Fax (0135) Thondamanatham Village, 6. Nashik Glass Work, Vezhudavoor S.O. F1, MIDC Malegaon, Puducherry Dist. Sinnar, Nashik Phone: (0413) , Phone: (025511) , Fax (0413) / Fax (025511) APIIC Industrial park, Menakuru village, Naidupeta, SPSR Nellore,Andrapradesh Phone: VC & MD s Review Address for correspondence Company Secretary Hindusthan National Glass & Industries Ltd 2 Red Cross Place, Kolkata Telephone No. (033) Fax No. (033) cosec@hngil.com ID for investors grievance cosec@hngil.com 52 Annual Report

71 B. NON-MANDATORY REQUIREMENTS UNDER CLAUSE 49 OF THE LISTING AGREEMENT The Board At present, the Chairman of the Company Shri Chandra Kumar 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, 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 of Shri Sanjay Somany, Shri Mukul Somany, Shri Ratna Kumar Daga and Shri Dipankar Chatterji as its members. During , 10 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 into two newspapers, one in English and another in vernacular language. Code of Conduct for Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Prevention of Insider Trading. Regulations, 1992, as amended, the Company adopted a Code of Conduct for Prevention of Insider Trading at the meeting of the Board of Directors held on August 13, The Company, its Directors and designated employees, have complied with the provisions of the said Code. Trakya Cam CSR Directors Place: Kolkata Date: May 30, 2013 For and on behalf of the Board Chandra Kumar Somany Chairman Statutory Reporting Financial Section 53 Annual Report

72 DECLARATION Vision All the Board Members and the Senior Management personnel have affirmed their compliance with the Code of Conduct for Directors and Senior Management for the financial year in terms of Clause 49(I)(D)(ii) of the Listing Agreement with the Stock Exchanges. Mukul Somany Vice Chairman & Managing Director Sanjay Somany Vice Chairman & Managing Director We are HNG Place: Kolkata Date: May 30, 2013 Glass for the Green Cause Chairman s Overview CERTIFICATE The members of Hindusthan National Glass & Industries Limited We have examined the compliance of the conditions of Corporate Governance by Hindusthan National Glass & Industries Ltd. for the year ended March 31, 2013 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was carried out in accordance with the guidance note on certification of Corporate Governance as stipulated in Clause 49 of the Listing Agreement issued by Institute of Chartered Accountants of India and limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of the opinion on the financial statements of the Company. In our opinion and to the best of information and explanations given to us, as well as according to the representations made by the Directors and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement in all material aspects excepting the framework for risk management and its controls are in the process of being formalised/updated. We further state that such compliance is neither an assurance as to the future viability of the Company, nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. VC & MD s Review Place: Kolkata Date: May 30, 2013 For Lodha and Co. (Chartered Accountants) Firm s ICAI Registration No E (H.K. Verma) Partner Membership Number: Annual Report

73 INDEPENDENT AUDITORS REPORT Trakya Cam To the Members of Hindusthan National Glass & Industries Limited Report on the Financial Statements We have audited the accompanying financial statements of Hindusthan National Glass & Industries Limited ( the Company ), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ( the Act ). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement in the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Qualified Opinion As stated in Note no of the financial statements due to inadequacy of profit, managerial remuneration to the extent of ` lacs has become in excess of the limits laid down in the Companies Act, 1956 awaiting Central Government approval. Moreover the appointment and remuneration of ` 4.76 lacs to the Executive Director is also subject to approval of Shareholders and Central Government. Pending such approvals, impact thereof on the financial statements is not ascertainable. Opinion In our opinion and to the best of our information and according to the explanations given to us, except for possible effect of the matter described in the Basis for Qualified Opinion paragraph, the financial statements read with notes thereon give the information required CSR Directors Statutory Reporting Financial Section 55 Annual Report

74 Vision We are HNG Glass for the Green Cause by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; (b) In the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and (c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditors Report) Order, 2003 ( the Order ), issued by the Central Government of India in terms of subsection (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 2. As required by section 227(3) of the Act, we report that: (a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; (b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; (c) The report on financial statements of units audited by Branch Auditors has been considered by us in preparing our report; (d) (e) (f) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account; In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 to the extent applicable; On the basis of written representations received from the Directors as on March 31, 2013, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2013, from being appointed as a Director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, Place : Kolkata Date : May 30, 2013 For Lodha and Co. (Chartered Accountants) Firm s ICAI Registration No E (H.K. Verma) Partner Membership Number: VC & MD s Review Chairman s Overview 56 Annual Report

75 Annexure to the Auditors Report (Referred to in Paragraph 1 of our Report of even date) 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. As informed, no material discrepancies were noticed on such verifications. c. During the year, the Company has not disposed off a substantial part of its fixed assets. ii) iii) iv) a. The inventory except stock lying with third parties, in few of the units 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, having regard to Para (ii) (a) above 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. In our opinion and according to the information and explanation given to us, the Company is maintaining proper records for inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material to the extent verified. 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) of the Order 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 Act. Therefore the provisions of clause 4(iii) (e) to (g) of the Order are not applicable to the Company. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items are of special nature for which alternative quotations are not available, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company. 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 Act 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 Act 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) vii) viii) ix) The Company has not accepted any deposits from the public during the year. In our opinion, the Company has an adequate internal audit system commensurate with its size and nature of its business. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by Central Government for the maintenance of cost records under section 209(1) (d) of the Act and are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete. a. The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Wealth Tax, Service Tax, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities. There Trakya Cam CSR Directors Statutory Reporting Financial Section 57 Annual Report

76 Vision 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, b. According to the information and explanations given to us, the statutory dues which have not been deposited as on March 31, 2013 on account of disputes are as under: Nature of Amount Period to which Forum where Name of the Statute Dues () the amount relates dispute is pending VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Employees' State ESIC , ESIC Court, Pune Insurance Act 1948 Damages Commissioner- Appeal, Jaipur , Dy. Commissioner , Central Excise , and Excise Duty and Addl. Commissioner of Central Excise Commissioner- Appeal Commissioner Central Excise , , The Central Excise Act , , , , CESTAT and and High Court , , and Supreme Court Asst. Commissioner Central Excise Service Tax and Dy. Commissioner Central Excise , CESTAT and Industrial Dispute Act 1947 Labour Wages Labour Court, Pune Maharashtra Recognition of and Trade Unions and Prevention Labour High Court of Unfair Labour Practices Act, Wages 1971 ( MRTU & PULP Act, 1971 ) Mathadi Act Labour and High Court Wages Bombay Sales Tax Act 1959 Sales Tax Commissioner Sales Tax,Pune Maharashtra Value Sales Tax Jt. Commissioner Added Tax Act,2002 (Sales Tax Appeal) Nashik and Maharashtra Sales Tax Tribunal, Mumbai 58 Annual Report

77 Nature of Amount Period to which Forum where Name of the Statute Dues () the amount relates dispute is pending Jt. Commissioner of Sales Tax Senior Joint Commissioner The Sales Tax Act, 1932 Sales Tax of Commercial Tax Appeal , Senior Joint and Commissioner of Sales Tax T.T. Tribunal, Dehradun Maharashtra Tax On the Levy of Entry Levy of Entry Tax Entry of Goods Into Local Tax on Natural Challenged in High Areas Act, 2002 Gas purchased Court through filing of Writ Petition, Mumbai Finance Act, 1994 Service Tax , , CESTAT and , Commissioner of and Service Tax The Electricity Act, 2003 Electricity Duty Appellate Authority, Mumbai Trakya Cam CSR x) The Company has no accumulated losses at the end of the financial year. It has incurred cash losses in the current year. However, it has not incurred cash losses in the immediately preceding financial year. xi) Having regard to the matter dealt with in the note of the financial statements being sub-judice and default as such, presently not being ascertainable, 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 or a mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the Order 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 Order 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 body corporate from bank are not prima facie prejudicial to the interest of the Company. xvi) xvii) xviii) xix) xx) xxi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised. According to the information and explanations and on an overall examination of the Balance Sheet of the Company, we report that the Company has used funds to the extent of ` 3, lacs raised on short term basis mainly on account of losses and fixed assets. 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 Companies Act The Company has not issued any secured debenture during the year. Accordingly, clause 4(xix) of the Order is not applicable to the Company. The Company has not raised any money through a public issue during the year. Based upon the audit procedures performed and information and explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit. Place : Kolkata Date : May 30, 2013 For Lodha and Co. (Chartered Accountants) Firm s ICAI Registration No E (H.K. Verma) Partner Membership Number: Directors Statutory Reporting Financial Section 59 Annual Report

