Hindusthan National Glass & Industries Ltd Directors Report.

Dear Members,

We hereby present the Annual Report together with the Audited Accounts of our business and operations for the financial year ended 31st March, 2020.


(Rs in Lakhs)

Particulars For the year ended 31st March, 2020 For the year ended 31st March, 2019
Gross sales (including excise duty) 228,637 239,194
Profit before interest, depreciation and tax 27,852 23,839
Interest and finance charges 23,317 25,257
Profit/Loss before depreciation and tax 4,535 (1,417)
Depreciation 14,846 15,853
Exceptional Profit - 9,517
Profit/Loss before tax & after exceptional profit (10,311) (17,270)
Profit/Loss for the year (Before Other Comprehensive Income) (10,303) (17,295)
Balance brought forward from previous year (94,938) (77,660)
Amount available for appropriation (100,256) (94,938)
Balance carried forward to the next year (100,256) (94,938)

*figures have been regrouped and rounded off.


During the financial year, your Company reported total income of Rs 228,637 Lakhs in F.Y. 2019-20 compared to Rs 239,194 Lakhs in F.Y. 2018-19. Your Company recorded an EBITDA of Rs 27,852 Lakhs and a net loss of Rs 10,303 Lakhs during the year under review. During the year, direct export turnover was Rs 8,992 Lakhs compared to Rs 14,955 Lakhs for F.Y. 2018-19.

The financial position of the Company continues to be under severe stress. The situation further deteriorates, due to increase in Power & Fuel and Raw Material costs. Due to paucity of funds, your Company could not do any maintenance of capex and also fails to meet its debt obligation. Your Company is in discussion with the Lenders and is working on various resolution plans and hope to find out a solution acceptable to all stakeholders.


The spread of COVID-19 has severely impacted businesses around the globe, including India. There has been severe disruption to regular business operations due to lock-down, disruption in transportation, supply chain and other emergency measures. The Companys offices are under lockdown since 24th March, 2020 and plants are running with curtailed production and manpower as per requisite permission from local administration. As a result the volumes for the month of Mar2020 and period upto the Board meeting has been impacted. The Company is monitoring the situation closely and operations are being ramped up in a phased manner taking into account directives from the Government. The management has considered internal and certain external sources of information up to the date of approval of the financial statements in determining the impact of COVID-19 pandemic on various elements of its financial statements. The management has used the principles of prudence in applying judgments, estimates and assumptions and based on the current estimates, the management expects to fully recover the carrying amount of inventories, trade receivables, investments and other assets. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of approval of these financial statements.


Your Directors do not recommend any dividend for the year ended 2019-20. Further, during the year under review, no amount was transferred to General Reserve.


The Paid Up Equity Share Capital as at 31st March, 2020 stood at 17,91,07,130 i.e 89553565 equity shares of Rs 2/- each. The Company has not issued shares with differential voting rights, nor has granted any stock options or sweat equity. As on 31st March, 2020, none of the Directors of the Company, hold instruments convertible into equity shares of the Company.

Pursuant to the Regulation 78 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, Equity Shares allotted to Promoters in F.Y. 2017-18 will be locked in for a period of three years.


As on 31st March, 2020, your Company does not have any Subsidiary Company.


Pursuant to the amalgamation of Ace Glass Containers Limited with the Company, 21,41,448* shares and 13,68,872* shares having face value of Rs.10/- each (corresponding to 1,07,07,240 shares and 68,44,360 shares having face value of Rs .2 each) were issued to HNG Trust and Ace Trust respectively. At present, HNG Trust & Ace Trust are holding 76,41,600 & 30,50,000 shares respectively. In terms of an undertaking given to the BSE Limited, the Company is required to make disclosures, pertaining to utilisation of proceeds of shares allotted to the said Trusts, until they are extinguished. Entire Shareholding of Ace Trust and 75,06,850 Shares of HNG Trust has been pledged in compliance of Corrective Action Plan (CAP), approved by the Joint Lenders Forum.

