Asahi India Glass Ltd. 2005 - 06
21st Annual Report
Float Glass
Auto Glass
Forward- looking statement
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 identifiy such
statements by using words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”,
“believe” 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 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 materialize, 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.
Vision & Mission 2
Ten Years’ Financial Snapshot 3
Chairman’s Letter to Shareholders 4
About AIS 6
Corporate Information 16
Performance at a Glance 19
Management Discussion & Analysis 20
Q & A Session with M.D. & C.E.O. 26
Corporate Social Responsibility 29
Report of the Directors 31
Report on Corporate Governance 37
Auditors’ Report 51
AIS - Financials 55
Statement relating to AIS Glass 78
Solutions Ltd.
Auditors’ Report (Consolidated) 79
AIS - Financials (Consolidated) 80
AIS Glass Solutions Ltd. - Report of the 96
Directors
AIS Glass Solutions Ltd. - Auditors’ 99
Report
AIS Glass Solutions Ltd. - Financials 102
AIS
Asahi India Glass Limited (AIS) is India’s largest
integrated glass company with a powerful and well
balanced portfolio of products. AIS has a strong
strategic position in the Indian glass industry. AIS is
a leader in auto glass and architectural processed
glass and has a prominent position in float glass.
AIS is constantly seeking out profitable growth with
a thrust on going up the value chain in both its core
businesses—auto glass and architectural glass.
Vision
To continue to be India’s leading integrated glass
company.
Mission
To provide VALUE to its stakeholders including its
Shareholders, Customers, Employees and Society
at large through delivery of products and services
of internationally comparable QUALITY at globally
competitive COSTS, DELIVERED optimally in a
manner which promotes SAFETY and respect for the
ENVIRONMENT.
2
(Rs. Millions)
Items 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Gross Sales 1470 1445 1545 2200 2239 2332 4899 5884 6915 7032
Other Income 9 22 19 20 21 17 58 149 74 36
Total Income 1479 1467 1564 2220 2260 2349 4957 6033 6989 7068
Operating Profit 282 295 285 401 398 414 898 1223 1289 1229
Interest 99 97 93 76 58 49 79 24 32 108
Gross Profit 183 198 192 325 340 365 819 1199 1257 1121
Depreciation 115 154 137 161 193 174 438 501 403 63
Profit Before Tax 62 30 34 139 130 173 376 782 850 912
Tax 8 3 9 46 50 54 5 59 67 50
Profit After Tax 54 27 25 93 80 119 371 723 783 863
Paid-up Equity Capital 18 37 37 37 37 74 80 80 80 160
Reserves & Surplus 172 169 183 256 313 326 711 1221 1676 2349
Shareholders’ Fund 190 206 220 293 350 400 791 1301 1756 2509
Loans
- Interest Free Sales Tax Loan 45 96 147 205 249 257 248 243 235 227
- Interest Free Foreign Currency Loan - - - - - - 2268 2088 2088 2130
- Interest Bearing Loan 803 735 647 498 633 920 854 373 2128 6311
Capital Employed 1005 971 936 932 1014 1327 4132 3961 5019 6380
Net Fixed Assets 618 578 530 716 915 893 3361 3042 4805 9718
Net Current Assets 381 387 413 230 286 583 886 1072 1401 1492
Earnings per share (Rs.) 29.42 7.16 6.63 25.22 21.51 16.03 4.71 8.91 4.86 6.17
Cash Earning per share (Rs.) 99.16 53.50 51.79 75.43 78.46 42.05 10.69 15.34 7.39 6.37
Dividend Pay out (%) 16.99 38.12 41.83 22.00 28.15 34.21 35.92 28.47 29.21 12.68
PBDIT / Average Capital 30.65 29.80 29.90 42.91 40.96 35.34 21.63 30.24 28.70 21.57
Employed (%)
PBIT / Average Capital
17.53 12.81 13.31 23.01 19.31 18.89 10.96 19.93 19.63 20.44
Employed (%)
ROANW (%) 32.30 13.36 11.51 45.91 27.78 33.65 51.33 69.34 50.99 39.84
(PAT / Average Net Worth)
Gross Sales (Rs. Millions) Operating Profit (Rs. Millions)
8000 6915 7032
1600
5884 1289 1229
1223
6000 4899
1200
898
4000 800
2200 2239 2332
1470 1445 1545 401 398 414
2000 400 282 295
294 285
0 0
2003-04 2004-05 2005-06 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03
Shareholders' Fund (Rs. Millions) 1000 Profit After Tax (Rs. Millions)
3000 863
2509 783
800 723
2500
2000 1756
600
1500 1301 371
400
1000 791
293 350 400 200 93 80 119
500 191
190 206 220 54 27 25
0 0
1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Notes:
*Previous period figures have been regrouped / rearranged, wherever required. * Earnings are taken on expanded equity capital, post bonus and merger.
*Capital employed is exclusive of capital WIP and misc. expenses not written off. * Face value of equity share is Re. 1/- from 2002-03 onwards.
* Profitability figures are inclusive of exchange rate gain and exclusive of expenses on extraordinary items.
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Dear Shareholders,
The year 2005-06 started on a positive note and
we expected a splendid performance based on our
forecast for the economy in general and the continued
double digit growth in the automobile and construction
sectors. An unexpected catastrophe hit Maharashtra
in the form of a record rainfall on 26th July, 2005. The
calamity was very severe in Taloja and our factory was
massively flooded; the operations at AIS’s Float Glass
Plant came to a grinding halt. The entire AIS staff at
the plant fought valiantly to prevent the closure of the
factory operations. Unfortunately the damages were
extensive and the furnace had to be closed down.
We sought the best expert advice that we could
muster and their opinion was a minimum plant shut
down of at least six months. This was an uphill task
and a challenge that the entire team at AIS took on.
I am very pleased to inform our shareholders about
the unrelenting loyalty of our staff working in Taloja
and the full support they received from their colleagues
from our other plants to re-start the operations. We are
proud of the human resource in AIS. The production at
Taloja Plant was restored in a record period of just over
three months on 1st November, 2005 on the auspicious
day of “Deepawali”. This must be one of the finest
displays of human spirit. I am happy to report that
after the major repairs we now have a much better,
efficient and rejuvenated Float Glass Plant at Taloja.
However, the floods severely effected our performance
in the financial year 2005-06. AIS’s gross sales at
Rs. 7032 million remained virtually flat. Operating profits
declined 4.7 per cent to Rs. 1229 million. Besides the
flood losses, rising costs of certain inputs like oil, soda
ash, etc. impacted AIS’s profitability. In keeping with the
Company’s commitment to shareholders, your Directors
recommended a dividend of 60 per cent on equity shares,
notwithstanding the financial difficulties AIS faced in
2005-06.
The performance of AIS Glass Solutions, a subsidiary of
AIS, was satisfactory. Month on month sales grew over
29 per cent to make AIS Glass Solutions as the largest
architectural glass processor in the country by March,
2006. Total sales of architectural processed glass
amounted to Rs. 140 million during the year.
Some of the highlights of the year are :
– Maintained leadership position, with over 81 per cent
market share in the Indian passenger car industry;
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– Re-started exports of auto glass in the after-market new architectural designs, which are very highly glass
to Europe and Pakistan; oriented. Gurgaon, Noida, Bangalore, Pune, Hyderabad
and Mumbai are throwing up a new skyline where AIS
– Received commendations from customers, including has the most prolific role to play.
Maruti Udyog Ltd. and Mahindra & Mahindra Ltd;
We are steadfast in pursuing our long term strategy
– Completed Phase II and III expansions at the of growing revenues and profits by addressing all
Auto Glass Plant at Chennai, adding capacities of the markets in the glass value chain while aiming for
1–1.2 million tempered back door glass and another operational excellence across our core businesses.
500,000 laminated windshields respectively; and
In conclusion, I would like to thank our shareholders and
– Set up two architectural processing facilities at the business partners for their overwhelming support to AIS.
Auto Glass Plants at Chennai and Rewari, significantly I would also like to convey my sincere appreciation for
increasing architectural glass processing capacity. the efforts of the entire AIS team this year. I am confident
AIS is on the path of realising its vision to continue to be
Apart from these, I am pleased to inform that the India’s leading integrated glass company.
project work at AIS’s Roorkee Plant, which is the largest
Integrated Glass Plant in the country, is progressing
B.M. Labroo
well. This is the single largest investment by AIS.
Chairman
Commercial production at this plant is scheduled to
begin by December, 2006.
These expansions will further strengthen AIS’s
competitiveness in the auto glass and the architectural
glass value chains and improve its position of being
among the lowest cost glass producers in the world.
We are on the threshold of a major growth phase. By
the end of 2006-07, we would have completed the
most of our scheduled expansions. Consequently much
larger capacities will emerge to ensure AIS maintains
its No. 1 position and set the stage for the most
efficient operations to make it globally competitive,
and financially rewarding. Our ability to utilize larger
capacities, integrate our core businesses and increase
our levels of value addition will be a key to our future
excellence.
India’s GDP growth over the past three years has
averaged 8.1 per cent. In the past two years, growth in
the manufacturing sector has outpaced GDP growth.
Construction has grown at 11.8 per cent. This strong
economic growth will directly impact AIS’s core markets
– automobiles and construction, which generally grow
at over two times GDP. However, some other factors like
weakening of rupee against dollar, hardening of interest
rates, rising inflation and, more importantly, high oil
prices that have risen to over US$ 70/barrel, are a cause
of concern.
India has to maintain its much applauded growth
strategy despite some negative factors. AIS is in a
vantage position. Per capita glass consumption in
India is one of the lowest in the world, mainly because
large parts of the country are still architecturally rural.
However, the breathtaking urban growth during the
last 20 years has opened up huge opportunities for the
5
AIS is the largest integrated glass company in India,
manufacturing a wide range of international quality
automotive safety glass, float glass, architectural
processed glass and glass products.
AIS is jointly promoted by Labroo family, Asahi Glass Co.,
Ltd., Japan, with Maruti Udyog Ltd. holding a minority
stake. The promoters hold 55.3 per cent of the paid up
equity capital of AIS, while the remaining equity is held
by the public.
AIS is a widely held listed company with over 69,000
shareholders. The Company’s equity shares are listed
on the Bombay Stock Exchange (BSE) and the National
Stock Exchange (NSE).
AIS is transforming itself from being a manufacturer
of world-class glass and glass products to a solutions
provider by moving up the value chain of auto glass
and architectural glass and providing design, products
and services that make glass more versatile and user-
friendly.
AIS has the three Strategic Business Units (SBUs)
through which it strives to deliver value and make glass
a part of everyone’s daily lives:
AIS Auto Glass
AIS Float Glass
AIS Glass Solutions
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AIS Auto Glass
India’s largest manufacturer of world class automotive
safety glass.
Total production capacity of 2.5 million car sets, with
state-of-the-art manufacturing facilities at Rewari and
Chennai.
Sole supplier to almost the entire Indian passenger car
industry, with a current market share in excess of 81 per
cent.
Offers the full range of automotive safety glass
including laminated safety glass, tempered glass for
side and backlites, value-added glass, defogger glass,
encapsulated glass.
Customers include India’s leading automobile players
like Maruti Udyog, Hyundai Motors, Tata Motors, Toyota,
Mahindra & Mahindra, Honda, General Motors, Ford
India, Hindustan Motors, Fiat India, Volvo, Eicher,
Piaggio.
Exporting auto glass to after-market in Europe and
Pakistan.
Significant presence in the after-market, with a market
share of over 50 per cent.
Sales and marketing network includes two nation-wide
distributors with 27 depots located across the country to
cater to the after-market.
AIS Float Glass
Premier manufacturer of international quality float glass
in India.
State-of-the-art manufacturing facility at Taloja, near
Mumbai, with a manufacturing capacity of 500 TPD.
The second plant, which will be the Iargest Integrated
Glass Plant in India with a float glass production capacity
of 700 TPD, is being set up at Roorkee in the state of
Uttaranchal in North India. The plant is scheduled to be
operational by December, 2006.
7
Market share of about 20 per cent of the Indian float
glass market, which will increase to approximately 35
per cent, post commissioning of the Roorkee Plant.
Product range includes float glass of thickness of
2mm–12mm, with products like clear float glass,
tinted float glass, heat reflective glass and mirrors.
Country-wide sales and marketing network, which
comprises over 450 authorized stockists, field sales
personnel, zonal offices and area representatives.
AIS Glass Solutions
Emerged as a leader in architectural glass processing
business in the country within first year of its
operations.
A subsidiary of AIS with focus on solving customer
problems about glass and offering end-to-end glass
solutions which enable customers to do more with
glass.
Architectural processing facilities at Taloja, Chennai
and Rewari. The fourth facility, being set up at AIS’s
Integrated Glass Plant at Roorkee, will be the largest
architectural processing facility in the country, and
will be operational by February, 2007.
Product range includes high quality architectural
processed glass like AIS Stronglas™ (tempered
glass), AIS Securityglas™, AIS Acousticglas™
(laminated glass), Insulated Glass Units and
innovative glass products like windows, tabletops,
partitions, shelves, shower cubicles, etc. Besides, it
caters to projects segment, meeting glass and related
requirements of projects.
National sales force, comprising 32 sales personnel
and over 65 channel partners, is among the most
knowledgeable sales force in the country on glass.
Long term objectives include :
– To increase the captive consumption of float glass
for architectural processing & glass products;
– To raise glass consumption by disseminating
knowledge and introducing innovative product lines.
8
…The Journey So Far
Since its inception in 1987 as a supplier of one product, automotive
tempered glass, to one customer — Maruti Udyog Ltd. — AIS has
emerged as the largest integrated glass company with profitable growth
flowing from all actions taken so far.