78 Chairman s Overview Glass for the Green Cause We are HNG Vision Balance Sheet as at March 31, 2013 As at As at Particulars Note No. March 31, 2013 March 31, 2012 I. EQUITY AND LIABILITIES II. 1 SHAREHOLDER'S FUNDS 2.1 (a) Share Capital 2.1(a) 1, , (b) Reserves and Surplus 2.1(b) 96, , SHARE APPLICATION MONEY PENDING ALLOTMENT 2.2 1, NON-CURRENT LIABILITIES (a) Long-term borrowings , , (b) Deferred tax liabilities (Net) 2.4 2, , (c) Other long term liabilities 2.5 2, , (d) Long term provisions CURRENT LIABILITIES (a) Short-term borrowings , , (b) Trade payables , , (c) Other current liabilities , , (d) Short-term provisions , , Total 440, , ASSETS 1 NON-CURRENT ASSETS (a) Fixed assets (i) Tangible assets , , (ii) Intangible assets (iii) Capital work-in-progress 14, , (b) Non-current Investments , , (c) Long term loans and advances , , (d) Other non-current assets CURRENT ASSETS (a) Inventories , , (b) Trade Receivables , , (c) Cash and Bank Balances , , (d) Short-term Loans and advances , , (e) Other current assets Total 440, , Summary of Significant Accounting Policies 1 Notes on Financial Statements 2.1 to 2.44 The notes are an integral part of the Financial Statements. VC & MD s Review As per our report of even date For Lodha & Co. Mukul Somany Sanjay Somany Chartered Accountants Vice Chairman and Vice Chairman and Managing Director Managing Director H.K.Verma Ajay Kumar Rai Laxmi Narayan Mandhana Partner Company Secretary Sr. Vice President and Chief Financial Officer Place : Kolkata Date : May 30, Annual Report

79 Statement of Profit and Loss for year ended March 31, 2013 For the For the year ended year ended Particulars Note No. March 31, 2013 March 31, 2012 REVE NUE Revenue from operations (Gross) , , Less: Excise Duty 17, , I. Revenue from operations (Net) 182, , II. Other Income III. Total Revenue (I + II) 183, , EXPENSES Cost of materials consumed , , Changes in inventories of finished goods, work-in-progress and stock-in-trade 2.23 (15,424.59) (6,097.94) Employee benefit expenses , , Other expenses , , IV. Total Expenses 167, , V. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) (III - IV) 15, , Depreciation and amortization expense , , Transferred from Revaluation Reserve 2.1(b) (162.72) (190.01) (VI) 19, , VII. Finance costs , , VIII. Profit / (Loss) before tax (V-VI-VII) (24,619.49) 9, IX. Tax expense: (1) Current tax (2) Deferred tax 2.4 (7,439.20) Total Tax Expenses (7,439.20) X. Profit/ (Loss) for the year (VIII-IX) (17,180.29) 9, XI. Earnings per equity share: 2.28 (1) Basic (19.67) (2) Diluted (19.67) Number of shares used in computing earnings per share (1) Basic 87,338,565 87,338,565 (2) Diluted 87,338,565 87,338,565 Summary of Significant Accounting Policies 1 Notes on Financial Statements 2.1 to 2.44 The notes are an integral part of the Financial Statements. Trakya Cam CSR Directors Statutory Reporting As per our report of even date For Lodha & Co. Mukul Somany Sanjay Somany Chartered Accountants Vice Chairman and Vice Chairman and Managing Director Managing Director H.K.Verma Ajay Kumar Rai Laxmi Narayan Mandhana Partner Company Secretary Sr. Vice President and Chief Financial Officer Place : Kolkata Date : May 30, 2013 Financial Section 61 Annual Report

80 Cash Flow Statement for year ended March 31, 2013 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision For the For the year ended year ended Particulars Note No. March 31, 2013 March 31, 2012 Cash Flow from operating activities Profit/ (Loss) before tax (24,619.49) 9, Non-cash adjustments to reconcile profit before tax to net cash flows Depreciation/amortisation 19, , Loss/(profit) on sale/discard of fixed assets Unrealised foreign exchange (gain)/ loss (328.19) Bad Debts and Provision for Doubtful Debts (0.52) Provision for loss on Derivative Transactions Interest Income (289.95) (109.31) Dividend Income on Long term Investments (40.44) (26.99) Net loss/(gain) on sale of Current Investments (16.55) (17.04) Finance costs 20, , Liability no longer required written back (762.60) (196.66) Operating Profit before working capital changes 15, , Movement in working capital : Increase/(decrease) in trade payables 19, , Increase/(decrease) in long-term provisions (641.38) Increase/(decrease) in short-term provisions (368.59) Increase/(decrease) in other long-term liabilities (458.80) 1, Increase/(decrease) in other current liabilities 7, , Decrease/(increase) in trade receivables (14,774.39) (9,641.86) Decrease/(increase) in inventories (19,707.57) (9,687.32) Decrease/(increase) in long-term loans and advances (2,970.81) Decrease/(increase) in short-term loans and advances (954.48) (10,319.83) Decrease/(increase) in other non-current assets (2.78) Decrease/(increase) in other current assets Decrease/(increase) in bank deposits 1.01 (7.22) with maturity more than 3 months and less than 12 months Cash generated from/(used in) operations 6, , Direct taxes paid (net of refunds) (245.59) Net Cash Flow from/(used in) operating activities (A) 6, , Cash Flow from investing activities Purchase of fixed assets, including intangible assets, (42,342.09) (126,427.08) CWIP and capital advances Proceeds from sale of fixed assets Proceeds from sale of non-current investment Purchase of non-current investment 0.00 (6,483.60) Investment in bank deposit with maturity of more than 12 months (2.88) Purchase of current investment (6,500.00) Share Application money paid (3,755.00) (3,180.00) Proceeds from sale/maturity of current investments 6, Interest received Dividend received from subsidiary company Dividend received from others Net Cash Flow from/(used in) investing activities (B) (45,734.75) (135,871.41) 62 Annual Report

81 Cash Flow Statement (Contd.) for year ended March 31, 2013 For the For the year ended year ended Particulars Note No. March 31, 2013 March 31, 2012 Cash Flow from financing activities Receipt of Share Application money 1, Proceeds from long-term borrowings 44, , Repayment of long-term borrowings (7,052.73) (8,024.95) Proceeds from short-term borrowings 24, , Interest paid (19,638.62) (8,129.90) Dividend paid on Equity Shares including Dividend Distribution Tax (1,260.61) (1,262.84) Net Cash Flow from/(used in) financing activities (C) 42, , Net increase/(decrease) in cash and cash equivalents (A+B+C) 2, Cash and cash equivalents at the beginning of the year 1, Cash and cash equivalents at the end of the year 3, , Components of Cash and Cash Equivalents Balances with banks: In current accounts In cash credit accounts 1, In deposit accounts (With original maturity of less than 3 months) 2, In dividend accounts Cheques in hand 2.15 Cash on hand Total cash and cash equivalents , , Summary of Significant Accounting Policies 1 The above Cash Flow Statements has been prepared under the "Indirect Method" as set out in the Accounting Standard 3 on "Cash Flow Statements" as prescribed by the Companies (Accounting Standard) Rules, 2006 Trakya Cam CSR Directors As per our report of even date For Lodha & Co. Mukul Somany Sanjay Somany Chartered Accountants Vice Chairman and Vice Chairman and Managing Director Managing Director H.K.Verma Ajay Kumar Rai Laxmi Narayan Mandhana Partner Company Secretary Sr. Vice President and Chief Financial Officer Statutory Reporting Place : Kolkata Date : May 30, 2013 Financial Section 63 Annual Report