*The Companys shares were sub-divided from Rs 10 per share to Rs 2 per share w.e.f. 13th November, 2009.


Shri Sanjay Somany (DIN:- 00124538) is the Chairman of the Board of Directors w.e.f. 12th August, 2017.

During the year under review, the shareholders at 73rd Annual General Meeting of the Company held on 18th September, 2019, approved appointment of Shri Amal Chandra Saha (DIN:- 00443348) as the Non-Executive Independent Director of the Company for a period of 5 years w.e.f. 18th September, 2019 to 17th September, 2024.

In accordance with the provisions of Section 152 of the Companies Act, 2013, Shri Sanjay Somany (DIN:- 00124538), Chairman and Managing Director of the Company, retires by rotation at the ensuing 74th Annual General Meeting and being eligible, have offered himself for re-appointment. Your Directors recommend his re-appointment, on the basis of recommendations of Nomination and Remuneration Committee.

The Company has received declarations from all the Independent Directors of the Company, confirming that, they meet the criteria of Independence, as prescribed under Section 149(6) of the Companies Act, 2013. Role, responsibilities and duties of Independent Director are being uploaded on the Companys website at the link http://www.hngil.com/report/ TermsofAppointmentofIndependentDirector.pdf

Pursuant to the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared, after taking into consideration the various aspects of the Boards functioning, composition of the Board, its Committees, culture, execution and performance of specific duties, obligations and governance. The Company has devised a Policy for performance evaluation of Independent Directors and Board, which include criteria for performance evaluation of the non-executive directors and executive directors.

The performance evaluation of the Independent Directors, Chairman and the Non Independent Directors were carried out. The Board of Directors expressed their satisfaction with the evaluation process, on the basis of recommendations from Nomination and Remuneration Committee.

Shri Ratna Kumar Daga (DIN: 0 0 2 27746), Shri Dipankar Chatterji (DIN: 00031256), Smt. Rita Bhimani (DIN: 07106069) & Shri Amal Chandra Saha (DIN: 00443348) are the Independent Directors of the Company.

The Existing Tenure of Smt. Rita Bhimani (DIN: 07106069) as an Independent Woman Director of the Company ended on 2nd March,2020. The Board considers that her continued association would be of immense benefit to the Company and it is desirable to continue to avail her services as an Independent Director. Accordingly, the Board of Directors of the Company at its meeting held on 11th February, 2020,(based on the recommendation of Nomination and Remuneration Committee at its meeting dated 11th February, 2020), approved her re-appointment as an Independent Director for another tenue of 5 years w.e.f. 3rd March, 2020 to 2nd March, 2025, in accordance with the provisions of Sections 149, 150, 152, read with Schedule IV and any other applicable provisions of the Act and regulations 16(1)(b), 17(1A) and read with other applicable regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactment thereof for the me being in force), subject to approval of shareholders by way of special resolution at ensuing 74th Annual General Meeting of the Company.

Managerial Remuneration

In reply to our 2 (Two) applications for payment of remuneration exceeding the limits provided in Schedule V of Companies Act, 2013, pertaining to F.Y. 2015-2016 to F.Y. 2017-2018 for Executive Directors namely Shri Sanjy Somany, Chairman & Managing Director (DIN:- 00124538) and Shri Mukul Somany, Vice-Chairman & Managing Director (DIN:- 00124625), the Central Government after taking reference of the Notification No. S.O. 4823 (E) dated 12th September, 2018 has abated both of our pending applications vide its letter No. SRNG35818194/4/2017-CL-VII and SRNG35820075/4/2017-CL-VII, both dated Tuesday, 9th October, 2018. Through such letters, the Central Government have also given directions that, the onus of compliance with the provisions of the Companies Act, 2013 as amended vide the Companies (Amendment) Act, 2017, lies with the Company.

As per opinion received from Central Government, Shri Sanjay Somany, Chairman & Managing Director (DIN:- 00124538) and Shri Mukul Somany, Vice-Chairman & Managing Director (DIN:- 00124625), have refunded the excess remuneration received by them under section 197 read with Schedule V of the Companies Act, 2013, in F.Y. 2015-16, F.Y. 2016-17 and full remuneration for F.Y. 2017-18 to the Company, during the F.Y 2019-20. The Company duly noted the same.

