Board’s 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, 2018.

FINANCIAL HIGHLIGHTS (Rs, in Lakhs)

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

During the financial year, at standalone level your Company reported total income of Rs, 1,98,935 Lakhs in 2017-18 compared to Rs, 2,07,128 Lakhs in 2016-17. Your Company recorded an EBITDA of Rs, 11,827 Lakhs and a net loss of Rs, 29,451 Lakhs during the year under review. During the year direct export turnover was Rs, 11,065 Lakhs compared to Rs, 12,006 Lakhs during the preceeding year.

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 be able to do any maintenance capex and also fails to meet its debt obligation. Your company is in discussion with the Lenders and is working on various resolution plan and hope to find out a solution acceptable to all stakeholders.

DIVIDEND & RESERVE

Your Directors do not recommend any dividend for the year ended 2017-18. Further, during the year under review no amount was transferred to General Reserve.

ISSUE OF SHARES

During the year under review, the Company pursuant to Special Resolution approved by the Shareholders at the Annual General Meeting held on 18th September, 2017 had issued 22,15,000 Equity Shares of Rs, 2 each at an issue price of Rs, 207 per equity share aggregating to Rs, 45,85,05,000 to persons falling under promoter group on preferential allotment basis.

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 will be locked in for a period of three years.

SUBSIDIARY COMPANY

As on 31st March, 2018, your Company does not have any subsidiary company.

The Company has joint venture agreement with Trakya Cam Sanayi II AS in HNG Float Glass Limited.

In accordance with Section 136 of the Companies Act 2013, the audited financial statements, including the consolidated audited financial statements and the related information of the Company are available on the website of the company i.e. www.hngil.com. These documents are also available for inspection during business hours by the shareholders of the Company at the Registered Office.

TRUST SHARES

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. During the year under review, the company failed to repay Principal and Interest amount due to L & T Finance Ltd and subsequently 37,94,360 shares of Ace Trust and 1,55,640 shares of HNG Trust shares respectively pledged in favour of L & T Finance Ltd were invoked by them. 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 Lender Forum.

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

DIRECTORS & KEY MANAGERIAL PERSONNEL

Pursuant to the sad demise of Shri Chandra Kumar Somany, the Board of Directors of the Company in its meeting held on 12th August, 2017 appointed Shri Sanjay Somany as the Chairman of the Board of Directors.

During the year under review Shri Sanjay Somany was re-appointed as the Chairman & Managing Director of the Board of Directors of the Company and Shri Mukul Somany was re-appointed as the Vice Chairman & Managing Director of the Company on a honarary basis for a period of 3 years w.e.f. 1st April, 2018.

In accordance with the provisions of Section 152 of the Companies Act, 2013, Shri Sanjay Somany (DIN: 00124538), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, have offered himself for re-appointment. Your Director recommends his re-appointment.

Shri Narayanaswami Sitaraman, an Independent Director left for heavenly abode on 24th April, 2018.The Board places on record its sincere appreciation for the guidance and valuable services rendered by him during his association with the Company.

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

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 in the Company's website at the link http://www.hngil.com/report/TermsofAppointmentofIndependent Director.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 Board's 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 was carried out. The Board of Directors expressed their satisfaction with the evaluation process.

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

A. Nomination & Remuneration Policy

B. Board Evaluation Policy.

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

DIRECTORS' RESPONSIBILITY STATEMENT

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, 2018, 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 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 as at 31st March, 2018 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.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

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

Equity shares in respect of which the dividend for the year 2008-2009 and 2009-2010 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.

CORPORATE GOVERNANCE

The Company has been practicing 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 financial year 2018 forms part of this Annual Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

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 arm's 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 Company's website at the link: http://www.hngil.com/report/policyonrelatedpartytransactions.pdf.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee has been formulated and comprises of Shri Sanjay Somany, Shri Mukul 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 Company's website at the link http://www.hngil.com/report/corporatesocialresponsibility policy.pdf.