As we step into a new growth phase, let us look back at AIS’s transition
since 1987.
AIS in 1987 AIS in 2006
Single plant at Ten plants, located at Rewari, Taloja,Chennai
Rewari and Roorkee in the North, West and South of
India.
Single customer - Wide-spread customer base which includes
Maruti Udyog Ltd. almost all the Auto OEMs, glass distributors
and dealers spread across India.
Single product - Wide-range of automotive safety glass, float
Tempered Glass glass, architectural processed glass and glass
products.
Single location - production Pan India presence with manufacturing facilities,
and sales in Haryana sales and marketing offices, warehouses and
service centres located across India.
Single business India’s largest integrated glass company with
segment - Auto Glass presence in every part of the auto and
architectural glass value chains.
Rs. Millions
1987-88 2005-06 CAGR
1. Net Sales 115 5,877 24%
2. EBITDA 33 1,229 22%
% to sales 29% 21%
3. EBDT 20 1,121 25%
% to sales 18% 19%
4. Market Capitalisation * 19 15,654 45%
* As at 31st March, 2006
9
…Building Capacities and Capabilities
India is poised to be amongst the largest glass markets in the world.
Given the strong outlook for the automobile and construction sectors
and the current low per capita glass usage of 0.7 kg, there is a huge
potential for growth. Taking an annual average growth of 10 per cent in
the demand for auto glass and architectural glass, India would require
atleast 15 float glass plants instead of the existing 4 plants and India’s
car production is expected to rise from the current levels of 1.3 million
to 3 million in the next 15 years.
AIS is excited by the growth potential and opportunities that the
underlying business environment opens up for its products and
services. AIS is well positioned to harness the potential.
AIS’s ability to correctly anticipate future growth and invest accordingly
in capacities and capabilities has helped it consolidate and strengthen
its position as India’s largest integrated glass company. AIS is pursuing
a focused capital expenditure programme to prepare for future growth
even as it continuously looks for ways to improve efficiencies and
minimize costs. The Company’s investments extend from building
scales to strengthening its engineering, design and development
capabilities and improving the quality of its infrastructure in the most
efficient manner, in terms of costs as well as long term returns.
During 2005-06, AIS made significant progress in building capacities
and capabilities.
Implemented Phase II and Phase III expansions at Auto Glass
Plant at Chennai by adding capacities for tempered backlites and
laminated windshields.
10
Set up two architectural processing facilities at Auto Glass Plants
at Chennai and Rewari.
Setting up India’s single largest Integrated Glass Plant at Roorkee
(Uttaranchal), which will become operational by December, 2006.
The plant will have state-of-the-art manufacturing facilities for:
Float Glass (700 TPD ).
Value Added Glass like Reflective and Mirror.
Automotive Safety Glass.
Architectural Processed Glass.
Glass Products.
Roorkee offers significant advantages like fiscal incentives in the
form of exemption from excise duty, income tax and central sales
tax for a period of 10 years, proximity to the largest glass market
in India, etc.
These expansions will further strengthen AIS’s competitive
position as the largest integrated glass company in the country
and make it among the lowest cost glass producers in the world.
11
…Developing Competitive Advantage through Innovation
While AIS implements its strategy of building scales with forward and
backward linkages, it continues to focus on developing competitive
advantage through innovation. At AIS, the drive for innovation extends
across all its business activities.
Driving margins through innovative products and solutions: As a
market leader and technology leader, AIS is improving product mix with a
high proportion of innovative, high value-added products and solutions,
both in architectural glass and auto glass segments. For example, AIS is
offering the following product lines:
AIS Stronglas: This is branded as an impact resistant glass. It is a
very high grade tempered glass that is several orders stronger than
ordinary glass. The main idea behind AIS Stronglas is to make the
glass safer and more durable by lowering the risk of impact related
breakage.
AIS Securityglas: This is burglar resistant glass. It is laminated
glass with a specialized plastic inter-layer that provides high levels of
intrusion resistance from burglar attacks.
AIS Acousticglas: This is sound resistant glass. It is laminated
glass, similar to Securityglas, but with a different specialised plastic
inter-layer that dampens external noises, and provides significant
reduction in sound.
Solar control glass: This provides greater comfort for passengers
sitting inside the car in terms of temperature control and exposure to
solar radiation.
Glass antenna: This involves antenna printing on glass. It can
receive signals effectively. Compared with the mast antenna, the glass
antenna has a better aesthetic appeal, is maintenance-free, durable
and light weight.
12
IR cut windshield: This improves overall solar energy management,
reduces AC load, brings down overall temperature of vehicle interior &
vehicle cool down time and reduces skin irritation due to solar beam.
Water repellent glass: This helps maintain visibility in heavy rains,
eases wiping water and dirt from glass and provides protection
against UV rays.
Innovative Delivery Systems: In its endeavour to better service its
customers, AIS Auto Glass has started sub-assembly operations for some
of its OEM customers. Besides, the entire sales operation is supported
by a system of forward warehouses across the country to allow
just - in - time delivery to customers.
Driving growth through product and service diversification: AIS
Glass Solutions is building competencies in sourcing hardware,
packaging and creating a customer focused distribution channel. AIS
Auto Glass has made a foray into the non-auto segment. It is supplying
oven glass to Whirlpool and now exploring the possibility of being a
global supplier to other appliance manufacturers.
Knowledge Creation and Dissemination: AIS Glass Solutions continues
to promote and disseminate knowledge on effective glass usage through
innovative methods like an interactive website, www.aisglass.com,
focused “one day” programmes and glass training manual.
During 2005-06, various glass training workshops were held
covering over 1000 architects, builders, fabricators, consultants,
contractors to provide training on glass and glazing in 10 cities all over
the country.
13
…Integration Across the Value Chain
In its pursuit for profitable growth, AIS’ strategy is to encompass each
element of the auto glass and architectural glass value chains. The
ability to move up the value chain and capture profitable markets is
the critical element of this long term strategy.
This business strategy aims to:
Captively consume over 60 per cent of AIS’s total float glass
production for value-added auto glass and architectural glass
products.
De-commoditise the glass business with innovative products to
de-risk the Company against vagaries of the commodity market.
Improve profitability by capturing end markets across the
auto glass and architectural glass value chains and delivering
value-added products and services.
The value chain coverage as it stands today is presented below :
Auto Glass Value Chain
Auto Glass Auto Glass Allied Auto Glass
manufacture distribution Products Retail
distribution
Shaded cells signify those areas where we are either present
Float Glass or will be, post commissioning of the Integrated Glass Plant
manufacture
in Roorkee in the financial year 2006 - 07.
Processing & Fabrication Installation
Value added products: Products
Reflective & Mirror : Laminated
: Tempered
: Insulated Glass
Design &
Retail
Architectural Glass Solutions
14
…Delivering Value
AIS has always focused on pursuing profitable growth with a
belief that sustainable shareholder returns are created by
consistently delivering superior value to its customers and
stakeholders.
Financially, AIS’s goal is to generate free cash flow from its
operations, to earn a rate of return on capital employed of 40
per cent and pay out 25 per cent of profits as dividends.
AIS is:
Continuously striving to better understand customer
requirements through scientifically structured customer
surveys and leverage its flexible manufacturing and innovative
delivery systems to constantly service their demands.
Regularly raising production efficiency across businesses
through global benchmarking to manufacture products in
line with the most demanding international quality standards
at the most globally competitive costs. AIS’s motto is to
achieve
“Quality of Japan at Cost of China”.
Constantly improving its knowledge base to develop
innovation-led competitive advantages. AIS is the first to
introduce several products in the Indian market like laminated
safety glass, printed glass, modular assembly window and
tinted float glass.
Consistently making investments in capacities and capabilities
in a structured manner that provide critical competitive edge and
maximizes long term profitability and return on investments.
15
Board of Directors Committee of Directors Management Team-Corporate
B.M. Labroo Audit Committee S. Labroo
Chairman Managing Director & Chief Executive Officer
S. Kapur
S. Labroo Chairman K. Kojima
Technical Director
Managing Director &
Chief Executive Officer J. Khattar
Member P. L. Safaya
Director & Chief Operating Officer (Float)
K. Kojima G. Thapar Corporate Head–HR, Administration &
Technical Director Development
Member
M. Kamiya A. Singh
Director & Chief Operating Officer (Auto)
Director Remuneration Committee Corporate Head–Planning & I.S.
S. Kapur G. Thapar K. Narayan
Director Chairman Director & Chief Operating Officer
(Glass Solutions)
S. Kapur
J. Khattar Member
Director H.D. Daftary
Corporate Head–Finance / Chief Financial Officer
Executive Director (Sales & Marketing)–Float
K. Kojima
R. Rana Member
Director S. Ganjoo
Joint Corporate Head – Development
B.M. Labroo
G. Thapar Member
Director
B.S. Kanwar
Executive Director (Works & Administration)–Auto
K. Yoshimura Shareholders’/Investors’
Director Grievance Committee V. Khanna
Executive Director (Commercial)–Auto
Corporate Head–Supply Chain Management
P.L. Safaya B.M. Labroo
Director & Chief Operating Chairman R. Mukhija
Officer (Float) Corporate Head–Legal, Investor Relations,
Systems & Audit
S. Labroo Company Secretary
Member
A. Singh
Director & Chief Operating A. Singh R. Shelly
Officer (Auto) Member Joint Corporate Head–Development
Statutory Auditors Bankers
Jagdish Sapra & Co. Citi Bank N.A. The Jammu & Kashmir Bank Ltd.
Chartered Accountants
State Bank of India ICICI Bank
HDFC Bank Punjab National Bank
Internal Auditors
A. Sharma & Co. Standard Chartered Bank Mizuho Corporate Bank, Ltd.
Chartered Accountants The Bank of Tokyo – Mitsubishi Ltd. ABN Amro Bank
16
Management Team - SBUs
Sanjay Labroo
Managing Director & Chief Executive Officer
K. Kojima
Technical Director
AIS Auto Glass AIS Glass Solutions
Arvind Singh Kunwar Narayan
Director & C.O.O. Director & C.O.O.
Vikram Khanna B.S. Kanwar
Executive Director (Commercial) Executive Director (W&A)
Anil Ahuja Head – Production Anil Chatwal Manager – Finance & Accounts
Vijay Arora Head – Maintenance (Elect.) Tathagat Mukherjee Manager – Knowledge
Mirza Asif Beg Head – Quality Assurance Development
& TQM Brenda Noronha Manager – HR & Administration
Sandeep Bhargava Head – Materials B.S. Rawat Manager – Customer Service
Alok Dhar Head – Exports S.S. Rawat Zonal Head – South
Sunil Garg Head – Finance & Taxation Vipul Shah Zonal Head – West
H. Itoh Technical Advisor Sandeep Shukla Manager – Marketing &
Rakesh Jha Head – HR & Administration Communication
R. Krishnan Plant Head – Chennai Brij Raj Singh Zonal Head – North & East
Mahesh Kumar Head – Power Generation Manjeet Singh Manager – Logistics
Navin Rai Head – Maintenance (Mech.)
& TPM
Vikas Saxena Head – After-market
Archana Singh Head – Planning & MIS
Amit Sood Head – Sales & Marketing
Pratul Swaroop Head – Projects
T. Yamamoto Technical Advisor
AIS Float Glass
P. L. Safaya
Director & C.O.O.