The following policies of the Company are attached herewith and marked as "Annexure I”:

A. Nomination & Remuneration Policy.

B. Board Evaluation Policy.

Shri Lalit Lohia was appointed as Company Secretary w.e.f. 5th February, 2019 and continuing till date.

Shri Bimal Kumar Garodia is acting as Chief Financial Officer of the Company since 26th April, 2008 and continuing till date.

The details of Key Managerial Personnel of the Company are as follows:-

Name of Key Managerial Personnel Designation
1 Shri Sanjay Somany Chairman & Managing Director
2 Shri Mukul Somany Vice Chairman & Managing Director
3 Shri Bimal Kumar Garodia Chief Financial Officer
4 Shri Lalit Lohia Company Secretary


Pursuant to Section 134(5) of the Act, the Directors hereby confirm that -

a) In the preparation of the annual accounts for the year ended 31st March, 2020, the applicable Accounting Standards had been followed along with proper explanation relating to material departures.

b) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2020 and of the loss of the Company for the year ended on that date.

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the annual accounts on a going concern basis.

e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.


Pursuant to Rule 3 of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, including any till date amendments,the Company has uploaded the details of unpaid and unclaimed amounts lying with it on the Ministry of Corporate Affairs website.

Equity shares in respect of which, the dividend for the year 2011-12 remained unclaimed for seven consecutive years has been transferred to the IEPF Authority, in compliance with Section 124 of the Companies Act, 2013, read with rule 6 of the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2017, after giving individual notices to concerned Shareholders and advertisements in newspapers.


The Company has been practising the principles of good corporate 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. M. Rathi & Co., confirming the compliance of Corporate Governance, as stipulated in Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations & Disclosures Requirement) Regulations, 2015, forms an integral part of the Annual Report.

Our Corporate Governance Report for the F.Y. 2019-20, along with Its annexures forms part of this Annual Report.


The contracts/arrangements/transactions entered by the Company, during the financial year with the related parties were in the ordinary course of business and on an arms length basis. All the related party transactions are with the approval of the Audit Committee and are periodically placed before the Board, for review. During the year under review, the Company has not entered into any contract/arrangement/transactions with related parties, which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions, as approved by the Board may be accessed on the Companys website at the link http://www.hngil.com/report/policyonrelatedpartytransactions.pdf.


The Corporate Social Responsibility Committee has been formulated and comprises of Shri Mukul Somany (Chairman), Shri Sanjay Somany and Smt. Rita Bhimani as members. Since, the Company has suffered losses in the previous financial years as well as in the current financial year, no expenditure was incurred on CSR activities.

The CSR Policy may be accessed on the Companys website at the link http://www.hngil.com/report/ POLICYONCORPORATESOCIALRESPONSIBILITY.pdf


During the year under review, the continuous higher financial leverage and lower profitability plagued the financials of the Company. To reduce the leverage, Company has been continuously exploring various options for raising fund including equity/debt or enter into joint venture. Earlier the application made by one of the strategic Investor for entering into a Joint Venture with Company got invalidated by Competition Commission of India (CCI). However the Company had subsequently discussed with some other new lenders and also approached the existing lenders for extension of One Time Settlement (OTS) as per the Agreement entered in September 2018.

On 5th March 2019 one of the lender had initiated proceedings in National Company Law Tribunal (NCLT), Kolkata Bench under section 7 of the Insolvency and Bankruptcy Code, 2016. However on 2nd April, 2019 Honble Supreme Court has quashed the RBIs circular on Resolution of Stressed Assets - Revised Framework dated 12th February, 2018.

An Application for withdrawal under Rule 11 of the NCLT Rules, 2016, on behalf of the said lender was filed before the NCLT. The Withdrawal application was taken up for hearing on 30.07.2019 and was allowed by giving permission to withdraw the application without prejudice to the right proceed against the Company.