82 Summary of Significant Accounting Policies and Notes on Financial Statements VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision 1. SIGNIFICANT ACCOUNTING POLICIES a. Accounting Convention The financial statements, except in respect of certain fixed assets, which are stated at fair value or revalued amounts, have been prepared on the basis of the historical cost and on the accounting principles of a going concern. The financial statements have been prepared in accordance with the provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (Accounting Standards) Rules, b. Use of Estimates The preparation of financial statements require Management to make estimates and assumption that affect the reported amount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reported amounts of revenue and expenses during the year. Difference between the actual results and the estimates are recognised in the year in which the results are known /materialised. c. Fixed Assets i. Fixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have been revalued or at fair value as the case may be. ii. All direct expenditure relating to construction of project are capitalised as "Pre-operative & Trial Run Expenses (pending allocation)". Administrative and general overheads which are specifically attributable to the construction of the project and /or bringing it to the working conditions for intended use (net of revenue during the said period) are also capitalised as ''Pre-operative & Trial Run Expenses (Pending allocation)". d. Depreciation and Amortization Tangible Assets i. 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 on straight line method. ii. iii. iv. Certain Plant and Equipments have been considered as continuous process plant as defined under Schedule XIV to the Companies Act, 1956 on the basis of technical evaluation. Depreciation on increase in value of Fixed Assets due to revaluation is provided on the basis of remaining useful life as estimated by the valuer on the straight line method and is transferred from Revaluation Reserve to Statement of Profit and Loss. Depreciation on incremental cost arising on account of exchange difference is amortised on straight line method over the remaining life of the assets. v. Second hand machines are depreciated on straight line method based on their useful lives as estimated by independent technical experts. Intangible Assets Computer Softwares are amortised on straight line 33.33% over a period of three years. Fixed Assets at Nashik Plant are estimated to have lower residual lives than that envisaged as per the rates provided in Schedule XIV of the Companies Act, Depreciation has been provided based on the estimated shorter residual lives as follows: 64 Annual Report

83 Rates as prescribed by Schedule XIV to the Rates of Depreciation Particulars of Fixed Assets Companies Act, 1956 applied on assets Buildings (other than factory buildings) 1.63 % p.a % p.a. Factory Buildings 3.34 % p.a % p.a. Plant and Equipments Used for single shift operations 4.75 % p.a % p.a. Continuous Process Plant 5.28 % p.a % p.a. Used for Triple Shift operations % p.a % p.a. Furniture and Fixtures 6.33 % p.a % p.a. Computers % p.a % p.a. e. Impairment Fixed Assets are reviewed at each Balance Sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assets belonging to Cash Generating Unit (CGU) exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorata basis. f. Investments Non current investments are stated at cost, less provision for diminution in value other than temporary, if any. Current investments are valued at cost or fair value whichever is lower. g. Inventories Inventories are valued at the lower of cost or estimated net realisable value. In respect of raw materials, stores and spare parts, fuel and packing materials the cost includes the taxes and duties other than those recoverable from taxing authorities and other expenses incurred for procuring the same. In respect of finished goods and work-in-process the cost includes manufacturing expenses and appropriate portion of overheads. The cost of inventories is determined on the weighted average basis. h. Foreign Exchange Transactions and Derivatives Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities at the year end are translated using closing exchange rates. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transaction during the year are recognised as revenue or expenses in the Statement of Profit and Loss except in respect of non current liabilities related to fixed assets/capital work-in-progress in which case, these are adjusted to the cost of respective fixed assets/ capital work-in-progress. Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are recognised in the period in which they arise and the difference between the forwards rate and exchange rate at the date of transaction is recognised as revenue/expense over the life of the contract. Keeping in view the announcement of The Institute of Chartered Accountants of India dated March 29, 2008 regarding accounting for derivatives, mark to market losses on all other derivatives contracts (other than forward contracts dealt as above) outstanding as at the year end, are recognised in the financial statements. i. Revenue Recognition i) All expenses and revenues are accounted for on mercantile basis except otherwise stated. ii) Revenues from export incentives, insurance and other claims etc. is recognised on the basis of certainties as its utilisation and related realisation. iii) Sales are inclusive of packing charges and Excise Duty but exclusive of Value Added Tax, rebates, discounts and claims etc. Trakya Cam CSR Directors Statutory Reporting Financial Section 65 Annual Report

84 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision j. CENVAT/Value Added Tax (VAT) Credit CENVAT/VAT credit whenever availed on fixed assets is set off with the cost of the assets. Other CENVAT/ VAT credit wherever availed is adjusted with the cost of purchases of raw material or stores as the case may be. k. Employee Benefits Employee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Plan for its employees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fund which are fully funded and administered by the Trustees/Government. The Company contributes to the Employees Pension Scheme, 1995 for certain categories of employees. Contributions are recognised in the Statement of Profit and Loss on accrual basis. Long-term employee benefits under defined benefit plans and other long term employee benefits are determined at the close of each year at the present value of the amount payable using actuarial valuation techniques. Actuarial gains and losses are recognised in the year when they arise. l. Research and Development Revenue expenditure on Research and Development is charged to the Statement of Profit and Loss in the year in which it is incurred. m. Subsidies and Grants Cash Subsidy related to fixed assets to the extent received is adjusted to the cost of respective fixed assets. Subsidy related to the total investment in the project is treated as Capital Reserve. Other Government grants including incentives etc. are credited to Statement of Profit and Loss or deducted from the related expenses. n. Borrowing Costs Borrowing costs that are attributable to the acquisition/construction of fixed assets are capitalised as part of the cost of respective assets. Other borrowing costs are recognised as an expense in the year in which they are incurred. o. Income Tax Provision for Tax is made for current tax and deferred tax. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capable of reversal in subsequent periods are recognised using tax rates and tax laws, which 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 be available against which such deferred tax assets will be realised. In case of carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is virtual certainty that such deferred tax assets can be realised against future taxable profits. p. Lease Where the Company is the lessee, finance leases which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against revenue. Lease management fees, legal charges and other initial direct costs are capitalised. Lease rentals in respect of assets taken under finance lease up to March 31, 2081 are amortised over the total term of the lease (including extended secondary lease term). Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term Annual Report

85 q. Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosed in the financial statements. Contingent Liabilities, if material, are disclosed by way of notes. r. Measurement of EBITDA As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) as a separate line item on the face of the Statement of Profit and Loss. The Company measures EBITDA on the basis of profit/(loss) from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense. Trakya Cam 2.1(a) SHARE CAPITAL As at As at Particulars March 31, 2013 March 31, 2012 Authorised Share Capital 2,55,75,00,000 (2,55,75,00,000) Equity Shares of ` 2/- each 51, , CSR Issued, Subscribed and Fully Paid - up Share Capital 8,73,38,565 (8,73,38,565) Equity Shares of ` 2/- each 1, , Out of above 3,21,21,725 (3,21,21,725) Equity Shares, have been issued pursuant to a Scheme of Amalgamation and arrangement for consideration other than cash. 1, , (a).1 The Company has only one class of Equity Shares having a par value of ` 2 each. Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding. During the year ended March 31, 2012, the Company has recognised a dividend of ` 1.50 per share, as distribution to Equity Shareholder. The Board, in its meeting on May 30, 2013 proposed a final dividend of ` 0.10 per equity share. The proposal is subject to necessary approvals from certain lenders and the approval of shareholders at the ensuing Annual General Meeting. 2.1(a).2 There is no movement in the number of shares outstanding at the beginning and at the end of the reporting period. 2.1(a).3 Details of the Shareholders holding more than 5% shares along with number of shares held Number of Number of Shares held Shares held Name of Share Holders March 31, 2013 March 31, 2012 Directors Statutory Reporting Brabourne Commerce Pvt. Ltd. 21,414,485 21,414,485 Spotlight Vanijya Ltd. 16,199,975 16,199,975 Dilip S Damle (Trustee HNG and ACE Trust) 14,641,600 14,641,600 Ironwood Investment Holdings 6,348,025 6,348,025 Rungamattee Trexim Pvt. Ltd. 4,420,550 4,420,550 Spotme Tracon Pvt. Ltd. 4,420,545 4,420,545 Financial Section 67 Annual Report

86 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision Ref As at As at Particulars Note No. March 31, 2013 March 31, (b) RESERVES AND SURPLUS Capital Reserves As per last Balance Sheet 5, , Add: Amount credited during the year 2.1(b).1 5, , Securities Premium Account As per last Balance Sheet 5, , Less: Deferred Tax Liability (2,419.91) 5, , Debenture Redemption Reserve As per last Balance Sheet 5, , Less: Transfer to Surplus (2,500.00) Add: Transfer from Surplus 5, , , Revaluation Reserve As per last Balance Sheet a c 9, , Less: Transfer to Statement of Profit and Loss (162.72) (190.01) Less: Adjustments on discarding/sale of assets (0.37) (43.58) 9, , General Reserve As per last Balance Sheet 77, , Add: Transfer from Surplus 1, Less: Transfer to Surplus (6,740.22) Less: Book Value of Beneficial Interest in own shares held in Trusts 2.1 (b) (b).3 (6,014.85) 70, , Surplus As per last Balance Sheet 10, , Add: Net Profit/(Loss) after tax transferred from Statement of Profit and Loss (17,180.29) 9, Add: Transfer from Debenture Redemption Reserve 2, Add: Transfer from General Reserve 6, Add: Provision for Proposed Dividend including Dividend Distribution Tax written back - On Foregoing of right to receive dividend by HNG Trust and ACE Trust 2.1(b) Amount available for appropriation , Appropriations: Proposed Equity Dividend 2.1(a) , Tax on proposed Equity Dividend Amount transferred to General Reserve 1, Amount transferred to Debenture Redemption Reserve 5, Net Surplus in the Statement of Profit and Loss 10, Total Reserves and Surplus 96, , (b).1 Receipt from the Trusts on account of beneficial interest will be credited to the Capital Reserve. 2.1(b).2 In terms of Scheme of Arrangement pursuant to the Order of Hon'ble High Court of Calcutta dated April 7, 2008 and by the Hon'ble High Court of Delhi dated March 19, 2008 (the Scheme) sanctioning the amalgamation of Ace Glass Containers Limited (AGCL) with the Company, 13,68,872 and 21,41,448 equity shares of ` 10/- each of the Company issued in lieu of the shares of the Company held by AGCL and shares 68 Annual Report