H.D. Daftary
Executive Director (S&M/F&A)
Plant 1 - Taloja Plant 2- Roorkee
G.C. Panigrahi Plant Head T. V. Subramaniam Plant Head
Om Capore Head – Sales & Marketing A.P. Bhate Head – Electrical
A.K. Chakrabarty Head – Quality Assurance Engineering
M.M. Gurjar Head – Engineering (Mech.) Sanjay Bhute Head – Cold End
H.L. Jain Head – Silica Sand Processing V.K. Chamola Head – Commercial
Plant P. Datta Head – Quality Assurance
A.G. Joshi Head – HR & Administration Dalip Maini Head – HR & Administration
Satish Kumar Head – Production Planning Sanjay Pal Head – Warehouse &
J.D. Mayekar Head – Finance & Accounts Logistics
& MIS S.K. Rai Head – Hot End & R/M
S. Oberoi Head – Business Development Shakeel Head – Civil Engineering
S.R. Patil Head – Engineering (E&U) Vinod Sharma Head – Customer Service
M.S. Ranadive Head – Medical Services Department
B.N. Singh Head – Production R.L. Shettigar Head – Mechanical
N.A. Shetty Head – Materials & Logistics Engineering
Sudhish Singhal Head – Materials
17
Registered Office Integrated Glass Plant
12, Basant Lok, Village Latherdeva Hoond,
New Delhi – 110057 PO: Jhabreda Pargana–Mangalaur,
Tel: (011) 26142288 Tehsil Roorkee, District Haridwar,
Uttaranchal–247667
Tel: (01332) 224090/91
Fax: (01332) 224114
Corporate Office
Global Business Park, Tower B, 5th Floor,
Mehrauli –Gurgaon Road,
Gurgaon –122002 (Haryana)
Sales and Marketing Head Office
C-203/B, Fortune 2000,
Tel: (0124) 4062212-19
Bandra–Kurla Complex,
Fax: (0124) 4062244/88
Bandra (East), Mumbai –400 051
Tel: (022) 30620101, 30620107
Fax: (022) 30620119
Works (Auto)
94.4 km Stone, Delhi –Jaipur Highway,
Village Jaliawas, Tehsil Bawal, Zonal Offices
District Rewari –123501 (Haryana) West
Tel: (01284) 264366, 264367, 264274 C-203/B, Fortune 2000,
Fax: (01284) 264185 Bandra–Kurla Complex,
Bandra (East), Mumbai –400 051
Plot No. T- 16, MIDC Industrial Area, Tel: (022) 30620101, 30620107
Taloja, District Raigad–410208 Fax: (022) 30620119
Tel: (022) 27412256/2042
Fax: (022) 27412595 North
D- 986, New Friends Colony,
Plot No. F-76 to 81, SIPCOT, New Delhi–110065
Industrial Park, Tel: (011) 26311105/1186/1197
Irungattukottai, Fax: (011) 26311198
Sriperumbudur Taluk,
District Kancheepuram, South & East
Tamil Nadu–602105 No. 2-C, 1st floor,
Tel: (044) 47103442/43 Ruby Regency “Dinrose Estate”
Fax: (044) – 47100441 New No. 69, Anna Salai
Chennai–600 002
Works (Float) Regional Office
Plot No. T-7, MIDC Industrial Area, Plot S.No. 80, Thathawade Phata,
Taloja, District Raigad–410208 Adjacent to Rajashree Shahu College of Engineering,
Tel: (022) 27410171/74 New Mumbai–Bangalore Highway,
Fax: (022) 27410090 Thathawade Taluka Mulshi, District Pune
18
Financial Year : 2005-06
Sales Distribution - AIS (Consolidated) Sales Distribution - SBUs
AIS Auto Glass
AIS Glass 1%
Solutions 2% 1% 1%
3%
(2%) AIS Auto Glass 3%
Maruti
AIS Float Glass (62%) 4%
Hyundai
(36%)
31% Spares & AFM
5%
Tata Motors
Toyota
6% M&M
Honda
General Motors
Architectural Glass
11% Ford
Exports
Piaggio
17% Other OEMs
15%
Financial Highlights (Consolidated)
AIS Float Glass
(Rs. Millions)
5%
2005-06 2004-05 7%
North
North
Gross Sales 7,151.7 6,915.3
10%
3 5% West
West
Net Sales 5,912.2 5,866.1
o
SS uth
South
Operating Profit 1,227.7 1,277.9
East
East
Gross Profit 1,118.7 1,246.3
1 7% Auto
Auto
Net Profit 862.9 771.8
Export
Export
Net Worth 2,524.2 1,761.2
Capital Employed 6396.7 5027.4 26%
Ratios (%)
Operating Profit Margin 20.8 21.8
18.9 21.2
AIS Glass Solutions*
Gross Profit Margin 217
ROANW 40.3 50.2 186
200 179
161
PBDIT / Average Capital Employed 21.5 28.4 144
130
150
Rs Lakhs
98 107
Lakhs
Rs Lacs
100
Per Share (Rs.) (Face Value of Re 1/-) 58 61
42
Cash Earning per share 6.4 7.3 50
13
Earning per share 6.2 4.8 0
Nov-05 Dec-05 Feb-06
Dividend per share 0.6 2.5 Apr -05 May -05 Jun -05 Jul -05 Aug -05 Sep -05 Oct-05 Jan-06 Mar-06
*Total sales of architectural processed glass amounted to Rs. 140
million, which included sale of Rs. 20 million made through AIS
Auto Glass.
19
2005-06 was a transitional year for AIS—a year when considerable investments were made to build capacities.
Equally, it was a year when AIS’s financial performance was severely impacted by the flooding and the consequent
shut down of the Float Glass Plant at Taloja.
The financial highlights are summarized below :
Gross sales grew 1.7 per cent – from Rs. 6,915 million in 2004-05 to Rs. 7,032 million in 2005-06.
Operating profits declined 4.7 per cent – from Rs. 1,289 million in 2004-05 to Rs. 1,229 million in
2005-06.
Depreciation for the year amounted to Rs. 464 million. AIS made a change in its depreciation accounting in
AIS Auto Glass, the Auto Glass SBU, which was hitherto following WDV method. This was changed to SLM
method to bring uniformity in depreciation accounting within the Company. The change in the depreciation
accounting resulted in a lower depreciation charge for the year by Rs. 148 million. Depreciation of earlier
years, amounting to Rs. 401 million, was written back. Profits for the period were impacted to that extent.
This is explained in detail in the Notes to Accounts accompanying the financials.
Profit Before Tax increased 7. 3 per cent from Rs. 850 million in 2004-05 to Rs. 912 million in 2005-06. Profit
After Tax grew 10.2 per cent from Rs. 783 million in 2004-05 to Rs. 863 million in 2005-06. This was partly
due to MAT credit entitlement of Rs. 73 million received by the Company in 2005-06.
In order to get a deeper insight into the AIS’s performance, let us analyse the three SBUs of AIS — AIS Auto
Glass, AIS Float Glass, AIS Glass Solutions.
AIS Auto Glass
Passenger car production, after two excellent years of 35 per cent and 24 per cent growth, slowed in 2005-06,
growing only 6 per cent. Details of passenger car production in India are given in Table 1.
Table 1 - Passenger Car Production in India
Vehicle Production ( in no.) Growth
2001-02 2002-03 2003-04 2004-05 2005-06 03>02 04>03 05>04 06>05
Gross sales increased 16.1 per cent Rs. 4,442 million in 2005-06. Production of tempered glass and laminated
windshields increased 8.9 per cent and 13.1 per cent to 29,37,861 sq.mtrs. and 15,79,721 pcs. respectively, compared
to previous period levels. AIS Auto Glass recorded sales of 28,89,022 sq. mtrs. of tempered glass and 15,61,002 pcs.
20
of laminated windshields, which is higher 7.3 per cent and 12.8 per cent respectively compared to the last year.
AIS Auto Glass maintained its leadership status in the Indian passenger car industry, with a market share of over
81 per cent. It continues to be the sole or dominant supplier to almost all the OEMs including Maruti, Hyundai, Tata
Motors, Toyota, Mahindra & Mahindra, Honda, General Motors, Ford, Hindustan Motors, Fiat, Volvo and Eicher. Sales
to OEMs increased 8.1 per cent from Rs. 3,301 million in 2004-05 to Rs. 3,568 million in 2005-06.
During 2005-06, as increased capacities started getting operational, AIS Auto Glass improved its penetration in the
replacement market. In 2004-05, the Company had lost significant share in this market due to capacity shortfall. AIS
Auto Glass currently accounts for over 50 per cent share of the market. Sales in the auto glass replacement market
increased to Rs. 657 million — a growth of 25 per cent over 2004-05.
We believe that exports will be a very important element of the Company’s future business strategy. After a gap of
nearly two years, AIS Auto Glass re-started exports of auto glass during 2005-06 and secured a two-year contract to
supply laminated windshields for the European after-market. Export of auto glass amounted to Rs. 48 million in
2005-06.
Segment wise sales of AIS Auto Glass is shown in Chart A below :
Chart A : AIS Auto Glass Sales in Rs. Millions
4,000
3,500
3,000
2,500 Exports
AFM
2,000
OE Spare
1,500 OEM
1,000
500
0
2001-02 2002-03 2003-04 2004-05 2005-06
During the year, AIS Auto Glass received commendations from its customers, including for “Overall Commendation”
from Maruti Udyog Ltd. and the “Supplier Performance Award for Best Performance in Quality” from Mahindra &
Mahindra Ltd.
During the year, the Rewari Plant was awarded the BVQI Certification for ISO 14001:2004 and the JIS Q 14001:2004.
AIS Auto Glass has production facilities in Bawal, near Rewari (Haryana) and in Irungattukottai, near Chennai (Tamil
Nadu), supported by forward sub-assembling units and advance warehouses.
Capacity utilisation trends for 2005-06 are given in Chart B and C below :
Chart B : Capacity Utilisation (Rewari Plant)
120%
100%
80%
60%
40%
Tempered
20%
Laminated
0%
Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06
21
Chart C : Capacity Utilisation - Laminated (Chennai Plant)*
140%
120%
100%
80%
60%
40%
20%
0%
Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06
* Note : Capacity has been doubled to 1 million laminated windshields in the last quarter of 2005-06
While the auto glass business continues to grow profitably, the Company is aware of the pressure on margins, resulting
mainly from higher costs of certain inputs like energy, raw float glass, and oil related expenses like transportation.
However, the pressure is likely to ease after the Chennai Plant reaches its full potential and AIS Auto Glass starts full
sourcing of raw glass from AIS Float Glass, post commissioning of the Roorkee Plant. Besides, the efforts being made
to contain energy costs and improve internal efficiencies should help AIS Auto Glass improve its profitability.
AIS Float Glass
Buoyed by the booming construction and automobile sectors, the flat glass market in India has been growing by
over 9 per cent with a higher growth of float glass sales at 11.5 per cent, which shows increasing penetration of float
glass.
Table 2 below presents the overall glass market scenario. Table 3 & 4 give the growth of flat and float glass sales in
India respectively.
Table 2 - Flat Glass Sales in India (MT / Day) 1999-2000 onwards : By Manufacturer
Year AIS GGL SGG TGL HSG GBL IAG Total
AIS - Asahi India Glass Ltd.
1999-00 283 393 0 187 200 111 52 1226 GGL - Gujarat Guardian Ltd.
2000-01 237 355 134 160 221 107 51 1265 SGG - Saint Gobain Glass India Ltd.
2001-02 250 334 255 141 188 107 47 1322 TGL - Triveni Glass Ltd.
2002-03 278 365 302 161 190 119 46 1461 HSG - Haryana Sheet Glass Ltd.
2003-04 328 434 379 169 149 134 53 1646 GBL - Gujarat Borosil Ltd.
2004-05 376 504 434 113 235 152 27 1841 IAG - IAG Ltd.
2005-06 304 554 547 225 222 151 0 2003
Table 3 - Growth of Flat Glass Sales in India Table 4 - Growth of Float Glass Sales in India
Year MT / Day % Growth Year MT / Day % Growth
1226 1999-00 863
1999-00
2000-01 886 2.66%
2000-01 1265 3.26%
2001-02 980 10.60%
2001-02 1322 4.43%
2002-03 1106 12.85%
2002-03 1461 10.44%
2003-04 1310 18.44%
2003-04 1646 12.82%
2004-05 1427 8.93%
2004-05 1841 11.79%
2005-06 1630 14.22%
2005-06 2003 8.81%
9.2% CAGR GROWTH 11.4%
CAGR GROWTH
22
As mentioned earlier, the performance of AIS Float Glass was severely impacted on account of shut down of the Taloja
Plant for over three months due to flooding. Not only did the Company have to bear the costs of re-building and
restarting the plant, but also the opportunity cost of losing over three months of sales. The total financial impact of
floods on profits was Rs. 378 million.
During 2005-06, float glass production declined 20.5 per cent to 24.4 million converted sq. mtrs. (csqm.) from 30.7
million csqm. in 2004-05. Gross sales of AIS Float Glass decreased 16.2 per cent from Rs. 3,089.2 million in 2004-05
to Rs. 2,589.4 million in 2005-06.
Chart D below shows the sales profile of AIS Float Glass :
Chart D : AIS Float Glass - Sales Quantity and Sales Value
Dom. AIS Export
120%
100% 5 2
8
16 10 10
7
80% 6
60%
40% 78 85 85 88
20%
0%
Sales Qty Sales Value Sales Qty Sales Value
Apr-Mar '05 Apr-Mar '05 Apr-Mar '06 Apr-Mar '06
During 2005-06, operating profit margins remained under pressure. Besides the impact of floods, we were faced with
a substantial rise in costs of inputs like fuel, soda ash, freight, etc.
In terms of sales realisation, AIS’s average sales realisation improved towards the end of the year due to increased
sales of tinted glass at higher prices. Chart E below plots the sales realization data :
Chart E : AIS Float Glass - Domestic Sales Realisation (Rs./csqm.)
120
100
80
60
40 Apr-Mar'06
Apr-Mar'05
20
0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Going forward, there remain a few concerns :
- Prices remain under pressure ;
- Float glass manufacturing being highly energy intensive, phenomenal rise in oil prices is a serious cause of
concern.
Besides focusing on improving internal efficiencies, the main thrust this year will be to start commercial operations
at the second float glass unit at the Integrated Glass Plant at Roorkee on schedule, by December, 2006, with a quick
ramp up of production. This should improve sales and profitability, driven by lower operating costs and the fiscal
incentives like exemption from payment of excise duty, income tax, etc.
23
The Roorkee Plant will increase AIS’s float production capacity from the existing levels of 500 TPD to 1200 TPD.
Besides, the Plant will have manufacturing facilities for international quality value-added products like reflective
glass and mirrors. This will not only complete the portfolio of products and enhance market offerings, but also help
improve profitability of AIS Float Glass.
After commissioning of the Roorkee Plant, AIS Float Glass will command a market share of approximately 35 per cent
in the float glass market, up from the current level of about 20 per cent.
AIS Glass Solutions
2005-06 was essentially a start up year for AIS Glass Solutions, a subsidiary of AIS. While there were some initial
problems, the business geared up well during the course of the year. Month on month sales grew over 29 per cent and
AIS Glass Solutions emerged as the largest architectural glass processor in the country by March, 2006. Total sales
of architectural processed glass amounted to Rs. 140 million during the year, which included sales of Rs. 20 million
made through AIS Auto Glass.
Key achievements of AIS Glass Solutions include :
Commissioning of three factories within 365 days.
Developing a national sales force, with 32 sales personnel and over 65 channel partners, which is among the
most knowledgeable sales force in the country on glass.
Launching of innovative, value-added products like AIS Securityglas™ and AIS Acousticglas™.