Thereafter, the same lender filed fresh application before the National Company Law Tribunal (NCLT), Kolkata Bench on 13th August, 2019 under section 7 of the Insolvency and Bankruptcy Code, 2016. The matter was last heard on 17th February, 2020. One more lender has filed application on 13th January,2020. Further due to ongoing pandemic situation, no hearing/further hearing has been scheduled so far. The matter being subjudice, the Company has not given any effect of resolution plan in the financial statements.

The discussion with the Lenders is still going on and the resolution process of the same is under discussion between the Lenders and the Management of the Company.


Managements Discussion and Analysis under Schedule V read with Regulation 34(3) of the SEBI (Listing Obligations & Disclosures Requirement) Regulations 2015 has been presented in a separate section and forms part of this Annual Report.


During the year under review, the Company has no subsidiary and/or joint venture and/or associate Company and accordingly, your Company is not required to prepare consolidated financial statements, including Form AOC-1 for F.Y. 2019-20.


Risk management is embedded in your Companys operating framework. The Company manages and monitors various risks and uncertainties, that can have some adverse impact on the Companys business. Your Company believes that managing risks helps in maximising returns. Your Company is giving major thrust in developing and strengthening its internal audit, so that risk threat can be mitigated. The Companys approach to address business risks is comprehensive and includes periodic review, mitigating controls and reporting mechanism.

Since, your Company is not among top 500 listed companies based on market capitalisation as on 31st March, 2020, constitution of Risk Management Committee is not required, in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with till date amendments.

The Company has a formal Risk Management Policy. The Board of Directors from time to time, review the same.


Your Company has a comprehensive and effective internal control and risk mitigation system, including internal financial control, for all the major processes, to ensure reliability of financial reporting, timely feedback on operational and strategic goals, compliance with policies, procedures, law and regulations, safeguarding of assets and economical and efficient use of resources. The Companys internal control system is commensurate with its size, scale and complexities of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors of the Company, actively reviews the adequacy and effectiveness of the Internal Control Systems and suggests improvements. The Company has a robust Management Information System (MIS), which is an integral part of the control mechanism.


As per amendments to the Companies Act, 2013 and rules made therein and as per notification dated 7th May, 2018 by the Ministry of Corporate Affairs (MCA), ratification of the Statutory Auditor is no longer required to be passed by shareholders at the ensuing Annual General Meeting (AGM) and therefore, approval of the shareholders is not sought at the ensuing AGM for our joint Statutory Auditors namely:-

A) M/s. Doshi Chatterjee Bagri & Co. LLP, Chartered Accountants (Firm Registration Number 325197E/E300020), who were appointed as the Statutory Auditors of the Company, to hold office from the conclusion of 71st Annual General Meeting until the conclusion of the 76th Annual General Meeting.

B) M/s. JKVS & Co., (Formerly M/s. Jitendra K. Agarwal & Associates) Chartered Accountants (Firm Registration No. 318086E), who were appointed as the Joint Statutory Auditor of the Company, to hold office from the conclusion of 72nd Annual General Meeting until the conclusion of the 77th Annual General Meeting, along with the existing Statutory Auditors M/s. Doshi Chatterjee Bagri & Co. LLP, Chartered Accountants

Auditors Report

The para-wise management response to the qualifications / observations made in the Independent Auditors Report is stated as under:

a) Attention is being drawn to para 3 of the Independent Auditors Report regarding Basis for Qualified Opinion. The clarification of the same is provided in Note No. 2.13.8.D of the Accounts.

b) Attention is being drawn to para 4 of the Independent Auditors Report regarding Basis for Qualified Opinion. The clarification of the same is provided in Note No. 2.38 of the Accounts. The Company and its promoters are in process regularising the situation. The Company has prepared its accounts on going concern basis.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made thereunder, the Company has appointed Shri Babu Lal Patni, Practising Company Secretary to conduct the Secretarial Audit for the financial year 2019-20. The Secretarial Audit for the financial year ended 31st March, 2020, along with self-explanatory qualifications/observations, is annexed herewith and marked as "Annexure II” to this report.