87 of AGCL held by the Company were transferred to ACE Trust and HNG Trust respectively in earlier years for the sole benefit of the Company. Out of the shares so transferred 68,44,360 and 77,97,240 equity shares of ` 2/- each of the Company (after subdivision of 1 equity share of ` 10/- each into 5 equity shares of ` 2/- each w.e.f. 13/11/2009) are held by ACE Trust and HNG Trust respectively as on March 31, (b).3 In view of the shares being held for the sole benefit of the Company as mentioned above, the book value of ` 6, lacs of these investments have been shown as deduction from Shareholders Fund and thereby General Reserve is adjusted to that extent. 2.1(b).4 In respect of 1,46,41,600 Equity Shares held by HNG Trust and ACE Trust, the Trustees had informed the Company of their decision to forego their rights to dividend on shares held by them for the year and accordingly dividend was not declared on these shares. Consequently, proposed dividend and dividend distribution tax amounting to ` lacs and ` lacs respectively has been written back during the year. 2.2 SHARE APPLICATION MONEY PENDING ALLOTMENT The Shareholders in its meeting held on December 18, 2012 had approved the proposal of allotment of 110,00,000 equity shares of ` 2 each for cash at price of ` 200, including a premium of ` 198 each aggregating to ` 220,00,00,000 to M/s Rungamattee Trexim Private Limited, Spotlight Vanijya Limited and Spotme Tracon Limited on a preferential basis. The Company has received share application money of ` 1, lacs for 7,30,000 equity shares.equity Shares have to be allotted within 15 days from the receipt of all necessary approvals from statutory authorities (Stock Exchanges wherever Company s Shares are listed, in this case). The Company has so far received approval only from Bombay Stock Exchange and National Stcok Exchange and yet to receive in principal approval from Calcutta Stock Exchange (CSE). Only on receipt of the said approval from CSE that the necessary step will be taken for allotment within the stipulated time period. The Company has sufficient Authorised Share Capital as on March 31, LONG TERM BORROWINGS As at March 31, 2013 As at March 31, 2012 Non Current Non Current Particulars Ref Note No. Current Maturities Current Maturities SECURED LOANS a) Debentures (i) 10.40% Redeemable Non Convertible Debentures privately placed with Life Insurance Corporation of India 20, , (ii) 10.75% Redeemable Non Convertible Debentures privately placed with General Insurance Corporation of India 2, , b) Term Loans From Banks 2.3.2(a) & , , , , From Financial Institution & , , From Other & , c) Vehicle Finance Loan & From Bank , From Others UNSECURED LOANS d) Term Loans From Bank (a), (b) & , From Others & , e) Deferred Payment Liabilities Sales Tax Deferrment Loan , , , , , , Trakya Cam CSR Directors Statutory Reporting Financial Section 69 Annual Report

88 2.3 LONG TERM BORROWINGS (Contd) VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision Repayment in Financial Year Security and repayment details of Non Convertible Debentures 10.40% Secured Non Convertible 10, Debentures allotted on are due for redemption at par at the end of the tenure i.e However, there is a put and call option available to the issuer/investor which can be exercised at the end of seventh year from the deemed date of allotment 10.40% Secured Non Convertible 10, Debentures allotted on are due for redemption at par at the end of the tenure i.e However, there is a put and call option available to the issuer/investor which can be exercised at the end of seventh year from the deemed date of allotment 10.75% Secured Non Convertible Debentures allotted on are due for redemption at par in three equal instalments at the end of 5th, 6th & 7th year from the deemed date of allotment. All the aforesaid Non Convertible Debentures are secured by first charge ranking pari-passu on all immovable properties by way of equitable mortgage and hypothecation of all moveable properties both present and future of the Company, save and except specific assets exclusively hypothecated in favour of respective lenders (a) Repayment details of term loans from Foreign 10.25% % - Banks oustanding as on March 31, 2013 Currency 11.50% 12.25% Total are as follows: Term Loan , , , , , , , , , , , , , , , , , , , , , , , , , , , , Total 56, , , , (b) However, there is a put and call option available to the investor which can be exercised at the end of 1st year from the date of first disbursement and every year thereafter Annual Report

89 2.3.3 Repayment details of term loans from Financial Institutions outstanding as on March 31, 2013 are as follows Foreign Currency 10.25% % - Term Loan 11.50% 12.25% Total , , , , , , , , , , , Total 13, , , , Repayment details of term loans from Others outstanding as on March 31, 2013 are as follows: 11.51% % Total , , , , , , Total 9, , Trakya Cam CSR Deferred Sales Tax loans outstanding as on March 31, 2013 are interest free and are payable as per the repayment schedule as follows: Total Total 1, Term loans from Banks and Financial Institutions are secured by first charge ranking pari-passu on all immovable properties by way of equitable mortgage and hypothecation of all moveable properties both present and future of the Company and second charge ranking pari-passu on entire current assets of the Company, both present and future, save and except specific assets exclusively hypothecated in favour of respective lenders. Vehicle Finance Loans are secured against fixed assets obtained under Finance Lease arrangements Repayment Details of Vehicle Finance Loan from Bank outstanding as on March 31, 2013 are as follows: Total Total 1, Repayment Details of Vehicle Finance Loan from Others outstanding as on March 31, 2013 are as follows: Total Term Loans is against non disposal undertaking and power of attorney given by the HNG & ACE Trusts on the shares of the Company held by them. Directors Statutory Reporting Financial Section Term Loans is against pledge of shares of the Company held by HNG & ACE Trusts Annual Report

90 Ref As at Current Year As at Particulars Note No. March 31, 2013 Charge/(Credit) March 31, 2012 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision 2.4 DEFERRED TAX LIABILITIES (Net) Deferred Tax Liabilities Timing Difference w.r.t. fixed assets 26, , , Gross Deferred Tax Liability 26, , , Deferred Tax Assets Expenses allowable on payment basis Timing difference w.r.t. fixed assets 21, , Provision for loss on derivative transaction 1, , Provision for Doubtful Debts Gross Deferred Tax Asset 23, , , Net Deferred Tax Liability 2, (7,439.20) 9, Timing difference with respect to depreciation differential has been considered to the extent of deferred tax liability. As a matter of prudence, the remaining amout of the differential resulting in deferred tax asset has been ignored In terms of Scheme of Amalgamation under section 391 to 394 of the Companies Act, 1956 as sanctioned by the Hon ble High Court of Calcutta vide its Order dated April 7, 2008 and by Hon ble High Court of Delhi vide its Order dated March 19, 2008, deferred tax liability is adjusted to Securities Premium Account. Accordingly, such liability of ` Nil lacs (Previous year ` 2, lacs) for the year has been adjusted to Securities Premium Account. Ref As at As at Particulars Note No. March 31, 2013 March 31, OTHER LONG TERFM LIABILITIES Other Liabilities Premium on Forward Contract Payable on account of Forward Contract Deposits/Retention from Customers etc. 1, , , , LONG TERM PROVISIONS Provision for Employee Benefits SHORT TERMF BORROWINGS Secured Loans Working Capital Facilities From Banks repayable on demand , , Buyer's Credit , , Unsecured Loans From Bodies corporate 6, , , Note: Working Capital Facilities (fund based and non fund based and acceptances as referred to in Note no below) from banks are secured by hypothecation of entire current assets of the Company, both present and future and second charge on entire fixed assets of the Company in favour of consortium bankers led by State Bank of India. 2.8 TRADE PAYABLES Payables for goods and services & , , , , Payable for goods and services includes acceptances 2, , Annual Report