Making entry into projects segment.
Setting up AIS Order Tracking Systems – a real time, multiple-user, multiple-department, collaborative, online
information tracking software.
Developing comprehensive website, www.aisglass.com, for technical information, order tracking, online demos
and enquiry generation.
Organizing Glass Training Workshops in ten cities for over 1,000 architects, builders, fabricators, consultants,
contractors, to provide training on glass and glazing.
Publishing a Glass Training Manual, the first of its kind in the country.
Developing AIS Glass Configurator – a software for calculating wind-loads, heat insulation, acoustic insulation
and thermal breakage.
AIS Glass Solutions is looking at 2006-07 as the year for consolidation and improvements in its processes, with main
focus on the following :
Driving margins through new products & value addition.
Making in-roads into large customer accounts.
Starting exports.
Starting the architectural processing unit at AIS’s Integrated Glass Plant at Roorkee, which will be the fourth
architectural processing unit and the largest in the country so far.
We see tremendous potential, with market growing at over 25 per cent in the foreseeable future. If the money being
raised by large developers currently through the financial markets and through private-placements translates into
projects on the ground, then the growth for processed glass could be exponential over the coming few years.
While the business prospects are very promising, AIS Glass Solutions is aware of the challenges. With more processing
capacities coming in, competition is likely to increase. There are also threats of cheaper imports especially from
China.
AIS Glass Solutions is fully geared to gain and grow substantially in 2006-07 by tapping the market potential,
leveraging its core strength.
24
Human Resource
The role of our people will be a key factor in our drive to achieve our Vision. As AIS enters a new phase of growth, it is
imperative to build and develop a workforce that is in consonance with the requirements of a much larger and much
more diverse AIS. This is going to be a major initiative of AIS over the next few years. While we continue to provide a
motivating environment to our people for contributing meaningfully to profitable growth, there will be an added focus
on areas like training, development, multi-tasking, etc. and creation of a more system-driven organisation.
AIS is taking significant steps in strengthening HR processes, systems and policies. These include :
Streamlining of HR Policies : As AIS grows rapidly with multi-location facilities, it needs to have common HR
policies and practices. Consequently, we are developing and deploying single-structured HR policies.
Productivity Studies and Programmes : AIS has been carrying out manpower productivity studies at its
manufacturing facilities to assess the present patterns of manpower utilisation in different functions. Based
on the study findings, personal productivity programmes are being conducted to help employees bridge the gap
between knowledge and action. These programmes will help participants increase productivity through work
prioritization, improve communication and develop individuals into team players.
Skill-set and Knowledge Matrix : This is a focused endeavour to enrich job content and enhance job satisfaction.
Through scientific mapping of individual skills with job requirements, we are in the process of developing a skill-
set and knowledge matrix for senior employees of AIS. With the help of specialized and focused training and
development programmes, we are filling in the skill and knowledge gaps to create a larger pool of multi-tasked,
entrepreneurially-driven employees.
Compensation and Benefit Benchmarking : We regularly review and evaluate our compensation and benefits
structure to ensure a competitive structure so that we attract and retain quality manpower.
Total Quality Management : In our quest for global excellence, we have been walking the path of Total Quality
Management (TQM) which has been spread across all processes and functions in AIS. All our improvement
activities for raising efficiency are being carried out under the umbrella of TQM. Special training programmes are
conducted for employees for imbibing the process of Policy Deployment, Daily Work Management and Exactness
– the essential components of the TQM system.
Internal Controls and their Adequacy
AIS is committed to maintaining high standards of internal control and risk management system to provide the
requisite and adequate assurances to the stakeholders.
The Company has a robust internal control and audit system to provide adequate assurance regarding effectiveness
and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations.
Realising the need for a more structured and thorough systems & audit process in AIS, which not only addresses
the issues facing a more dispersed and growing AIS but also maintains the spirit of entrapreneurship, a dedicated
Systems & Audit Function has been set up in AIS.
As a corporate function, the system & audit process focuses on design, implementation and monitoring the following
areas across all business units of AIS :
Systems, Processes & Internal Controls
Risk Management System
Audits
This function, besides providing strong support to all the business units and functions, will further strengthen the
existing systems in AIS.
25
How do you assess the Company’s performance in 2005-06?
2005-06 was a mixed year for the Company.
Financially, it was a year of stress. Gross sales of AIS remained virtually flat — recording a marginal increase of 1.7
per cent from Rs. 6,915 million in 2004-05 to Rs. 7,032 million in 2005-06. Operating profits declined 4.7 per cent to
Rs. 1,229 million. Operating profit margins were under pressure and in fact, declined marginally from 22 per cent to
21 per cent in 2005-06.
This was also the year in which the Company was severely affected by a natural calamity. On 26th July 2005, heavy
rains and cloud burst caused floods in and around Mumbai. Vital installations at our Taloja facility like the oil pump
station, boiler house and batch house were totally submerged in flood waters. The plant had to be shut down, and
there was no production for three months. This had two adverse impacts on AIS’s financials. First, we lost out on three
months’ sales. Second, we had to incur expenses to restore and revive the plant. The cumulative negative effect of
floods on profits was Rs. 378 million.
Besides the floods, there were other external and internal factors that affected our performance. Profitability was
under pressure due to rising costs of key raw materials like raw glass and soda ash, astronomically high fuel prices
and increased transportation cost. For example, rise in fuel prices over the last one year itself had an adverse impact
of over Rs. 250 million between AIS Float Glass and AIS Auto Glass. Moreover, low off-take from some of our new
capacities further affected our performance.
I confess that 2005-06 was a disappointing year for AIS, financially. Equally, however, I believe that from an
organisational point of view, it was one of the best years of AIS. As an organisation, we showed our mettle and our
commitment by fighting back against the adversity we faced at our Taloja Plant. While the calamity was unforeseen
and unprecedented, the incredible effort of the AIS team at Taloja to complete the repair in record time of just over
three months, with no damage to our market standing, has been exemplary and has re-defined the esprit de corps
that characterises AIS.
2005-06 had certain redeeming features as well. Performance of AIS Auto Glass, particularly in the last quarter, was
encouraging, with operating margins at nearly 25 per cent reaching the highest ever. Besides, the new auto glass
and architectural processing capacities, added during the year, were stabilized towards the end of the year. Post
commissioning of the Taloja Plant, AIS Float Glass performed better than expected, on the back of increased sales of
tinted glass, at higher prices. I am highly encouraged by the overwhelming response to the initiatives undertaken by
AIS Glass Solutions during 2005-06.
While, the financial performance is disappointing, some of the basic building blocks for our long term goals were
successfully laid in 2005-06.
Could you update us on the current projects of AIS and how they fit into AIS’s
long term strategy?
The automobile and the construction industry — our two critical user segments — are growing at a rapid pace. Even
taking a conservative growth rate of 10 – 12 per cent, I see a huge market potential. It is, therefore, imperative we
make right investments at the right time and have capacities in place to service future growth in demand.
During 2005-06, we added capacities for tempered glass and laminated windshields at the Auto Glass Plant at
Chennai.
Besides, two new architectural processing units were set up at the Auto Glass Plants at Chennai and Rewari. These units
became operational in January and March, 2006, respectively. With this expansion, AIS now has three architectural
processing units to cater to customers in the western, southern and northern parts of the country.
26
The project work at India’s largest Integrated Glass Plant at Roorkee in the state of Uttaranchal, the biggest investment
being made by AIS so far, is proceeding according to schedule. It will be an integrated and composite plant with
manufacturing facilities for value-added products like reflective glass and mirror, architectural processed glass and
glass products, automotive safety glass and float glass. The Plant will become operational by December, 2006.
These expansions are a strategic fit into AIS’s value chain strategy. It will further strengthen AIS’s competitiveness in
the auto glass and the architectural glass value chains and improve its position of being among the lowest cost glass
producers in the world.
What is AIS’s value chain strategy?
While remaining focused on the glass business, our strategy is to seek out profitable growth in the value chains that
define our core businesses – auto glass and architectural glass. The strategy has two critical elements of integration
and value addition. This will help AIS derive benefits from operational synergies and build a value chain that
diversifies sales mix and improves profitability. For example, over the next five years, we aim to consume over 60
per cent of our total float glass production internally for auto glass and architectural glass products. These products,
being less prone to demand and price fluctuations, are expected to return better margins and contribute positively
to profitability.
While AIS continues to embark on the growth path, aren’t you concerned with the
rising debt burden of your Company?
Glass is a capital intensive business, and projects – especially for float glass – have a long gestation period. We are
currently in this process, i.e., putting in the investments into projects to build capacities and capabilities with a focus
on capturing and leveraging each element of the auto and architectural glass value chains. The existing debt level
reflects the fact that these projects are in execution phase and have yet to add to our top and bottom lines. Although
most of our projects will be commissioned in the last quarter of the current fiscal, they will effectively contribute from
next fiscal (2007-08) onwards, resulting in improved cash flows. This will help in reducing the debt levels significantly
and improve the structural ratios from 2007-08 onwards.
I am confident our increased size and scope of operations, improved cash flows and opportunities for better efficiencies
in the glass value chains will make us a more competitive and profitable glass player, earning superior returns.
Looking ahead, what are your immediate plans and objectives?
In the given circumstances, the pincer of rising input costs and stagnant finished goods prices is resulting in a
squeeze in our margin. We have outlined the following initiatives to correct the situation :
Capture volumes using newly installed capacities in auto glass and architectural processed glass. We are targeting
a significant increase in sales of architectural processed glass and glass products this year.
Sweat existing assets to squeeze margins. While our operating plans to raise efficiency and productivity are
already in place, we aim to increase export of auto glass by further utilising capacities at our Chennai Plant.
Seek out additional opportunities for value-added projects and products and capture margins at the farthest
possible end of the glass value chains, rather than at the commodity end, through products such as pyrolitic
reflective glass, mirror, processed glass and glass products.
Besides, our immediate focus will be to start the Roorkee Plant on schedule, with a quick ramp up of production,
which should immediately improve sales and profitability, driven by :
Fiscal incentives in the form of exemptions from excise duty, income tax and sales tax.
Substantially lower operating costs. For example, 100 per cent glass supply from own plant would help save
packing and freight costs which are significant. Besides, power cost at Roorkee would be lower considering it
being almost half of the cost elsewhere.
27
What is AIS’s growth outlook?
In 2006-07, we expect our consolidated sales to grow in the range of 25 per cent over last year, with increased sales
coming largely from AIS Float Glass and AIS Glass Solutions. However, operating profit margins are likely to remain
under pressure, given the current situation of stagnant prices with rising input costs.
2007-08 will be the year when we fully commission the ongoing expansions and begin utilising our capacities to
potential. AIS’s revenues are expected to rise over 100 per cent in 2007-08, compared to the 2005-06 levels. We also
expect profit margins to improve.
We aim to fully implement our value chain strategy over the next few years and expect 18 - 20 per cent top line growth,
with operating profit growing at over 25 per cent.
At AIS, we are very excited by the growth opportunities and believe that we are best positioned to be the total solutions
providers to our customers in all our businesses.
What do you think are the key risks and concerns?
As mentioned earlier, the current situation is one where we face a squeeze – with product prices at best stagnant,
with a tendency to decline, and input costs rising substantially.
In the auto glass business, there is a possibility of the car market slowing down. However, the cut in excise duty on
small cars should help maintain some of the growth momentum. On the float side, the additional capacity may put
pressure on prices. AIS Glass Solutions is likely to face more competition from local players.
The following external factors may continue to plague the industry :
Oil prices could remain as high, or even rise further.
VAT is still not at manufacturer level for the glass industry, which continues to give tax evaders a cost and pricing
advantage.
The proposed Central Sales Tax reduction to 2 per cent is yet to materialise.
Low price import of certain glass products, which could act as dampener.
Given these risks and concerns, AIS will have to drive growth in the challenging scenario with a clear focus on improving
internal efficiencies, tapping potential opportunities in existing and new markets and offering differentiated and
innovative products and services.
My expectation for 2006-07 is cautiously optimistic. It is, however, much more positive for 2007-08.
28
As a responsible corporate citizen, AIS has been making significant efforts to purposefully connect its business
objectives to wider social objectives.
AIS has been undertaking a diverse range of social and community development programmes and projects in areas
like education, health, drinking water and sanitation in the vicinity of its manufacturing plants. Besides, AIS has
been continuously striving for environment preservation and safe operations at its plants.
Education
AIS has identified two villages — Kheramurar and Mohammadpur, in the vicinity of its Auto Glass Plant at Rewari
— for educational activities. Kheramurar is one of India’s most backward villages in terms of social indicators and
Mohammadpur was chosen as a model village, from where AIS could develop an intervention model that could be
replicated in other villages. There are 3 broad categories of educational activities that are being conducted - improving
quality of education, providing soft infrastructure and running of school buses for girl children.
During 2005-06, the following activities were carried out:
Improving Quality of education
Primary school teacher training workshops : One 4- day workshop was held with 15 teachers from 12 villages, to
provide training to primary school teachers.
Remedial classes : Two remedial classes were run for students of 7th and 8th standards in Kheramurar and
Mohammadpur villages, with a total of 112 children. The results were encouraging. For example, 13 children
passed the 8th standard exam in 2005, compared to the results in 2004 when only 1 child passed the exam.
Creative educational programmes : Creative educational programmes were conducted at two centres, 1
in Kheramurar and 1 in Mohammadpur, with a total of 128 children. These programmes focus on elements of
personality development and interactive learning.
Tutorials for school dropouts : Special tutorial classes were organised for school dropout children in Kheramurar
and Mohammadpur villages.