DEBT MANAGEMENT

During the year under review, due to liquidity crunch your Company has failed to comply with all the terms and conditions stipulated in the Corrective Action Plan (CAP) and could not be able to meet the debt obligation. The Company has been categorized as Non Performing Asset (NPA) w.e.f. 31st March, 2018.

The Company is in discussion with the lenders and your Directors are confident that a Resolution Plan will be derived which will be acceptable by all the stakeholders.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis under Schedule V read along with the Regulation 34(3) of the SEBI (Listing Obligations & Disclosures Requirement) Regulations is presented in a separate section forming part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared in accordance with the provisions of the Companies Act, 2013 and with Indian Accounting Standard 110 read with Indian Accounting Standard 28 notified by the Ministry of Corporate Affairs and forms part of this Annual Report.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the Financial Statements of Subsidiaries/ Associate Companies/Joint Ventures is given in Form AOC-1.

RISK MANAGEMENT

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

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

INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY

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 Company's 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 to them. The Company has a robust Management Information System (MIS), which is an integral part of the control mechanism.

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

The Shareholders of the Company at the Annual General Meeting (AGM) held on 18th September, 2017, appointed M/s Doshi Chatterjee Bagri & Co LLP, Chartered Accountants (Firm Registration Number 325197E/E300020), as Statutory Auditor of the Company from the conclusion of 71st AGM till the conclusion of 76th AGM of the Company subject to ratification by members at every AGM.

Pursuant to the amendment in the Companies Act, 2017 and 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 AGM and therefore approval of the shareholders for the same is not sought.

Pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 M/s. Jitendra K. Agarwal & Associates, Chartered Accountants (Firm Registration No.318086E), is appointed as the Joint Statutory Auditor of the Company, to hold office from the conclusion of this 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. The Statutory Auditors have not reported any incidence of fraud to the Audit Committee of the Company during the year under review. Auditors Report

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

a) Attention is drawn to para 9 a of the Independent Auditors Report regarding Basis for Qualified Opinion. The clarification of the same is provided in Note No. 2.38.1 of the Accounts of the Standalone Accounts.

b) Attention is drawn to para 9 b of the Independent Auditors Report regarding Basis for Qualified Opinion. The clarification of the same is provided in Note No. 2.43 of the Accounts of the Standalone Accounts.

c) Attention is drawn to para 9 c of the Independent Auditors Report regarding Basis for Qualified Opinion. The clarification of the same is provided in Note No. 2.40 of the Accounts of the Standalone Accounts.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made there under, the Company has appointed Shri Babu Lal Patni, Practising Company Secretary to conduct the Secretarial Audit for the financial year 2017-18. The Secretarial Audit for the financial year ended 31st March, 2018 does not contain any qualification, reservation or adverse remark and is annexed herewith and marked as "Annexure II” to this report.

DISCLOSURES Audit Committee

The Audit Committee comprises of two Independent Directors namely Shri Ratna Kumar Daga (Chairman), Shri Dipankar Chatterji and Shri Mukul Somany, Non-Independent Director as members. All the recommendations made by the Audit Committee were accepted by the Board during the financial year 2017-18.

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

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 behavior, actual or suspected fraud or violation of the Company's 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 Company's 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

Extract of Annual Report in Form MGT-9 is provided separately as "Annexure III” and forms the part of Board's Report.

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 Standalone 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

None of the Executive Directors of the Company has received any remuneration or commission from its subsidiary.

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 Company's 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 not applicable to your company for the financial year ending 31st March, 2018.

ANNUAL LISTING FEES

The Company's 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 year 2018-19 has been paid to all these Exchanges.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

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”

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

PERSONNEL AND INDUSTRIAL RELATIONS

Your Company takes pride in the commitment, competence and dedication shown by its employees in all the areas of business. People are the Company's key assets. The focus in 2017-18 was on enhancing employee engagement and driving performance excellence to achieve the Company's 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 focusing on non-retaliation and zero tolerance to non-compliance. HR function is a critical pillar to support the organization's growth and its sustainability in the long run.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their appreciation to the employees at all levels for their contribution to the Company's performance but for whose hard work, and support, your Company's 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 June, 2018 (DIN: 00124538)