91 2.8.2 Disclosure of trade payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" (the Act). In certain cases there are delays in payment made to such suppliers. Total Overdue amount out of principal amount outstanding at the end of the year is ` lacs (Previous Year ` NIL). Based on above the relevant disclosures u/s 22 of the Act are as follows: March 31,3013 March 31, Principal amount outstanding at the end of the year Interest amount due at the end of the year Interest paid to suppliers Ref As at As at Particulars Note No. March 31, 2013 March 31, OTHER CURRENT LIABILITIES Current maturities of long term debt , , Current maturities of vehicle finance loan Interest accrued but not due on borrowings 1, , Interest accrued and due on borrowings Unpaid dividend * Other payables 22, , Premium on Forward Contract 1, Statutory Dues 1, Excise Duty liability on Closing Stock 3, , Directors commission payable 6.98 Deposits/Retention from Customers/Capital Creditors etc. 11, , Advance from Customers 3, Book Overdraft Others , , Trakya Cam CSR Directors * This is not due for payment to Investor Education and Protection Fund SHORT TERM PROVISIONS Provision for Employee Benefits , Proposed Dividend on Equity Shares 2.1(a) , Tax on Dividend Income Tax 4, , Wealth Tax Others 3, , Provision for Derivative Transactions (Refer Note ) 3, , Others , , The Company had entered into certain foreign exchange transactions in earlier years which are disputed by the Company. The Company has been legally advised that these contracts are not permissible derivative transactions and therefore void. During the year, an arbitration award upholding the claim (including interest) of ` 4, lacs against the Company in relation to these very transactions has been made, which the Company has contested before the Hon ble High Court of Bombay. However pending final decision on the matter, as a matter of prudence the said claim alongwith interest thereon aggregating to ` 3, lacs (including ` 3, lacs till previous year) has been made in the financial statements. Statutory Reporting Financial Section 73 Annual Report

92 VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG Vision 2.11 FIXED ASSETS GROSS BLOCK DEPRECIATION/AMORTIZATION (Refer Note ) NET BLOCK Book Book Sl. Value at Value at Upto For the Upto As on As on No Particulars Ref Additions Deductions Year Deductions TANGIBLE 1 Freehold Land 13, , , , Leasehold Land , , , , Buildings , , , , , , , , Leasehold Buildings Plant and Equipments 159, , , , , , , , , , Furniture and Fixtures Vehicles 4, , , , , , Office Equipments , , , , , , , , , , INTANGIBLE 9 Computer Softwares 1, , , , , , Total 210, , , , , , , , , , Previous Year 177, , , , , , , , , Depreciation for the year includes ` lacs (Previous Year ` lacs) transferred to Pre-Operative Expenses and consequently capitalised during the year Building includes ` lacs for acquiring Equity Shares in a Body Corporate. By virtue of acquiring the Shares, the Company has right to use and occupy certain office space Leasehold Land includes ` 2, lacs in respect of which lease deeds in favour of the Company are in the process of being registered (a) Land and Buildings of Rishra and Bahadurgarh units were revalued by an approved valuer on and on on current replacement cost basis. Accordingly net amount was added to the book value of the respective assets with corresponding credit to Revaluation Reserve. 10, , (b) Plant and Equipment of Rishra and Bahadurgarh units were revalued by an approved valuer on on current replacement cost basis. Accordingly net amount was added to the book value of the respective assets with corresponding credit to Revaluation Reserve. 4, , (c) Depreciation transferred from Revaluation Reserve to Statement of Profit and Loss Refer Note 2.3 to financial statements in respect of charges created Annual Report

93 Ref As at As at Particulars Note No. March 31, 2013 March 31, INVESTMENTS Non-Current Investments Trade (valued at cost unless stated otherwise) Unquoted Equity Instruments: Capexil Agencies Limited 5 (5) Shares at ` 1000 each, fully paid up Non-Trade (valued at cost unless stated otherwise) Unquoted Equity Instruments: Subsidiaries - Fully paid-up Equity Shares HNG Global GmbH , , ,000,000 (10,000,000) of Face Value Eur 1 each Glass Equipment (India) Limited ,400 (26,400) of Face Value ` 100 each Quality Minerals Limited ,384 (9,384) of Face Value ` 100 each Associates - Fully paid-up Equity Shares of Face Value ` 10 each HNG Float Glass Limited 11, , ,000,000(115,000,000) Other Bodies Corporate - Fully paid-up Equity Shares Brabourne Commerce Private Limited (107) of Face Value ` 10 each The Calcutta Stock Exchange Association Limited ,364 (8,364) of Face Value of ` 1 each Government Securities National Savings Certificates , , Aggregate amount of unquoted investment 18, , Trakya Cam CSR Directors Investment held by the Company in HNG Global GmbH are pledged in the favour of the term lender for HNG Global GmbH in respect of its borrowing facility. Ref As at As at Particulars Note No. March 31, 2013 March 31, LONG TERM LOANS AND ADVANCES Unsecured, Considered good Capital Advances Against Fixed Assets 1, , Security Deposits 1, Loans and Advances to Related parties Share Application Money 6, , Loans and Advances to employees MAT Credit entitlement , , Other Loans and advances 1, , Receivable on account of Forward Contract , Input VAT Credit - Deferred Prepaid Expenses , , MAT (Minimum Alternate Tax) Credit Entitlement has been recognised on the basis that the Company will have normal taxable income within the specified period Input VAT Credit - Deferred can be utilised only after repayment of corresponding amount of Sales Tax Deferred Loan. Statutory Reporting Financial Section 75 Annual Report

94 Vision Ref As at As at Particulars Note No. March 31, 2013 March 31, OTHER NON CURRENT ASSETS Interest receivable 2.78 Deposits with Bank with original maturity of more than 12 months Deposit with Banks are pledged with the Government Authorities In the opinion of the Management/Board of Directors, the "Loans and Advances" have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. VC & MD s Review Chairman s Overview Glass for the Green Cause We are HNG 2.15 INVENTORIES (Valued at lower of Cost or Net Realisable Value) (Value taken and certified by the Management) Raw Materials (Including in transit ` lacs, Previous Year ` lacs) 5, , Work in Progress Finished Goods (Including in transit ` Nil,Previous Year `Nil) 30, , Stores and Spare (Including in transit ` lacs,previous Year ` lacs) 11, , Packing Materials (Including in transit ` 8.60 lacs,previous Year ` NIL ) 1, , , , Inventories of Stores and Spare Parts include certain slow moving, non-moving and obsolete items. A provision of ` lacs (Previous Year ` lacs ) towards obsolescence for such slow moving, non-moving and obsolete items are carried in the books and the Management is of the opinion that the same is adequate and no further provision is required thereagainst Inventories includes items lying with third parties Refer Note 2.3 to financial statements in respect of charge created TRADE RECEIVABLES Unsecured Trade receivables outstanding for a period exceeding six months from the date they are due for payment Considered Good 5, Considered Doubtful Less: Provision for Doubtful Debts (457.54) (449.55) 5, Others Considered Good 43, , , , The accounts of some of the customers are pending reconciliation/confirmation Provision as carried in the books are against doubtful debts and in the opinion of the Management the same is adequate and no further provision is required thereagainst Annual Report

95 Ref As at As at Particulars Note No. March 31, 2013 March 31, CASH AND BANK BALANCES (As certified by the Management) Cash and Cash Equivalents Balances with Banks: In current accounts In cash credit accounts 1, In deposit accounts (With original maturity of less than 3 months) 2, In dividend accounts Cheques on hand 2.15 Cash on hand , , Other Bank Balances In deposit accounts (With original maturity of less than 12 months) , , Trakya Cam CSR Deposit with Banks are pledged with the Government Authorities. Ref As at As at Particulars Note No. March 31, 2013 March 31, SHORT TERM LOANS AND ADVANCES Unsecured, Considered good Security Deposits Loans and Advances to Related parties 2.35 Other Recoverable 4.80 Loans to employees Advance to Suppliers 1, , Advance income Tax (Including refund receivables) 4, , Advance Fringe Benefit Tax Balances/Deposit with Govt. Authorities , , Other Loans and advances 4, , Prepaid expenses Receivable on account of Forward Contract 2, Others & , , Considered Doubtful Advance to Suppliers Less: Provision for Doubtful loans and advances (182.15) (181.36) Balances/Deposit with Govt. Authorities Less: Provision for Doubtful loans and advances (57.74) (49.95) 23, , Directors Statutory Reporting Financial Section 77 Annual Report