Curriculum Development : A manual has been developed that focuses on enhancing the personality of the
children, enabling children to think, question, introspect and develop the ability to express, analyze and
socialize.
Life-skills classes for girls : Stitching centre for girls was started in Mohammadpur with 10 girls in the age group
of 14-18.
Agriculture education programme for the Community : Two workshops were organised in partnership with Krishi
Vigyan Kendra, Bawal on mushroom cultivation.
Providing Soft Infrastructure
AIS provided the following infrastructure during 2005 - 06 after doing a need assessment survey in 17 schools :
Distribution of teaching material like stationary, sport kits, uniforms, etc.
Appointment of voluntary teachers in 17 schools.
Renovation of mid - day meal room and repair of water tanks in Chirara village.
Development of playground in Suthani village.
School buses for girl children
AIS continues to provide school bus services for over 350 girl children in 18 villages surrounding AIS’s Auto Glass Plant
at Rewari.
29
Health
The following activities were undertaken in 2005-06 :
Health camps: 5 health camps were conducted in Jaliawas, Suthani, Tihara, Banipur and Kalrawas villages. These
camps provided access to primary health services, distribution of medicines, vaccinations and referrals to the
Bawal Community Health Centre. The average number of beneficiaries were 180 per camp.
Reorientation training to health service providers : Reorientation training programmes were conducted for
ANMs, traditional birth attendants and registered medical practitioners.
Health awareness campaigns: Awareness activities including wall writing, folk songs and film shows were
undertaken to disseminate information on several health related issues. Three teams covered 17 villages,
reaching one village every week. Focused Group Discussions (FGD) were conducted which revolved around issues
like maternal health, fertility, food during pregnancy, child health. A total of 18 FGDs were conducted with 290
community members.
Water Supply
Access to safe drinking water is a major problem in 17 villages of Bawal block of Rewari District. The ground water
table is very low and the water is saline. To address these problems, Mr. Tarun Bharat Singh, an expert on rain
water harvesting was contacted to understand the dynamics of rain water harvesting. As advised, village johads were
renovated in Chirara and Tihara villages with the aim to raise the ground water level through rain water harvesting.
Sanitation
The following programmes / activities were carried out in 2005-06 to improve sanitation :
Considering the widely prevalent practice of open defecation in villages, awareness programmes were
conducted in villages, highlighting importance of sanitation.
Training workshops were orgainsed for masons from 17 villages for imparting training in low cost toilet
construction.
Environment and Safety
AIS follows a structured and documented system of best practices in environment and safety. AIS has been carrying
out the following activities to protect and safeguard environment :
Conversion of arid land into lush green belts.
Upgradation of manufacturing and other processes to ensure the least possible impact on environment.
Conducting tree plantation campaigns.
Rain water harvesting at plants.
Recycling of wastepaper.
AIS has been promoting safety standards across its operations through well designed and customised safety
programmes. These programmes are implemented on regular and continous basis under the guidance and supervision
of plant based safety officers.
30
To the Members,
The Directors are pleased to present the 21st Report with the audited accounts for the year ended 31st March, 2006.
Financial Highlights
(Rs. Millions)
2005 – 06 2004 – 05
Gross Turnover 7031.57 6915.27
Net Turnover 5876.74 5866.04
Other Income 36.49 74.08
Total Income 5913.23 5940.12
Operating Profit (PBDIT) 1229.21 1288.57
Gross Profit (PBDT) 1120.95 1257.01
Profit Before Tax 912.34 849.83
Profit After Tax 862.65 782.83
Appropriations:
– Interim Dividend on Equity Shares – 79.96
– Dividend on Preference Shares – 3.83
Proposed Dividend on:
– Equity Shares 95.96 119.95
– Preference Shares 0.01 0.01
Tax on Dividend 13.46 27.78
General Reserve 89.96 595.53
Balance Carried to Balance Sheet 693.53 30.27
Performance Overview Auto Glass SBU
During the year under review, the Gross sales of the AIS Auto Glass recorded gross sales of Rs. 4,442.15
Company increased 1.7 per cent to Rs. 7,031.57 million million, up 16.1 per cent from previous year. Sales to
from Rs. 6,915.27 million in 2004-05. Profit before tax OEM customers increased 8.1 per cent to Rs. 3,567.62
increased 7.4 per cent from Rs. 849.83 million in the million. After market sales increased 25 per cent to
previous year to Rs. 912.34 million. Profit after tax grew Rs. 656.56 million. AIS Auto Glass made export sales of
to Rs. 862.65 million from Rs. 782.83 million in the Rs. 47.68 million.
previous year, recording a growth of 10.2 per cent.
Production of tempered glass and laminated
In order to bring uniformity in accounting policy across windshields increased 8.9 per cent and 13.1 per cent,
its SBUs, the Company changed the depreciation policy to 29,37,861 sq.mtrs. and 15,79,721 pcs. respectively,
in AIS Auto Glass, the Auto Glass SBU, from “Written compared to previous period levels. AIS Auto Glass
Down Value” to “Straight Line Method”. This resulted recorded sales of 28,89,022 sq.mtrs. of tempered glass
in a lower depreciation charge for the year by Rs. 147.64 and 15,61,002 pcs. of laminated windshields, which
million and write back of depreciation of Rs. 400.78 is higher 7.3 per cent and 12.8 per cent respectively,
million relating to earlier years. Resultantly, the profits compared to the last year.
of the company were impacted to the extent.
31
Float Glass SBU 2) BVQI Certification for ISO 14001 : 2004, JIS Q 14001 :
2004 awarded to AIS’s Auto Glass Plant at Bawal.
The performance of AIS Float Glass, the Float Glass SBU,
was impacted as the Taloja Plant remained shut for over Consolidated Financial Statements
3 months due to flooding. Resultantly, the gross sales
of AIS Float Glass declined 16.2 per cent to Rs. 2,589.42 As required pursuant to the Accounting Standards, as
million. During the year, 24.42 million converted sq. mtr. applicable, the Consolidated Financial Statements of
(csqm.) of float glass was produced as against 30.68 AIS are attached herewith and form part of the Annual
million csqm. last year, down by 20.4 per cent. Report and Accounts.
A detailed analysis of the Company’s operations in terms
of performance in markets, manufacturing achievements, Dividend
business outlook, risks and concerns form a part of
the Management Discussion and Analysis, which is a Your Directors have recommended a dividend of
separate chapter of this Annual Report. Re. 0.60 per equity share on 15,99,27,586 equity
shares of Re. 1/- each for the financial year ended
31st March, 2006. The above dividend recommended by the
Subsidiary Company Board of Directors, if approved at the forthcoming Annual
General Meeting, will be paid to all those shareholders
AIS Glass Solutions whose names appear in the Register of Members as on
25th July, 2006.
During 2005-06, AIS Glass Solutions Ltd., set up as a
subsidiary of AIS, emerged as the largest architectural Your Directors have also recommended a dividend
glass processor in the country by the end of the year. @ 0.01% on 6,00,000 non-cumulative redeemable
preference shares of Rs. 100/- each for the financial year
AIS Glass Solutions recorded a turnover of Rs. 120.11 ended 31st March, 2006. These preference shares were
million in its first year of operations. The net loss of issued to Asahi Glass Co., Ltd. pursuant to the Scheme
the Company during the year under review was Rs. 4.73 of Amalgamation of the erstwhile Floatglass India Ltd.
million. with the Company.
As required pursuant to provisions of Section 212 of the Bonus Shares
Companies Act, 1956, the statement and accounts of AIS
Glass Solutions are annexed to this Report. Pursuant to the recommendation of the Board of Directors
at its meeting held on 24th May, 2005, the shareholders of
Projects the Company, in their meeting held on 26th July, 2005, had
approved the bonus issue of 7,99,63,793 equity shares
The project work at the Integrated Glass Plant at Roorkee of Re. 1/- each of the Company in the ratio of 1:1. The
in the state of Uttaranchal is proceeding as per schedule. bonus shares were allotted to the members whose names
The plant will become operational by December, appeared in the register of members as on the record date,
2006. This is the single largest investment made by i.e., 2nd September, 2005. These shares have since been
your Company. The plant would be an integrated and listed on the Bombay Stock Exchange and the National
composite plant with manufacturing facilities for value- Stock Exchange.
added glass like reflective glass and mirror, architectural
processed glass and glass products, automotive safety
glass and float glass. Directors
During the year, Asahi Glass Co., Ltd. nominated
Awards Mr. Keizaburo Kojima in place of Mr. K. Miyazawa as
Technical Director. Mr. Miyazawa, accordingly, resigned
Your Directors have pleasure in reporting the following from the Directorship of the Company with effect from
awards/recognitions that your Company received during 12th August, 2005.
the year:
Mr. Keizaburo Kojima, the Nominee Director of Asahi
1) “Vendor Performance Award-Overall Commendation” Glass Co., Ltd., has been appointed as Whole-time Director
from Maruti Udyog Ltd. and “Supplier Performance and designated as Technical Director of the Company with
Award for Best Performance in Quality” from effect from 12th August, 2005. Your Company has already
Mahindra & Mahindra Ltd. received the requisite approval of the Central Government
32
to this effect. Pursuant to provisions of Section 260 and the forthcoming Annual General Meeting. The requisite
Article 73 of the Articles of Association of the Company, disclosure regarding appointment and re-appointment
Mr. Kojima holds office up to the date of forthcoming of Directors has been made in the Report on Corporate
Annual General Meeting. A notice under Section 257 Governance which forms part of the Directors’ Report.
of the Companies Act, 1956 has been received from a
member proposing the candidature of Mr. Keizaburo Listing
Kojima as Director of the Company.
The equity shares of the Company continue to be listed
As required pursuant to Clause 49 of the at the Bombay Stock Exchange (BSE) and the National
Listing Agreement, as amended effective from Stock Exchange (NSE).
1st January, 2006, Mr. Naohiko Munakata and Mr. Rahul
Rana were appointed as Additional Directors, in the The Company has paid the requisite listing fee to the
capacity of “Independent Directors”, with effect from stock exchanges for the financial year 2005-06.
30th December, 2005. Mr. Naohiko Munakata, Chairman
and Managing Director of Mitsubishi Corporation The application filed by the Company for voluntary
India Pvt. Ltd., returned to Japan after completion delisting of equity shares of the Company from the
of his tenure in India and accordingly, tendered Calcutta Stock Exchange is pending at the stock
his resignation from the Board of Directors of the exchange. The matter is being regularly followed up.
Company with effect from 14th April, 2006. Mr. Kazumi
Yoshimura was appointed as Additional Director in the
capacity of “Independent Director” with effect from Directors’ Responsibility Statement
16th May, 2006 in place of Mr. Naohiko Munakata.
Mr. Rahul Rana and Mr. Kazumi Yoshimura holds office Pursuant to Section 217(2AA) of the Companies Act,
as Additional Directors up to the date of the ensuing 1956, the Directors hereby state and confirm that:
Annual General Meeting. Notices under Section 257
have been received from the members of the Company 1) In the preparation of annual accounts for the financial
signifying their intention to propose the candidature of year ended 31st March, 2006, the applicable
Mr. Rahul Rana and Mr. Kazumi Yoshimura as Directors accounting standards have been followed alongwith
of the Company at the forthcoming Annual General proper explanation relating to material departures.
Meeting.
2) Appropriate accounting policies have been selected
Asahi Glass Co., Ltd. nominated Mr. Masayuki Kamiya and applied consistently and judgments and
in place of Mr. Pierre Kirschen as Director on the Board estimates have been made that are reasonable and
of Directors of the Company. Mr. Kirschen resigned prudent so as to give a true and fair view of the state
from the Directorship of the Company with effect from of affairs of the Company as at 31st March, 2006 and
22nd March, 2006. Mr. Masayuki Kamiya has been of the profit for the period from 1st April, 2005 to
appointed as Additional Director on the Board of 31st March, 2006.
Directors of the Company with effect from 16th May, 2006.
Mr. Kamiya holds office up to the date of forthcoming 3) Proper and sufficient care has been taken for the
Annual General Meeting. A notice under Section 257 maintenance of adequate accounting records in
of the Companies Act, 1956 has been received from a accordance with the provisions of the Companies
member proposing the candidature of Mr. Kamiya for Act, 1956 for safeguarding the assets of the Company
the office of Director of the Company. and for preventing and detecting fraud and other
irregularities.
The Board records its appreciation of the services
rendered to the Company by the Directors who resigned 4) The annual accounts for the financial year ended
during the year. 31st March, 2006 have been prepared on a going
concern basis.
In terms of Article 70 of the Articles of Association of
the Company, Mr. B.M. Labroo and Mr. Gautam Thapar, Corporate Governance
Directors retire by rotation and, being eligible, offer
themselves for re-appointment. A separate Report on Corporate Governance along with
General Shareholders Information as prescribed under
The necessary resolutions for obtaining approval of the Listing Agreement is annexed as a part of this Report
the members have been incorporated in the notice of along with the Auditors’ Certificate.