Audit Committee

The Audit Committee comprises of 3(three) Independent Directors namely Shri Ratna Kumar Daga (Chairman and Independent Director), Shri Dipankar Chatterji (Member and Independent Director) & Shri Amal Chandra Saha (Member and Independent Director) and 1 (One) Executive Director, namely Shri Mukul Somany as member. All the recommendations made by the Audit Committee were accepted by the Board, during the financial year 2019-20.

Presently, the composition of the Audit Committee is as follows:

Name Designation
1 Shri Ratna Kumar Daga Chairman
2 Shri Dipankar Chatterji Member
3 Shri Amal Chandra Saha* Member
4 Shri Mukul Somany Member

*Shri. Amal Chandra Saha has been appointed as Audit Committee Member w.e.f 13th August, 2019.

Vigil Mechanism/Whistle Blower Policy

The Company has a Vigil Mechanism, which also incorporates a Whistle Blower Policy for Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of conduct. Disclosures can be made by a Whistle Blower, through an email to the Chairman of the Audit Committee.

The Policy may be accessed on the Companys website at the link http://www.hngil.com/report/whistleblowerpolicy.pdf

Meetings of the Board

During the year under review, 5 (Five) meetings of the Board of Directors were held. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013. Details of compositions and other information are provided in the Corporate Governance Report.

Extract of Annual Return (MGT-9)

As required under Section 134(3)(a) of Companies Act, 2013 read with till date amendments, the Annual Return(i.e. MGT-9) for Financial Year 2019-20 is put up on the Companys website and can be accessed at http://www.hngil.com/downloads/Annual%20 Return%20(MGT-9)%20for%20the%20F-Y%202019-20.pdf

Particulars of Loans, Guarantees or Investment made, guarantee given and securities provided.

Particulars of Loans given, Investments made, Guarantee given and securities provided along with the purpose for which, the Loan or Guarantee or Security is proposed to be utilized by the recipient are provided in the Financial Statements.

Change in nature of Business

During the year under review, there has been no change in the nature of business of the Company.

Remuneration from Subsidiary

Since the Company has no Subsidiary, this is not applicable.

Significant or Material Order

No significant or material order was passed by the Regulators or Courts or Tribunals, which impact the going concern status and Companys operations in future.

Material Changes and Commitments

Due to severe liquidity crunch, the Company is not able to meet its debt obligation.

Sexual Harassment

During the year under review, no case was reported pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Business Responsibility Reporting

The Business Responsibility Reporting, as required by Regulation 34(2) of the SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015, is enclosed herewith and marked as "Annexure IN”.


The Companys shares continue to be listed at the National Stock Exchange of India Limited, BSE Limited and The Calcutta Stock Exchange Limited.

The Annual Listing fee for the F.Y. 2020-21 has been paid to all these Exchanges.


In terms of Section 197(12) of the Act, read with Rule 5(1) (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014, a Statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set-out and other details as required in the said rule are provided as "Annexure IV”.


The statements containing the required particulars under the Act are provided as "Annexure V” and forms a part of this report.


Your Company takes pride in the commitment, competence and dedication shown by its employees in all the areas of business. People are the Companys key assets. The focus in F.Y. 2019-20, was on enhancing employee engagement and driving performance excellence, to achieve the Companys long term vision. Your Company is consolidating the human resource operations and the internal systems, to enhance the operations of the Company. The Company continued to actively drive the Ethics and Compliance agenda via trainings, programmes and employee engagements, focussing on non-retaliation and zero tolerance to non-compliance. HR function is a critical pillar to support the organizations growth and its sustainability in the long run.


Your Directors would like to place on record, their appreciation to the employees, at all levels, for their contribution to the Companys performance, but for whose hard work and support, your Companys achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers, for their continued support and faith reposed in the Company.

For and on behalf of the Board
Sanjay Somany
Place : Kolkata Chairman & Managing Director
Date : 28th May, 2020 (DIN: 00124538)