96 Vision We are HNG Maximum Outstanding Balance Particulars as at outstanding March 31, 2013 during the year Disclosure pursuant to clause 32 of the Listing Agreement Loans and Advances in the nature of loans where there is : (i) No Interest or interest below the rates specified in Section 372A of Companies Act, 1956* (ii) Repayment beyond seven years or no repayment schedule (iii) Repayment on Demand * Advance to employees pursuant to general business practice and employees welfare Includes ` lacs (Previous Year ` lacs) deposited against demand raised by the Sales Tax Authority Includes ` 1, lacs (Previous Year: ` 1, lacs) recoverable from certain parties. The Company has re-called the said amount from the parties and the matter has been referred for arbitration for adjudication. Pending this, the amount has been considered good and recoverable Includes Insurance Claim Receivable ` lacs (Previous Year: ` lacs). Glass for the Green Cause Chairman s Overview VC & MD s Review For the For the Ref year ended year ended Particulars Note No. March 31, 2013 March 31, OTH ER CURRENT ASSETS Interest receivable Fixed Assets held for disposal Valued at lower of net book value or estimated net realisable value REVENUE FROM OPERATIONS Sale of Products Finished Goods 198, , Other Operating Revenue Scrap Sales Insurance Claim received Liabilities no longer required written back Others Revenue from Operations (Gross) 199, , Less : Excise Duty 17, , Revenue from Operations (Net) 182, , OTHER INCOME Interest Income Dividend Income on Non current Investments Net Gain on sale and purchase of Current Investments Rent and Hire Charges Exchange Gain (Net) Miscellaneous Income Dividend Income on Non Current Investments includes Dividend from Subsidiaries Annual Report

97 For the For the Ref year ended year ended Particulars Note No. March 31, 2013 March 31, COST OF MATERIAL CONSUMED Raw Materials Consumed , , , , Trakya Cam Profit or loss on sale of raw materials has been adjusted in consumption. For the year ended For the year ended Particulars March 31, 2013 March 31, CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE Closing Stock Finished Goods 30, , Work-in-Progress , , Less: Opening Stock Finished Goods 12, , Work-in-Progress , , Transfer from Pre-Operative Expenses - Refer Note 2.31 Finished Goods 3, Work-in-Progress , , , (15,424.59) (6,097.94) CSR Directors For the For the Ref year ended year ended Particulars Note No. March 31, 2013 March 31, EMPLOYEE BENEFIT EXPENSES Salaries and Wages 14, , Contribution to Provident and Other Funds 1, , Workmen and Staff Welfare Expenses , , Refer note For Remuneration paid to Vice Chairman & Managing Directors and Executive Director. Statutory Reporting Financial Section 79 Annual Report

98 Vision We are HNG Glass for the Green Cause Ref For the year ended For the year ended Particulars Note No. March 31, 2013 March 31, OTHER EXPENSES Stores and Spare Parts Consumed , , Power and Fuel 77, , Packing Material Consumed and Packing Charges 14, , Rent Rates and Taxes Repairs: Buildings Plant and Machinery Others Freight outwards, Transport and Other Selling Expenses 1, , (Net of realisation ` 4, lacs, previous year ` 5, lacs) Commission on Sales Insurance Excise Duty on increase/(decrease) of Stock 1, Bad Debts/Advances Written Off Less: Provision for Doubtful Debts/advances written back (50.99) 0.57 (304.03) Provision for Doubtful Debtors/Advances Charity and Donation Loss on Sale/Discard of Fixed Assets Provision For Loss on Derivative Transaction Other Miscellaneous Expenses , , , , Profit or loss on sale of Stores has been adjusted in consumption. Chairman s Overview VC & MD s Review For the For the Ref year ended year ended Particulars Note No. March 31, 2013 March 31, Other Miscellaneous Expenses include : a) Payment to Auditors To Statutory Auditor: Audit Fees Tax Audit Fees Management Services & Certification Work Reimbursement of expenses To Branch Auditors: Audit Fees Management Services & Certification Work Reimbursement of expenses b) Directors Travelling Expenses c) Directors Sitting Fees d) Non-Executive Director Commission Annual Report

99 For the For the Ref year ended year ended Particulars Note No. March 31, 2013 March 31, FINANCE COSTS Interest Expense , , Other borrowing Costs 1, , , , Interest subsidy towards Interest on term loan receivable under State Investment Promotion Policy has been adjusted with Interest on term loan paid Trakya Cam CSR For the year ended For the year ended Particulars March 31, 2013 March 31, TAX EXPENSES Minimum Alternate Tax 1, Less: MAT Credit Entitlement (1,450.00) Tax for earlier years For the For the Ref year ended year ended Directors Particulars Note No. March 31, 2013 March 31, EARNINGS PER SHARE (EPS) The following reflects the profit and Share data used in the basic and diluted EPS computation: Profit /(Loss) after Tax (17,180.29) 9, Less: Dividend on Cumulative Redeemable Preference Shares and Tax thereon Net Profit/(Loss) for calculation of basic EPS (a) (17,180.29) 9, Weighted Average no.of Equity shares in calculating basic EPS (b) 87,338,565 87,338,565 Effect of Dilution: Share Application Money (Nos) (c) 116,000 Potential Weighted average number of equity shares in calculating diluted EPS [(d)=(b)+(c)] (d) 87,454,565 87,338,565 Basic and Diluted EPS (a/b)-[in `] (19.67) The Company has received share application money during the year which is pending allotment. On allotment, the likely impact on EPS is anti dilutive and hence, not considered above for computation of diluted EPS. Statutory Reporting Financial Section 81 Annual Report

100 Chairman s Overview Glass for the Green Cause We are HNG Vision As at As at Particulars March 31, 2013 March 31, CONTINGENT LIABILITIES NOT PROVIDED FOR (i) Guarantee furnished to bank on behalf of Subsidiaries 43, , (ii) Guarantee furnished to a bank on behalf of an entity over which directors of the Company have significant influence 1, , (iii) Sales Tax matter under appeals 1, , (iv) Excise Duty and Octroi demand issued against which the Company has preferred appeals and which in the opinion of the Management are not tenable. 1, , (vi) Cases pending with labour courts (to the extent ascertainable) (vi) 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 (vii) Other Claims against the Company not acknowledged as debt (viii) Octroi on Transportation of natural gas through pipeline (ix) Local Area Development Tax Demand 2, , (x) Demand of Stamp Duty against leasehold land purchased from Haryana Sheet Glass Ltd.* (xi) Disputed Entry Tax for the Financial Year , , , , and ** (xii) Show cause notice from Central Excise Financial Year *** 9.74 (xiii) Export Commitment against EPCG * Appeal filed before Tax Board, Rajasthan ** Challenged by the other body and pending before Hon'ble Supreme Court. *** Appeal filed before Commissioner- Appeal - Jaipur On the basis of current status of individual cases and as per the legal advices received, 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. (iii) to (xii) as mentioned above is dependent upon outcome of final judgment /decision CAPITAL AND OTHER COMMITMENTS a) Capital commitments for procurement of capital assets 16, , (Net of advance of ` lacs PY ` lacs) VC & MD s Review 82 Annual Report

101 As at As at Particulars March 31, 2013 March 31, CAPITALISATION OF EXPENDITURE During the year, the Company has capitalised the following expenses of revenue nature incurred for construction of fixed assets and trial run, to the cost of fixed asset/capital work-in-progress (CWIP). Consequently, expenses/revenue disclosed under the respective notes are net of amounts capitalised by the Company. (i) Salaries and Wages (ii) Contribution to Provident and Others Funds (iii) Power and Fuel 4, (iv) Miscellaneous expenses 1, (v) Finance Costs 4, , (vi) Professional Fees (vii) Stores & spares consumed 2, (viii) Payment to contractors (ix) Depreciation and amortization expense (x) Cost of Material consumed 3, (xi) Packing Material consumed and packing charges , , (xii) Sales during trial production (3,164.71) (xiii) Closing Stock of finished goods generated out of trial run production (Note 2.23) (3,262.80) (xiv) Closing Stock of work in progress generated out of trial run production (Note 2.23) (201.50) Total 10, , Add: Brought Forward from previous year 6, , Less: Capitalised during the year 16, , Total carried forward , The Company has commissioned its Glass Container Plants at Naidupeta (Andhra Pradesh) and its second line of operation at Nashik (Maharastra) each with a capacity of 650 MT per day during the year. Also refer note 1( c)(ii). Trakya Cam CSR Directors Statutory Reporting Financial Section 83 Annual Report