33
Fixed Deposits amended, is set out in Annexure ‘B’ to the Directors’
Report. However, as per the provisions of Section 219
Your Company has not accepted any deposits within (b) (iv) of the Companies Act, 1956, the Report and the
the meaning of Section 58A of the Companies Act, 1956 Accounts are being sent to all the shareholders of the
and, as such, no amount of principal or interest was Company excluding the aforesaid information. Any
outstanding as on the balance sheet date. shareholder interested in obtaining such information
may write to the Company Secretary at the Registered
Office or the Corporate Office of the Company. The
Auditors and Auditors’ Report said information is also available for inspection at the
Corporate Office during working hours up to the date of
M/s. Jagdish Sapra & Co., Chartered Accountants,
Statutory Auditors of the Company hold office till the the Annual General Meeting.
conclusion of the forthcoming Annual General Meeting
and, being eligible, offer themselves for re-appointment. None of the employees listed in Annexure ‘B’ is a relative
The Company has received a letter from the Auditors to of any Director of the Company.
the effect that their re-appointment, if made, would be
within the prescribed limits under Section 224 (1B) of None of the employees listed in Annexure ‘B’ hold,
the Companies Act, 1956. either by himself or along with his spouse and dependent
children, more than two percent of the equity shares of
The observations of the Auditors in the Audit Report the Company.
are explained, wherever necessary, in the appropriate
notes to the accounts. Industrial Relations
In terms of provisions of Clause ix (a) of the Companies Your Company has taken significant steps in developing
(Auditors’ Report) Order, 2003, the Auditors’ have Human Resource and strengthening Human Resource
commented that there were no undisputed amounts Systems.
payable by the Company in respect of income tax, sales
tax, wealth tax, service tax and customs duty in arrears, During the year under review, industrial relations in the
as at 31st March 2006 for a period of more than six Company continued to be cordial and peaceful.
months from the date these became payable except the
excise duty of Rs. 3.13 million. The Company has since
deposited the said excise duty of Rs. 3.13 million on
Acknowledgement
6th May, 2006.
The Board wishes to place on record its sincere
appreciation for the continued assistance and support
Your Directors wish to state that the excise duty liability
extended to the Company by the collaborators,
of Rs. 3.13 million could not be ascertained timely due to
customers, banks, vendors, Government authorities
delay in reconciliation of price revision with a customer.
and employees.
The excise duty was deposited on 6th May, 2006 after
completion of reconciliation.
Your Directors acknowledge with gratitude the
encouragement and support extended by our valued
Conservation of Energy, Research & shareholders.
Development, Technology Absorption, On behalf of the Board of Directors
Foreign Exchange Earnings and Outgo
B.M. Labroo
The information as required under Section 217(1)(e)
Chairman
of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is given in Annexure ‘A’, which
Place : Gurgaon (Haryana)
forms part of this Report.
Dated : 16th May, 2006
Particulars of Employees
The information as required in accordance with Section
217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, as
34
Annexure - A
Information as per Section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosures of Particulars in the Report of the Directors) Rules, 1988 and forming part of the
Directors’ Report for the year ended 31st March, 2006.
Form – A
Conservation of Energy
Power and Fuel Consumption Units 2005 – 06 2004 – 05
1. Electricity Purchased (KWH) Units 3,28,30,825 3,32,22,034
Total Amount Rs. Millions 131.49 121.50
Rate Per Unit Rs. 4.01 3.66
2. Captive Generation
D.G Sets (KWH) Units 5,88,77,601 5,16,56,953
Total Amount ( Fuel, Mobil Oil & Additives ) Rs. Millions 307.24 289.85
Rate Per Unit Rs. 5.22 5.61
3. HSD Consumption Ltrs. 8,18,363 14,19,629
Total Amount Rs. Millions 24.00 33.28
Rate Per Litre Rs. 29.33 23.44
4. LDO Consumption Ltrs. 49,79,416 1,11,19,926
Total Amount Rs. Millions 133.53 242.20
Rate Per Litre Rs. 26.82 21.78
5. HFO Consumption Ltrs. 96,20,235 21,03,303
Total Amount Rs. Millions 153.66 23.90
Rate Per Litre Rs. 15.97 11.36
6. SKO Consumption (Kerosene Oil) Ltrs. 96,000 NIL
Total Amount Rs. Millions 2.33 NIL
Rate Per Litre Rs. 24.26 NIL
7. LSHS Consumption Kgs. 2,25,00,640 3,11,41,221
Total Amount Rs. Millions 319.78 339.42
Rate Per Kg Rs. 14.21 10.90
35
The following energy conservation measures were backlites and 500,000 laminated windshields
taken which contributed towards saving and optimising respectively.
energy consumption : b. At Rewari Plant, the CRB furnace was installed
and commissioned. Besides, two pre-process
AIS Auto Glass cutting lines with on-line drilling facilities were
commissioned.
a. Loading efficiency of various furnaces was enhanced
by increasing the number of moulds/ glasses per AIS Float Glass
cart/cycle.
b. Tacts of the various equipments were rationalised in a. Upgradation of batch house and DCS.
order to get minimum possible power consumption. b. Installation of pneumatic system for raw material
c. Usage of energy efficient lamps such as T5 tube handling.
lights and metal halide lamps have resulted into c. Successful commissioning of indigenous lehr drive
saving of 70,000 units per annum in utility power system.
consumption. d. Commissioning of automated Float Table.
d. Usage of variable frequency drive motor instead of
the normal starters as blower motors have resulted Form – C
into substantial amount of power saving.
Research and Development
AIS Float Glass
During the year under review, in addition to focussing on
a. Replaced conventional chokes of tube lights with increasing process efficiencies by way of automation and
energy efficient chokes to save energy. development, the following machines were developed:
b. Optimised miscellaneous power supply voltage by
Energy Saver. a. Offline CNC drilling machine for auto glass with
c. Installation of energy efficient air dryers. automatic loading device.
d. Installation of controllers for cooling tower. b. Online CNC drilling machine for auto glass.
c. Printing machines for windshields, backlites and
sidelites.
Consumption Per Unit of Production d. Laminating line for architectural processing.
e. Continuous rubber bag system.
AIS Auto Glass f. Automatic loading devices for bent glass washing
machine and bending furnaces.
Energy consumption per square meter production of g. Heat soak oven.
auto glass worked out to 16.11 KWH (15.16).
Form – D
AIS Float Glass
Foreign Exchange Earnings & Outgo
Energy consumption per converted square meter
production of float glass was as under: Foreign exchange outflow on account of import of
capital goods, raw materials and stores and spare parts
a. Electricity consumption (KWH) 0.58 (0.60) amounted to Rs. 3595.37 million (Rs. 1406.08 million).
b. Furnace oil consumption (Ltr.) 0.01 (0.02) Other expenditure in foreign currency amounted to
Rs. 292.05 million (Rs. 102.22 million). Remittances in
c. LSHS consumption (Kg.) 0.91 (1.02)
foreign currency on account of dividends (net of taxes)
amounted to Rs. 32.45 million (Rs. 65.71 million).
Form – B Earnings in foreign exchange amounted to Rs. 83.98
million (Rs. 230.91 million).
Technology Absorption, Adaptation (Figures in brackets pertain to previous year)
and Innovation
AIS Auto Glass
a. Completed phase II and III expansion at Chennai
Plant, adding capacities for 1-1.2 million tempered
36
Philosophy on Corporate Governance
AIS’s philosophy on Corporate Governance envisages achieving the highest standards of accountability, transparency
and equity in all its spheres and in all its dealings with its stakeholders. AIS is committed to establish and diligently
follow the highest standards of Corporate Governance practices in its pursuit of profitable growth. AIS’s Corporate
Governance practices are driven by strong board oversight, timely disclosures, transparent accounting policies and
high levels of integrity in decision-making.
AIS continues to follow procedures and practices in conformity with the Code of Corporate Governance as stipulated
by SEBI.
Board of Directors
AIS believes that an active, independent and participative board is a pre-requisite to achieve and maintain the
desired level of Corporate Governance. At AIS, the Board approves and reviews strategy and oversees the actions
and results of management.
The Company is managed by the Managing Director & C.E.O. and the three Executive (Whole-time) Directors.
Composition of the Board
The Board at AIS has an optimum combination of Executive, Non-Executive and Independent Directors. The Board
comprises of a total of eleven Directors, out of which seven Directors are Non-Executive Directors. The Company has
a Non-Executive Chairman and more than one third of the total strength of the Board comprises of Independent
Directors.
Board Procedures
Detailed agenda with explanatory notes and related information is circulated to the members of the Board in
advance of each meeting. The meetings are usually held at AIS’s Corporate Office. Presentations are made to the
Board, covering major functions and activities. The requisite information is made available to the Board to ensure a
transparent decision making process at the Board.
Number of Board meetings
During the financial year, the Board of Directors of the Company met five times on 24th May, 2005, 26th July, 2005,
31st October, 2005, 30th December, 2005 and 24th January, 2006. The maximum time gap between any two Board
meetings was less than four months.
37
Information relating to Directors
The details relating to composition and categories of the Directors on the Board, their attendance at Board Meetings
during the year and at the last Annual General Meeting, the number of directorship, committee membership and
chairmanship held by them in other public limited companies, as on 31st March, 2006, are presented below :
Name of the Designation Category Attendance Particulars Outside Directorship,
Directors Committee Membership and
Chairmanship
Number of Board Last Directorship Commitee Commitee
Meetings AGM Member- Chairman-
ship ship
Held Attended
Mr. B. M. Labroo Chairman PD/NED 5 5 YES 4 2 –
Mr. S. Labroo Managing PD/ED 5 5 YES 10 2 –
Director and
C.E.O.
Mr. K. Miyazawa* Technical PD/ED 5 2 YES 1 – –
Director
Mr. K. Kojima** Technical PD/ED 5 2 YES 1 – –
Director
Mr. M. Kamiya@ Director PD/NED 5 N.A. N.A. – – –
Dr. S. Kapur Director ID 5 3 YES 8 5 2
Mr. J. Khattar Director PD/NED 5 4 YES 4 – –
Mr. P. Kirschen@ Director PD/NED 5 3 YES – – –
Mr. N. Munakata*** Director ID 5 1 N.A. 1 – –
Mr. R. Rana**** Director ID 5 1 N.A. – – –
Mr. G. Thapar Director ID 5 4 YES 11 6 2
Mr. K. Yoshimura*** Director ID 5 N.A. N.A. 1 – –
Mr. P. L. Safaya Director and ED 5 4 YES 2 – –
C.O.O. (Float)
Mr. A. Singh Director and ED 5 5 YES 3 – –
C.O.O. (Auto)
* Resigned w.e.f. 12th August, 2005
** Appointed w.e.f. 12th August, 2005
@ Mr. M. Kamiya was appointed as Director w.e.f. 16th May, 2006 in place of Mr. P. Kirschen who resigned w.e.f. 22nd March, 2006
*** Mr. N. Munakata was appointed as Director w.e.f. 30th December, 2005 who subsequently resigned w.e.f. 14th April, 2006
Mr. K. Yoshimura was appointed as Director w.e.f. 16th May, 2006 in place of Mr. N. Munakata
**** Appointed w.e.f. 30th December, 2005
PD – Promoter Director; NED – Non-Executive Director; ID – Independent Director; ED – Executive Director; N.A. – Not Applicable
38
Information to the Board
The information being provided to the Board includes :
– Annual operating plans and budgets and any update thereof;
– Capital budgets and any updates thereof;
– Quarterly results of the Company operating divisions and business segments;
– Minutes of meetings of the Audit Committee and other Committees of the Board;
– Materially important show cause, demand, prosecution and penalty notices;
– Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems;
– Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold
by the Company;
– Any issue which involves possible public or product liability claims of substantial nature, including any judgement
or order which, may have passed strictures on the conduct of the Company or taken an adverse view regarding
another enterprise that can have negative implications on the Company;
– Details of any joint venture or collaboration agreement;
– Transactions that involve substantial payment towards goodwill, brand equity or intellectual property;
– Significant labour problems and their proposed solutions. Any significant development in Human Resources/
Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme, etc.;
– Sale of material nature of investments, subsidiaries and assets which is not in the normal course of business;
– Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse
exchange rate movement, if material;
– Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as non-
payment of dividend, delay in share transfer, etc.
Shares and convertible instruments held by Non-Executive Directors
Mr. B.M. Labroo, Dr. S. Kapur, Mr. R. Rana and Mr. G. Thapar held 1,38,33,920 equity shares, 19940 equity shares,
1,00,000 equity shares and 56,000 equity shares, respectively as on 31st March, 2006. No other Non-Executive
Director held any equity share as on that date.
Code of Conduct
The Board at its meeting held on 24th May, 2005 has adopted the Code of Conduct for members of the Board and
Senior Management. The Code lays down, in detail, the standards of business conduct, ethics and governance.
A copy of the Code has been posted on the Company’s website, www.asahiindia.com.
The Code has been circulated to all the members of the Board and Senior Management and the compliance of same
has been affirmed by them. A declaration signed by the Managing Director & C.E.O. to this effect is given below :
I hereby confirm that :
The Company has obtained from all the members of the Board and Senior Management an affirmation that they
have complied with the Code of Conduct in financial year 2005-06.
S. Labroo
Managing Director & C.E.O.
Risk Management
The Company has laid down a detailed policy framework for risk assessment and risk management. The mapping of
risks across all SBUs of the Company and the laying down of risk mitigation measures have been completed. The risk
mitigation measures are being implemented as per schedule and reported to the Board and the Audit Committee.
39
Committees of the Board
AIS has three Board Committees – Audit Committee, Remuneration Committee and Shareholders’/Investors’ Grievance
Committee.
Details regarding role and composition of the Board Committees, including the number of meetings held during the
financial year 2005-06 and attendance of the members thereat are provided below :
a) Audit Committee
The Audit Committee comprises of three Non-Executive Directors with majority of them being Independent Directors.
