906Annual Report 2008-09.pdf - Hindusthan National Glass ...

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Managing uncertainties at HNG Risk is the uncertainty about events and their possible outcome that can impact performance and prospects. At HNG, our objective is to reinforce a culture of responsible risk management at all levels and functions so that risks can be estimated, controlled and countered. Nature of risk Risk explanation Risk mitigation Economy risk Slowdown in key downstream sectors The Company caters to multiple sectors (processed food, could affect demand for the Company’s beverages, beer, liquor, pharmaceuticals and organised retail) products leading to a diversified income portfolio. The Company caters to the top 10 companies in respective sectors, outperforming the industry average The container glass industry grew 12 percent from Rs. 4,000 cr in 2007-08 to around Rs. 4,500 cr in 2008-09 and this growth is expected to sustain Competition risk Growing competition (organised and The Company retained its position as India’s largest container unorganised players) could affect growth glass player with a market share in excess of 65 percent market Accelerated bottle light weighting to benefit consumers Widened the product portfolio to address a broader client base Profitability risk Profitability could be affected on The Company improved its average realisations from account of declining realisations, Rs. 14,678 per tonne in 2007-08 to Rs. 17,127 per tonne product stagnation or cost increase in 2008-09 Reinforced its culture of product value-addition Retained its industry cost leadership Input risk A disruption in quality raw material The Company intends to extend raw material supply contracts availability at the right price may affect the Company’s competitive edge from three months to a year Propose to have reasonable inventory for all critical raw material depending on lead time. Propose reduction in freight cost by having exclusive agreements with transporters for movement of raw material. Strengthening raw material sourcing by widening the vendor base Plans to acquire silica mines in the vicinity of its six manufacturing units Operation risk Operational inefficiencies could increase The Company reinforced its pioneering industry status the Company’s cost through the bottle light-weighting technology Implemented the in-plant narrow-neck-press-and-blow technology to catalyse light weighting by up to 25-30 percent Implemented vacuum pumps in production lines, enhanced productivity, improved quality and reduced energy consumption Introduced Japanese technology in reducing job change and stabilisation time leading to enhanced capacity utilisation 38 | Hindusthan National Glass & Industries Limited
Nature of risk Risk explanation Risk mitigation Quality risk Inconsistent product quality can lead to The Company possesses ISO 9000:2000 quality certification client attrition and is actively pursuing ISO 14000/18000/22000 certifications Invested in sophisticated laboratories equipped with cuttingedge equipment (atomic absorption spectrophotometer, flame photometer, ramp pressure tester, vertical load tester, profile projector, impact tester and automatic thermal shock tester) Stringent monitoring reduced rejections Marketing risk The Company may find it difficult to The Company enjoys a decades-rich relationship with its capitalise on emerging opportunities clients due to weak marketing Enjoys a 26-nation presence to be increased further in the financial year 2009-10 Deepened its global footprint in Europe, Asia and America. Liquidity risk A liquidity crunch could hamper Reduced debtors’ cycle operations Strengthened creditors’ period optimising working capital use Sustained the working capital cycle People risk A lack of skilled professionals could The Company is continuously recruiting new professionals to affect growth drive its growth Strengthened training at all levels Enhanced employee retention to more than 95 percent Funding risk An inability to mobilise adequate The Company enjoyed a 0.36 debt-equity ratio, considered low-cost funds may stagger growth adequate to fund prospective expansions Maintained a Rs. 917.71 cr reserve as on March 31, 2009; free reserves constituted 87.33 percent of the reserves and surplus balance as on March 31, 2009 Enjoyed a prudent mix of secured and unsecured loans Hindusthan National Glass & Industries Limited | 39
Page 1 and 2: Hindusthan National Glass & Industr
Page 3 and 4: Each time our customers are REPLENI
Page 5 and 6: Hindusthan National Glass & Industr
Page 8 and 9: Vision To create a world-class glas
Page 10 and 11: HOW WE PROGRESSED IN 2008-09 In the
Page 12 and 13: Challenging times. Declining offtak
Page 14 and 15: CHAIRMAN’S THOUGHTS HNG enjoyed a
Page 16 and 17: accelerated product roll-out to mee
Page 18 and 19: LOCALLY MANUFACTURED BOTTLES. GLOBA
Page 20 and 21: ENHANCING AESTHETICS. OPTIMISING CO
Page 22 and 23: MANAGEMENT STATEMENT The Management
Page 24 and 25: CORPORATE RESPONSIBILITY AND SUSTAI
Page 26 and 27: DIRECTORS' REPORT We are delighted
Page 28 and 29: ii) they have selected such account
Page 30 and 31: Particulars Unit Year ended 2008-09
Page 32 and 33: The Board of Directors, at its meet
Page 34 and 35: MANAGEMENT DISCUSSION AND ANALYSIS
Page 36 and 37: production at all times. Highlights
Page 38 and 39: Business driver - 3 Quality At HNG,
Page 42 and 43: THE DIRECTORS PRESENT THE COMPANY
Page 44 and 45: c. Major accounting entries involvi
Page 46 and 47: To Executive Directors The details
Page 48 and 49: Related Party Transactions in the o
Page 50 and 51: Registrar & Share Transfer Agent Sh
Page 52 and 53: Information to shareholders Code of
Page 54 and 55: of the Companies Act, 1956 have bee
Page 56 and 57: Balance Sheet As at March 31, 2009
Page 58 and 59: Cash Flow Statement For the year en
Page 60 and 61: Schedules forming part of the Accou
Page 80 and 81: Statement Regarding Subsidiary Comp
Page 82 and 83: Director’s Report b) Additional I
Page 84 and 85: 23. The Company has not invited/acc
Page 86 and 87: Annexure to the Auditors’ Report
Page 88 and 89: Balance Sheet As at March 31, 2009
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Cash Flow Statement For the year en
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Schedules forming part of the Accou
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Directors’ Report To the Sharehol
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Statement of matters specified by t
Page 108 and 109:
Balance Sheet As at March 31, 2009
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Cash Flow Statement For the year en
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Consolidated Balance Sheet As at Ma
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Consolidated Cash Flow Statement Fo
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Schedules forming part of the Conso
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136 | Hindusthan National Glass & I
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