102 2.32 DERIVATIVE INSTRUMENTS AND UNHEDGEDFOREIGN CURRENCY EXPOSURE Vision We are HNG Glass for the Green Cause As at As at Particulars March 31, 2013 March 31, 2012 Foreign INR Value Foreign INR Value USD Currency () Currency () a) Derivatives outstanding as at the Balance Sheet date Nature of instrument/nature of Loan Cross Currency Coupon Swap-External Commercial Borrowings , (Number of Contracts-CY-2, PY- NIL) Cross Currency Coupon Swap-Foreign Currency Loans -(Number of , , Contracts-CY-2, PY 2) , , b) Particulars of unhedged foreign currency exposure as at the reporting date Import Trade payables EUR , , GBP JPY USD , , AUD Export Trade receivables USD , EUR Foreign Currency loans USD , , Chairman s Overview VC & MD s Review 2.33 GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS As per Accounting Standard 15 "Employee Benefits" (AS - 15), the disclosures of Employee benefits as defined in the Accounting Standard are given below: a) Defined Contribution Scheme Contribution to Defined Contribution Plan, recognised for the year are as under: For the For the year ended year ended Particulars March 31, 2013 March 31, 2012 Employer's Contribution to Provident Fund Employer's Contribution to Pension Fund Employer's Contribution to Superannuation Fund The guidance on implementing Accounting Standard - 15 (Revised 2005) on Employees Benefits issued by Accounting Standard Board (ASB) states that benefits involving employer established provident funds, which require the interest shortfalls to be recompensed are to be considered as "Defined Benefit Plans". The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the quarter ended December 31, The Actuary has accordingly provided a valuation and based on the below provided assumptions there is no shortfall as at March 31, Annual Report

103 The Company contributed ` NIL towards provident fund during the year ended March 31, 2013 (` NIL during the year ended March 31, 2012). The details of fund and plan asset position are given below: As at As at Particulars March 31, 2013 March 31, 2012 Trakya Cam Plan assets at year end, at fair value 7, , Present value of benefit obligation at year end 7, , Asset /Liability recognised in Balance Sheet Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic Approach: Fixed Income/Debt Securities 8.20% 11.62% Expected guaranteed interest rate 8.50% 8.25% CSR b) Defined Benefit Plan The employees' gratuity fund scheme managed by Insurer is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. I. Change in the present value of the Defined Benefit obligation representing reconciliation of opening and closing balances thereof are as follows: GRATUITY FUNDED Particulars Liability at the beginning of the year * 2, , Current Service Cost Interest Cost Actuarial (Gain) / Loss Benefits paid (327.23) (135.84) (87.07) (111.38) (59.21) Liability at the end of the year 2, , , * Opening unfunded Liability amounting to ` lacs relating to PY has been consider under Funded Liability being funded during the previous year. GRATUITY UNFUNDED Directors Statutory Reporting Particulars Liability at the beginning of the year * Current Service Cost Interest Cost Actuarial (Gain) / Loss (57.27) (89.91) (98.02) Benefits paid (3.16) (88.40) (24.99) (35.86) Liability at the end of the year , * Opening unfunded Liability amounting to ` lacs relating to PY has been consider under Funded Liability being funded during the previous year. Financial Section 85 Annual Report

104 TOTAL DEFINED BENEFIT OBLIGATIONS Vision Particulars Defined benefit obligation (funded) at the end of the year 2, , , Defined benefit obligation (unfunded) at the end of the year , Total Defined benefit obligation at the end of the year 3, , , , , We are HNG Glass for the Green Cause Chairman s Overview COMPENSATED ABSENCES UNFUNDED Particulars Liability at beginning of the year Current Service Cost Interest Cost Actuarial (Gain) / Loss (62.91) Benefits paid Liability at the end of the year II. Changes in the Fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows: GRATUITY FUNDED Particulars Fair value of plan assets at the beginning of the year 1, Expected return on plan assets Actuarial Gain/(Loss) (34.01) (34.53) Employer contribution Benefits paid (327.23) (135.84) (87.07) (111.38) (59.21) Fair value of plan assets at the end of the year 2, , Actual return on plan assets III. Expense recognised in the Statement of Profit and Loss (Under the head "Contribution to provident and other funds" - Refer Note 2.24) GRATUITY FUNDED VC & MD s Review Particulars Current Service Cost Interest Cost Expected Return on plan assets Net Actuarial (Gain)/Loss to be recognized (117.24) Expenses recognised in Statement of Profit and Loss (53.07) Annual Report

105 GRATUITY UNFUNDED Particulars Current Service Cost Interest Cost Expected Return on plan assets Net Actuarial (Gain) /Loss to be recognized (57.27) (89.91) (98.01) Expenses recognised in Statement of Profit and Loss Trakya Cam COMPENSATED ABSENCES UNFUNDED Particulars Current Service Cost Interest Cost Net Actuarial (Gain) / Loss to be recognized (62.91) Expenses recognised in Statement of Profit and Loss CSR IV. Balance Sheet Reconciliation GRATUITY FUNDED Particulars Present value of the defined benefit obligations at the end of the year 2, , , Fair value of the plan assets at the end of the year 2, , Amount Recognised in Balance Sheet Directors GRATUITY UNFUNDED Particulars Present value of the defined benefit obligations at the end of the year , Fair value of the plan assets at the end of the year Amount Recognised in Balance Sheet , Statutory Reporting COMPENSATED ABSENCES UNFUNDED Particulars Present value of the defined benefit obligations at the end of the year Fair value of the plan assets at the end of the year Amount Recognised in Balance Sheet Financial Section 87 Annual Report

106 GRATUITY FUNDED Vision Particulars Opening Net Liability Expenses as above (53.07) Employers Contribution Amount Recognised in Balance Sheet GRATUITY UNFUNDED We are HNG Particulars Opening Net Liability , Expenses as above Employers Contribution (3.16) Amount Recognised in Balance Sheet , , COMPENSATED ABSENCES UNFUNDED Glass for the Green Cause Chairman s Overview Particulars Opening Net Liability Expenses as above Employers Contribution Amount Recognised in Balance Sheet V. Compensated Absences The actuarial liability of Compensated Absences (Unfunded) of accumulated privileged leave of the employees of the Company as at March 31, 2013 is ` lacs (March 31, 2012-` lacs). VI. In respect of Gratuity (funded), the funds are managed by the Insurers. Accordingly, the percentage or amount that each major category constitutes the Fair value of total plan assets and effect thereof on overall expected rate of return on asset have not been disclosed. VII.Principal Actuarial assumptions at the Balance Sheet Date GRATUITY FUNDED Particulars Mortality Table LICI LICI LICI LICI LICI Discount rate (per annum) 8.00% 8.00% 8.00% 8.00% 7.50% Expected rate of return on plan assets (per annum) 8.00% 8.00% 8.00% 8.00% 8.00% Rate of escalation in salary(per annum) 7.00% 7.00% 5.00% 5.00% 5.00% VC & MD s Review 88 Annual Report

107 GRATUITY FUNDED Particulars Mortality Table LICI LICI LICI LICI LICI Discount rate (per annum) 8.00% 8.00% 8.00% 8.00% 8.00% Expected rate of return on plan assets (per annum) 0.00% 0.00% 0.00% 0.00% 0.00% Rate of escalation in salary (per annum) 7.00% 7.00% 5.00% 5.00% 5.00% Trakya Cam The estimates of rate of escalation in salary considered in actuarial valuation taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary. The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan assets management. CSR The contributions expected to be made by the Company for the year is yet to be determined SEGMENT INFORMATION The Company's exclusive business is manufacturing and selling of Container Glass and as such in the opinion of the Management this is the only reportable segment, as per the Accounting Standard 17 on Segment Reporting, issued under Companies (Accounting Standards) Rules, Geographical Segment a) The following table shows the distribution of the Company's Revenue from operations by Geographical market. Directors For the year ended For the year ended Particulars March 31, 2013 March 31, 2012 Domestic Market 185, , Overseas Market 14, , Total 199, , b) The following table shows the distribution of the Company's Trade Receivables by Geographical market. Statutory Reporting As at As at Particulars March 31, 2013 March 31, 2012 Domestic Market 47, , Overseas Market 1, , Total 48, , Financial Section 89 Annual Report