All the members of the Committee have accounting and financial management expertise. The composition of the
Audit Committee is as under :
1) Dr. S. Kapur – Chairman
2) Mr. J. Khattar – Member
3) Mr. G. Thapar – Member
The Audit Committee met four times during the financial year on 19th May, 2005 (adjourned to 24th May, 2005),
26th July, 2005, 30th October, 2005 and 24th January, 2006. The time gap between any two meetings was less than
four months. The attendance details of the members are given below :
Name of Members Status Number of meetings
Held Attended
Dr. S. Kapur Chairman 4 4
Mr. J. Khattar Member 4 3
Mr. G. Thapar Member 4 4
The Chief Financial Officer, the Statutory Auditors and the Internal Auditors are permanent invitees to the
Committee.
Mr. R. Mukhija, Head–Legal & Company Secretary acts as the Secretary to the Audit Committee.
The functions of the Audit Committee of the Company include the following :
Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure
that the financial statements are correct, sufficient and credible;
Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of
Statutory Auditors and the fixation of audit fees;
Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors;
Reviewing, with the management, the annual financial statements before submission to the Board for approval,
with particular reference to:
– Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report
in terms of clause (2AA) of section 217 of the Companies Act, 1956;
– Changes, if any, in accounting policies and practices and reasons for the same;
– Major accounting entries involving estimates based on the exercise of judgement by management;
– Significant adjustments made in the financial statements arising out of audit findings;
– Compliance with listing and other legal requirements relating to financial statements;
– Disclosure of any related party transactions;
– Qualifications in the draft audit report;
40
Reviewing, with the management, the quarterly financial statements before submission to the Board for
approval;
Reviewing, with the management, performance of Statutory and Internal Auditors and adequacy of the internal
control systems;
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;
Discussion with Internal Auditors on any significant findings and follow up thereon;
Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected
fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the
Board;
Discussion with Statutory Auditors, about the nature and scope of audit as well as post-audit discussion to
ascertain any area of concern;
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;
Carrying out any other function as is mentioned in the terms of reference of the Audit Committee;
Reviewing the Management Discussion and Analysis of financial condition and results of operations; and
Reviewing the financial statements, in particular, the investments made by the unlisted subsidiary Company.
b) Remuneration Committee
The Remuneration Committee has been constituted to review and recommend to the Board the remuneration package
of the Managing Director & C.E.O. and the Whole-time Directors. Such recommendations are made, considering the
overall performance and annual financial results of the Company.
The Remuneration Committe comprises of three Non-Executive Directors and one Executive Director. The composition
of the Remuneration Committee is as under :
1) Mr. G. Thapar – Chairman
2) Dr. S. Kapur – Member
3) Mr. K. Kojima – Member
4) Mr. B.M. Labroo – Member
During the financial year 2005-2006, the Remuneration Committee met two times on 24th May, 2005 and
26th July, 2005. The attendance details of the members are given below :
Name of Members Status Number of meetings
Held Attended
Mr. G. Thapar Chairman 2 2
Dr. S. Kapur Member 2 2
Mr. K. Kojima* Member N.A. N.A.
Mr. B.M. Labroo Member 2 2
Mr. K. Miyazawa* Member 2 2
* Mr. K. Kojima was inducted as a member w.e.f. 12th August 2005 in place of Mr. K. Miyazawa who ceased to be a member
w.e.f. 12th August, 2005.
41
The Remuneration Committee in its meeting held on 11th May, 2006 recommended that no commission was due to be
paid to the Managing Director & C.E.O., Director & C.O.O. (Float) and Director & C.O.O. (Auto) considering performance
of the Company in the financial year 2005-06. The Board of Directors in its meeting held on 16th May, 2006 considered
the recommendation of the Remuneration Committee and approved the same. Accordingly, no commission is being
paid to the Managing Director & C.E.O., Director & C.O.O. (Float) and Director & C.O.O. (Auto) on the profits of the
Company for the financial year 2005-06.
No commission is being paid to the Non-Executive Directors for the financial year 2005-06, pursuant to approval at
the Board meeting held on 16th May, 2006.
During the financial year 2005-06, the Company did not issue any stock options to its Directors and employees.
c) Shareholders’/Investors’ Grievance Committee
The Shareholders’/Investors’ Grievance Committee has been constituted to specifically look into redressal of
shareholder and investor complaints and other shareholder related issues. The Committee approves transfer,
transmission of shares and issues like split, sub-division, consolidation of securities, issue of duplicate certificates,
dematerialisation/rematerialisation of shares, etc.
The Shareholders’/Investors’ Grievance Committee comprises of one Non-Executive Director and two Executive
Directors. The composition of the Shareholders’/Investors’ Grievance Committee is as under:
1) Mr. B.M. Labroo – Chairman
2) Mr. S. Labroo – Member
3) Mr. A. Singh – Member
The Committee met nine times during the year. The attendance details of the members of the Committee are given
below :
Name of Members Status Number of meetings
Held Attended
Mr. B. M. Labroo Chairman 9 3
Mr. S. Labroo Member 9 9
Mr. A. Singh Member 9 9
Status of Shareholder Queries/Grievances
Details of queries and grievances received and attended to by the Company during the financial year 2005-06 are
given below :
Correspondences
Particulars Transfer of Change of Non-receipt of Others Complaints Total
shares Address dividend/share
certificates
Recieved during the year 1813 1643 4453 1478 64 9451
Attended during the year 1813 1630 4441 1465 64 9413
Pending as on 31st 0 13 12 13 0 38
March, 2006*
* Pending grievances/complaints have since been redressed
42
Remuneration to Directors
The details of remuneration paid/payable to the Directors for the financial year 2005-06 are given below :
Name of the Sitting Fees Salary, Allowances Performance Commission Total
Directors (Rs.) and Perquisites Linked Incentive (Rs.) (Rs.)
(Rs.) (Rs.)
Mr. B.M. Labroo 1,40,000/- NIL NIL NIL 1,40,000/-
Mr. S. Labroo NIL 20,23,801/- NIL NIL 20,23,801/-
Mr. K. Miyazawa NIL 49,10,858/- NIL NIL 49,10,858/-
Mr. K. Kojima NIL 11,28,141/- NIL NIL 11,28,141/-
Mr. M. Kamiya NIL NIL NIL NIL NIL
Dr. S. Kapur 1,80,000/- NIL NIL NIL 1,80,000/-
Mr. J. Khattar 1,40,000/- NIL NIL NIL 1,40,000/-
Mr. P. Kirschen 60,000/- NIL NIL NIL 60,000/-
Mr. N. Munakata 20,000/- NIL NIL NIL 20,000/-
Mr. R. Rana 20,000/- NIL NIL NIL 20,000/-
Mr. G. Thapar 2,00,000/- NIL NIL NIL 2,00,000/-
Mr. K. Yoshimura NIL NIL NIL NIL NIL
Mr. P.L. Safaya NIL 19,91,975/- NIL NIL 19,91,975/-
Mr. A. Singh NIL 19,09,732/- NIL NIL 19,09,732/-
None of the Directors are related to each other, except Mr. S. Labroo who is related to Mr. B.M. Labroo.
Compliance Officer
Mr. Tilak Sethi, Dy. Company Secretary is the Compliance Officer of the Company.
Management
Management Discussion and Analysis
A separate chapter on Management Discussion and Analysis is given in the Annual Report.
Disclosures
Disclosure of related party transactions
There have been no significant material related party transactions. The related party transactions are disclosed in
Note No. 20 in the Notes to the Accounts in the Annual Report. All details relating to business transactions where
Directors may have a potential interest are provided to the Board and the interested Directors neither participate in
the discussions nor do they vote on such matters.
43
Details of non-compliance by the Company
AIS has complied with all the requirements of the Stock Exchanges, SEBI and other statutory authorities.
Pursuant to the technical scrutiny of the Annual Report of the Company for the FY 2000-01 carried out by the Office
of Registrar of Companies, NCT of Delhi & Haryana (ROC), a notice was issued by the office of ROC, raising certain
queries and seeking clarification thereon. The Company submitted a detailed reply to the issues highlighted in
the said notice. Thereafter, the Company regularised the alleged technical defaults in the Balance Sheet for the
FY 2002-03 and applied suo-moto for compounding of the offence(s) before the Hon’ble Regional Director, Northern
Region, Kanpur. Taking cognizance, the Hon’ble Regional Director, vide its order dated 5th May, 2005, compounded
the offence. The compounding fees have been deposited by the Company and the requisite documents have been
filed with the Office of ROC for closure of the case.
SEBI had launched adjudication proceedings against the Company for delay in making the disclosures as required
under the provisions of Chapter II of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The
adjudication proceedings have since been dropped pursuant to filing of requisite application by the Company under
SEBI Regularisation Scheme, 2002.
Code for prevention of Insider Trading practices
In terms of the provisions of SEBI (Prevention of Insider Trading Regulations), 2002, as amended, the Company
has formulated a “Code of internal procedure & conduct for prevention of insider trading”. The Code lays down the
guidelines and advises the designated employees on procedures to be followed and disclosures to be made while
dealing in shares of the Company.
Shareholders
Disclosure regarding appointment and re-appointment of Directors
Appointment of Directors
During the year, Mr. K. Kojima, Mr. N. Munakata and Mr. R. Rana were appointed as Additional Directors on the Board
of Directors of the Company. A brief resume of the Directors is given below :
Mr. K. Kojima
Mr. K. Kojima, aged 59 years, got a Master Degree from School of Science & Technology, Keio University, Tokyo.
Mr. Kojima, who joined Asahi Glass Co., Ltd., Japan (AGC) in 1972, has held various positions in AGC. Before joining
AIS, Mr. Kojima was working as General Manager, AGC’s Automotive Glass Plant, Sagami. Mr. Kojima is a Director on
the Board of Directors of Shield Autoglass Ltd.
Mr. N. Munakata
Mr. N. Munakata, aged 56 years, is a Graduate from Faculty of Law, Osaka City University. Mr. Munakata, who joined
Mitsubishi Corporation in 1973, was working as Chairman & Managing Director of Mitsubishi Corporation India Pvt.
Ltd. Mr. Munakata has since returned to Mitsubishi Corporation, Japan, after completion of his tenure in India.
Mr. R. Rana
Mr. R. Rana, aged 43 years, is a Commerce Graduate and an MBA. Mr. Rana did graduation from Shri Ram College
of Commerce, University of Delhi. He completed his MBA from the University of Illinois at Urbana Champaign, USA.
Mr. Rana started his professional career with Salomon Brothers, New York. He spearheaded Structured Finance and
Derivatives for Salomon Brothers, Kidder Peabody, UBS – Dillon Read and ABN AMRO. Presently, Mr. Rana is the
President of BroadStreet Group, which is into Private Equity, Hedge Fund, Structured Finance and Derivatives.
Re-appointment of Directors
In terms of the provisions of the Companies Act, 1956 and Article 70 of the Articles of Association of the Company,
Mr. B.M. Labroo and Mr. G. Thapar will retire at the forthcoming Annual General Meeting of the Company, and
being eligible, offers themselves for re-appointment. Brief particulars of Mr. B.M. Labroo and Mr. G. Thapar are
given below:
44
Mr. B.M. Labroo
Mr. B.M. Labroo is the promoter and founding director of AIS. Mr. Labroo has Honours and Masters Degrees in
Political Science and has also done two courses in Marketing and Human Behavioural Science from Administrative
Staff College of India, Hyderabad. Mr. B.M. Labroo is on the Board of various companies which include McDowell &
Company Limited, Maltex Malsters Limited, Samir Paging Systems Limited and Shield Autoglass Limited.
Mr. G. Thapar
Mr. Gautam Thapar, aged 45 years, is a graduate in Chemical Engineering from Pratt University, USA. Mr. Thapar is
the Chairman of Crompton Greaves Limited and also the Vice-Chairman & Managing Director of Ballarpur Industries
Limited. He is also on the Board of various companies which include Bilt Paper Holdings Limited, Global Green
Company Limited, Solaris Chemtech Limited, CG Capital & Investments Limited, Greaves Cotton Limited, Compass
Limited, KCT Papers Limited, KCT Chemicals & Electricals Limited and Salient Business Solutions Limited.
Means of Communication with Shareholders
Financial Results
The financial results of AIS are communicated to all the Stock Exchanges where the Company’s equity shares are
listed. The results are published in leading English dailies and in a regional newspaper.
The details of the publications of the financial results in the year under review.
Description Date
Unaudited financial results for the first quarter ended 30th June, 2005 27th July, 2005
Unaudited financial results for the second quarter and the half year ended 1st November, 2005
30 th September, 2005
Unaudited financial results for the third quarter and the nine months ended 25th January, 2006
31 st December, 2005
Audited financial results for the fourth quarter and the year ended 17th May, 2006
31st March, 2006
Newsletters to Shareholders
The Company has been sending its financial and operational results and other relevant information regularly to all its
shareholders through a half yearly newsletter from the Managing Director & C.E.O.
Company’s Website
The website of the Company, www.asahiindia.com is regularly updated with the financial results, latest information
and the press releases issued by the Company from time to time.
Electronic Data Information Filing & Retrieval (EDIFAR)
All information, statements and reports, in such manner and format as required under Clause 51 of the Listing
Agreement, are posted on the EDIFAR website, www.sebiedifar.nic.in within such time as specified by SEBI.
45
General Body Meetings
The details of the last three Annual General Meetings are as follows:
Financial Year Category Time Day and Date Location of the meeting Special
Resolution(s)
passed
2004 –05 AGM 4.00 pm. Tuesday, 26th FICCI Golden Jubilee Yes
July, 2005 Auditorium, Federation
House, Tansen Marg,
New Delhi
2003 – 04 AGM 4.00 pm. Friday, 30th FICCI Golden Jubilee No
July, 2004 Auditorium, Federation
House, Tansen Marg,
New Delhi
2002 – 03 AGM 4.00 pm. Tuesday, 30th Auditorium II, Siri Fort Yes
September, Auditorium Complex,
2003 August Kranti Marg,
New Delhi
Compliance
Mandatory Requirements
The Company is fully compliant with the applicable mandatory requirements of the revised Clause 49.