108 2.35 RELATED PARTY DISCLOSURES Vision I Names of the related parties and nature of relationship A) Subsidiary Companies (i) Glass Equipment (India) Limited (GEIL) (ii) Quality Minerals Limited (QML) (iii) HNG Global GmbH (HNGGG) B) Associate Company (i) HNG Float Glass Limited (HNGFL) C) Key Management Personnels and their relatives (i) Mr. C. K. Somany - Chairman and Non Executive Director (Relative of Key Management Personnel) (ii) Mr. Sanjay Somany - Vice Chairman and Managing Director and Key Management Personnel We are HNG Glass for the Green Cause II (iii) Mr. Mukul Somany - Vice Chairman and Managing Director and Key Management Personnel (iv) Mr. Rakesh Kumar Sharma - Executive Director and Key Management Personnel D) Enterprises over which any person described in [C (i) to (iv)] above is able to exercise significant influence and with whom the Company has transactions during the year. (i) AMCL Machinery Limited (AMCL) (ii) Mould Equipment Limited (MEL) (iii) Rungamattee Trexim Private Limited (RTPL) (iv) Somany Foam Limited (SFL) (v) Spotme Tracon Private Limited (STPL) (vi) Spotlight Vanijya Limited (SVL) Related Party Transactions a) Aggregate amount of transactions with Subsidiary Companies: for the for the Name of the year ended year ended Nature of transaction related party March 31, 2013 March 31, 2012 Sale of goods Glass Equipment (I) Limited Purchase of stores & spares Glass Equipment (I) Limited 1, Chairman s Overview HNG Global GmbH 1.28 Payment on behalf of Related Party Glass Equipment (I) Limited Purchase of fixed assets Glass Equipment (I) Limited 1, , Receipt of services Glass Equipment (I) Limited Provision of facilities Glass Equipment (I) Limited Dividend received Glass Equipment (I) Limited Reimbursement of expenses Glass Equipment (I) Limited HNG Global GmbH 0.86 Investment in shares HNG Global GmbH 6, Corporate Guarantee given to bank HNG Global GmbH 37, VC & MD s Review Corporate Guarantee given to bank Glass Equipment (I) Limited 5, Recovery of expenses HNG Global GmbH Reimbursement of expenses paid Glass Equipment (I) Limited Annual Report

109 b) Aggregate amount of transactions with Associate Company: for the for the Name of the year ended year ended Nature of transaction related party March 31, 2013 March 31, 2012 Purchase of goods HNG Float Glass Limited Purchase of assets HNG Float Glass Limited Share Application Money HNG Float Glass Limited 3, , Recovery of expenses HNG Float Glass Limited Trakya Cam c) Aggregate amount of transactions with Key Management Personnel and their relatives: Particulars Sanjay Somany Mukul Somany Rakesh Kumar Sharma CSR Remuneration (included in Employee Benefit Expenses-Note 2.24) FY FY Remuneration paid to Vice Chairmen & Managing Directors and Executive Director includes ` lacs which due to inadequacy of profit has exceeded the limits prescribed under the provisions of the Companies Act, The Company has made an application on November 23, 2012 before the Central Government and necessary approval in this respect is awaited. Further the reappointment and remuneration of ` 4.76 lacs of the Executive Director with effect from the period from March 1, 2013 to March 31, 2013 is subject to approval of Shareholders in the ensuing General Meeting and Central Government. Directors d) Aggregate amount of transactions with related parties as mentioned in (D) above are as follows: for the for the Name of the year ended year ended Nature of transaction related party March 31, 2013 March 31, 2012 Purchase of goods Somany Foam Limited Mould Equipment Limited AMCL Machinery Limited Purchase of fixed assets AMCL Machinery Limited Recovery of expenses on behalf of Related Party AMCL Machinery Limited Statutory Reporting Sale of stores Material Somany Foam Limited Receipt of services Mould Equipment Limited AMCL Machinery Limited Rent paid Spotlight Vanijya Limited Rungamattee Trexim Pvt. Ltd Rent received Mould Equipment Limited Share Application Money received Spotlight Vanijya Limited Spotme Tracon Pvt. Ltd Rungamattee Trexim Pvt. Ltd Financial Section 91 Annual Report

110 e) Balance of related parties is as follows: Vision for the for the Name of the year ended year ended Nature of transaction related party March 31, 2013 March 31, 2012 Receivable Glass Equipment (I) Limited Somany Foam Limited 0.40 Payable Glass Equipment (I) Limited AMCL Machinery Limited HNG Float Glass Limited Mould Equipment Limited We are HNG Share Application Money Glass Equipment (I) Limited paid pending allotment HNG Float Glass Limited 6, , Share Application Money received pending allotment Spotlight Vanijya Limited Spotme Tracon Pvt Ltd Rungamattee Trexim Pvt Ltd Corporate Guarantee given to bank AMCL Machinery Limited 1, , Glass for the Green Cause Chairman s Overview Glass Equipment (I) Limited 5, , HNG Global GmbH 38, , Investment in Shares HNG Global GmbH 6, , Surety Taken Glass Equipment (I) Limited Expenses incurred on behalf of Related Party HNG Global GmbH LEASES The Company has acquired certain assets under financial lease, the cost of which is included in the Gross Blocks of Buildings and Vehicles. The lease term is 75 years (Rishikesh and Head Office) and 95 years (In case of Sinnar) for Building. The lease term is 3 years for Vehicles, after which the legal title will pass on to the Company. The lease has been recognised as an asset at the present value of the minimum lease payments. Minimum lease payments payable in future at the Balance Sheet date and their present value are as under: Particulars Lease Payments Present Value Not more than one year Later than one year and not more than five year Later than five years VC & MD s Review Assets taken under operating leases: Office premises and office equipments are obtained on operating lease. There is no contingent rent in the lease agreements. The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease agreements. There are no sublease and all the leases are cancelable in nature. The aggregate lease rentals are charged as "Rent" in Note '2.25' of the financial statement Annual Report

111 2.37 DEFERRAL/CAPITALISATION OF EXCHANGE DIFFERENCES In accordance with the amendment to AS 11, the Company has capitalised/decapitalised exchange loss/gain respectively arising on long-term foreign currency loan, amounting to ` 2, lacs (PY. ` lacs ) to the cost of Plant & Equipments. The Company does not have any other long-term foreign currency monetary item. Hence, the amount of exchange loss deffered in the "Foreign Currency Monetary Item Translation Difference Account" is ` NIL (PY. ` NIL) Trakya Cam 2.38 FINISHED GOODS STOCK AND SALES Sales* Closing Stock Particulars for the year ended for the year ended As at As at March 31, 2013 March 31, 2012 Bottles 198, , , , * Sales include breakages of bottles RAW MATERIAL CONSUMED CSR For the For the year ended year ended Particulars March 31, 2013 March 31, 2012 Silica Sand 8, , Soda Ash 26, , Cullet 11, , Others 8, , Total 54, , Excluding raw material processing charges Directors 2.40 VALUE OF RAW MATERIALS, SPARE PARTS AND COMPONENTS CONSUMED Ref For the year ended For the year ended Particulars Note No. March 31, 2013 March 31, 2012 % of total % of total consumption Value consumption Value Raw Material 2.40 (a) Imported , , Indigenous , , , , Spare Parts 2.40 (b) Imported , , Indigenous , , , , (a) Excluding Raw Materials Processing/ACL Printing Charges (b) Excluding stores consumed 1, , (c) Spare Parts includes items capitalized & recovery during the year Statutory Reporting Financial Section 93 Annual Report

112 2.41 VALUE OF IMPORTS CALCULATED ON CIF BASIS Vision For the For the year ended year ended Particulars March 31, 2013 March 31, 2012 Raw Materials 19, , Components, Spare Parts and Stores etc. 6, , Capital Goods (including CWIP) 8, , EXPENDITURE IN FOREIGN CURRENCY (ACCRUAL BASIS) We are HNG Glass for the Green Cause For the For the year ended year ended Particulars March 31, 2013 March 31, 2012 Travelling Expenses Selling Commission Finance Charges 2, Repairs Professional / Technical Fees , Others EARNINGS IN FOREIGN CURRENCY (ACCRUAL BASIS) For the For the year ended year ended Particulars March 31, 2013 March 31, 2012 F.O.B. Value of Exports 9, , Figures for previous year have been regrouped and/or rearranged wherever considered necessary. Chairman s Overview As per our report of even date For Lodha & Co. Mukul Somany Sanjay Somany Chartered Accountants Vice Chairman and Vice Chairman and Managing Director Managing Director H.K.Verma Ajay Kumar Rai Laxmi Narayan Mandhana VC & MD s Review Partner Company Secretary Sr. Vice President and Chief Financial Officer Place : Kolkata Date : May 30, Annual Report

113 Trakya Cam CSR Directors Statutory Reporting Financial Section 95 Annual Report