Non-Mandatory Requirements
Maintenance of the Chairman’s office
The Company has a Non-Executive Chairman and is maintaining the Chairman’s office.
Remuneration Committee
All the requirements relating to the Remuneration Committee have been complied with and the details are provided
in the Annual Report.
Shareholders’ Rights/Information
Information like financial results, press releases, analyst meet presentation, etc. are displayed on the Company’s
website, www.asahiindia.com
Postal Ballot
During the financial year 2004-05, no Special Resolution was required to be passed through postal ballot. At the
ensuing Annual General Meeting, there are no items for approval through Postal Ballot.
General Shareholder Information
Annual General Meeting
Date : 28th July, 2006
Time : 3.00 pm.
Venue : FICCI Golden Jubilee Auditorium
Federation House, Tansen Marg,
New Delhi – 110 001
46
Financial Calendar
Financial year : 1st April to 31st March
For the year ended 31st March 2006, results were announced on :
First quarter : 26th July, 2005
Second quarter : 31st October, 2005
Third quarter : 24th January, 2006
Fourth quarter and annual : 16th May, 2006
For the year ending 31st March 2007, results will be announced by :
First quarter : End July, 2006
Second quarter : End October, 2006
Third quarter : End January, 2007
Fourth quarter and annual : End April, 2007/May, 2007
Book Closure
The dates of book closure : 25th July, 2006 to 28th July, 2006 (both days inclusive)
Dividend : Dividend of Re. 0.60 per equity share on 159,927,586 equity shares of
Re .1/- each.
Listing : Bombay Stock Exchange Limited (BSE); the National Stock Exchange
(NSE); and Calcutta Stock Exchange (being delisted voluntarily).
Stock Codes
ISIN No. : INE439A01020
BSE Stock Code : 515030
NSE Stock Code : ASAHIINDIA
Listing Fees : The listing fee for the financial year 2005-06 has been paid to the
BSE and NSE.
Stock Market Data
AIS’s Share Performance versus BSE Sensex (based on adjusted closing share price of AIS)
180 Sensex
160
140
120
AIS
100
80
60
40
20
0
Apr-05
May-05
June-05
July-05
Aug-05
Sept-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Note : AIS share price and BSE sensex are indexed to 100 as on 1st April, 2005
47
Monthly high and low share price of AIS for 2005-06 at BSE and NSE
Month Bombay Stock Exchange National Stock Exchange
High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
Apr – 05 179.00 150.00 177.00 149.00
May – 05 211.90 163.55 210.00 165.00
Jun – 05 190.00 170.00 199.00 171.10
Jul – 05 193.40 169.00 192.00 169.20
Aug – 05 185.00 160.00 185.00 159.80
Sep – 05 87.90* 74.60* 86.80* 75.00*
Oct – 05 91.00 69.25 93.60 63.10
Nov – 05 91.40 72.00 91.15 73.00
Dec – 05 96.50 87.00 98.30 87.10
Jan – 06 113.00 85.00 112.30 89.50
Feb – 06 118.00 105.25 118.00 105.90
Mar – 06 120.00 94.25 121.90 94.00
Source: www.bseindia.com, www.nseindia.com *Ex-Bonus price since September, 2005.
Distribution of Shareholding as on 31st March, 2006
Categories No. of Shareholders Percentage No. of shares held Percentage
1 – 5000 67,973 98.19 12,243,246 7.66
5001 – 10000 727 1.05 5,594,295 3.50
10001 – 20000 214 0.31 3,242,079 2.03
20001 – 30000 66 0.10 1,614,103 1.01
30001 – 40000 50 0.07 1,830,409 1.14
40001 – 50000 24 0.04 1,118,683 0.70
50001 – 100000 64 0.09 4,886,922 3.05
100001 and above 105 0.15 129,397,849 80.91
Total 69,223 100 159,927,586 100
48
Shareholding pattern as on 31st March, 2006
As on 31st March, 2006
Category
No. of Shares Percentage
A. Promoters’ Holding
1) Promoters
Indian Promoters 52,987,478 33.13
Foreign Promoters 35,520,000 22.21
2) Persons Acting in Concert NIL NIL
Total 88,507,478 55.34
B. Non-Promoters’ Holding
3) Institutional Investors
a. Mutual funds and UTI 4,679,738 2.93
b. Banks, Financial Institutions, Insurance Companies, etc. 2,869,471 1.79
c. FIIs 3,543,697 2.22
Total 11,092,906 6.94
4) Others
a. Private Corporate Bodies 18,930,074 11.84
b. Indian Public 37,873,808 23.68
c. NRIs /OCBs 2,973,076 1.86
d. Any Other:
Directors & Relatives (not in control of the Company) 550,244 0.34
Total 60,327,202 37.72
Grand Total 159,927,586 100.00
Dematerialisation of Shares
The shares of the Company are in compulsory demat segment. As on 31st March, 2006, 76,056,150 shares constituting
over 47% of equity capital of the Company were held in dematerialised form.
Outstanding GDRs/ ADRs/ Warrants/ Options
The Company has not issued any ADRs or GDRs or Warrants or Convertible instruments.
Registrar and Share Transfer Agent
The Company has appointed Intime Spectrum Registry Limited as its Registrar and Share Transfer Agent (RTA). The RTA
can be contacted at the following addresses :
Intime Spectrum Registry Limited (Mumbai) Intime Spectrum Registry Limited (Delhi)
C-13, Pannalal Silk Mills Compound, A-31, 3rd Floor,
L.B.S. Marg, Bhandup (W), Naraina Indl. Area, Phase-I,
Mumbai – 400 078 New Delhi – 110 028
Tel: 91-22-2596 3838; Fax: 91-22-2594 6969 Tel: 91-11-4141 0592-94; Fax: 91-11-4141 0591
Communication
Communication regarding share transfer, change of address, dividend, etc. can be addresed to the RTA at the
addresses given above. shareholders’ correspondence / communication is acknowledged and attended to within the
stipulated time, as applicable.
49
Auditors’ Certificate on Corporate Governance
To the Members of
Asahi India Glass Limited,
We have examined the compliance of conditions of Corporate Governance by Asahi India Glass Ltd. for the year ended
on 31st March, 2006 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination
was limited to procedures and implementations thereof adopted by the Company for ensuring the compliance of the
conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements
of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations
made by the Directors and the management, we certify that the Company has complied with conditions of Corporate
Governance as stipulated in the above mentioned Listing Agreement.
We state that no investor grievances are pending for a period exceeding one month against the Company, as per the
records maintained by the Shareholders’/Investors’ Grievance Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
For Jagdish Sapra & Co.
Chartered Accountants
Place : New Delhi Jagdish Sapra
Dated : 16th May, 2006 Partner
50
Auditors’ Report
To the Members,
ASAHI INDIA GLASS LIMITED
1) We have audited the attached Balance Sheet of c. The Balance Sheet, Profit and Loss Account and
Asahi India Glass Limited as at 31st March, 2006, Cash Flow Statement dealt with by this report are
the Profit and Loss Account and the Cash Flow in agreement with the books of account.
Statement for the year ended on that date
annexed thereto. These financial statements are d. In our opinion, the Balance Sheet, Profit and Loss
the responsibility of the Company’s management. Account and Cash Flow Statement dealt with by
Our responsibility is to express an opinion on this report comply with the accounting standards
these financial statements based on our audit. referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
2) We conducted our audit in accordance with
the auditing Standards generally accepted in e. On the basis of written representations received
India. Those standards require that we plan and from the directors, as on 31st March, 2006 and
perform the audit to obtain reasonable assurance taken on record by the Board of Directors, we
about whether the financial statements are report that none of the directors is disqualified as
free of material misstatement. An audit on 31st March, 2006 from being appointed as a
includes examining, on a test basis, evidence director in terms of clause (g) of sub-section (1) of
supporting the amounts and disclosures in the Section 274 of the Companies Act, 1956.
financial statements. An audit also includes
assessing the accounting principles used and f. In our opinion and to the best of our information
significant estimates made by management, as and according to the explanations given to us, the
well as evaluating the overall financial statement said accounts read together with the Notes and
presentation. We believe that our audit provides Significant Accounting Policies thereon, give the
a reasonable basis for our opinion. information required by the Companies Act, 1956,
in the manner so required and give a true and fair
3) As required by the Companies (Auditors’ Report) view in conformity with the accounting principles
Order, 2003 issued by the Central Government of generally accepted in India :
India in terms of sub-section (4A) of Section 227
of the Companies Act, 1956, we enclose in the i. In the case of the Balance Sheet, of the state of
Annexure, a statement on the matters specified in affairs of the Company as at 31st March, 2006;
paragraphs 4 and 5 of the said Order.
ii. In the case of the Profit and Loss Account, of the
4) Further to our comments in the Annexure referred Profit of the Company for the year ended on that
to above, we report that: date; and
a. We have obtained all the information and iii. In the case of the Cash Flow Statement, of the
explanations, which to the best of our cash flow for the year ended on that date.
knowledge and belief were necessary for the
purposes of our audit. For Jagdish Sapra & Co.
Chartered Accountants
b. In our opinion, proper books of account as
required by law have been kept by the Company Jagdish Sapra
so far as appears from our examination of Place : New Delhi Partner
those books. Dated : 16th May, 2006 M. No. 9194
51
Annexure to the Auditors’ Report
(Referred to in paragraph 3 of Auditors’ Report of even date)
1) a. The Company has maintained proper records per information and explanations given to us and
showing full particulars, including quantitative register under Section 301 produced before us.
details and situation of fixed assets.
d. Since no loans were taken from parties covered
b. Verification of fixed assets is being conducted in register under section 301, paras 4 (iii) (e), (iii)
in a phased programme by the management (f) and (iii) (g) of the Order are not applicable to
designed to cover all assets over a period of three Company.
years, which in our opinion is reasonable having
regard to the size of the company and the nature of 4) In our opinion and according to the information
assets. No material discrepancies were noticed and explanations given to us, there are adequate
on such verification. internal control procedures commensurate
with the size of the company and nature of its
c. The assets disposed off during the year are not business with regard to purchase of inventory,
significant and therefore do not affect the going fixed assets and for the sale of goods. There is
concern status of the Company. no sale of services during the year. During the
course of our audit we have not come across any
2) a. The inventory has been physically verified during continuing failure to correct major weaknesses in
the year by the management. In our opinion the internal control system.
frequency of verification is reasonable.
5) a. According to the information and explanations
b. In our opinion and according to the information given to us, we are of the opinion that the
and explanations given to us, the procedures of particulars of contracts or arrangements referred
physical verification of inventories followed by to in section 301 of the Companies Act, 1956,
the management are reasonable and adequate in have been entered in the register required to be
relation to the size of the Company and the nature maintained under that section.
of its business.
b. In our opinion and according to the information
c. On the basis of our examination of the records of and explanations given to us, the transactions
inventories, we are of the opinion that the Company made in pursuance of contracts or arrangements
has maintained proper records of inventory and entered in the register maintained under section
the discrepancies noticed on such verification 301 of the Companies Act, 1956 and exceeding the
between physical stocks and book records were value of Rupees Five Lakhs in respect of any party
not material. during the year have been made at prices which
are reasonable having regard to prevailing market
3) a. There are no companies, firms or other parties price at the relevant time.
covered in the register maintained under section
301 of the Companies Act, 1956 to which the 6) As the Company has not accepted any deposits
Company has granted any loans, secured or from the public, paragraph 4 (vi) of the Order is
unsecured, as per information and explanations not applicable.
given to us and register under section 301
produced before us. 7) In our opinion the internal audit functions
carried out during the year by a firm of Chartered
b. Since no loans were granted to parties covered in Accountants appointed by the management have
register under section 301, paras 4(iii) (b), (iii) (c) been commensurate with the size of the Company
and (iii) (d) of the Order are not applicable to the and nature of its business.
Company.
8) We have broadly reviewed the books of account
c. During the year the Company has not taken any loan relating to materials, labour and other items of
secured or unsecured from companies, firms and cost maintained by the Company for manufacture
other parties covered in the register maintained of Automotive Glass pursuant to the Rules made
under section 301 of the Companies Act, 1956 as by the Central Government for maintenance of
52
cost records under clause (d) of sub section (1) of
Name of Nature Amount Forum where
section 209 of the Companies Act, 1956 and are
the Statute of dues (Rs. the dispute
of the opinion that prima facie the prescribed
Millions) is pending
accounts and records have been made and
maintained. However, we are not required to and The Central Excise 34.96 Joint/Assistant/
have not carried out any detailed examination of Excise Act Duty Commissioner
such accounts and records. Central Excise
9) a. According to the information and explanations The Custom Custom 179.30 Deputy
given to us and the records of the Company Act, 1962 Duty Commissioner
examined by us, the Company has been Of Customs
regular in depositing undisputed statutory
dues, including Provident Fund, Investor Income Tax Income 5.24 Commissioner
Education and Protection Fund, Employees’ Act Tax of Income Tax
State Insurance, Income Tax, Sales Tax, Wealth (Appeals)
Tax, Custom Duty, Excise Duty, Cess, Service Gram Gram 1.27 Civil Judge
Tax and other material statutory dues with the
Panchayat Panchayat
appropriate authorities during the year .
Act Tax
According to the information and explanations
given to us, no undisputed amounts payable in
respect of Income Tax, Sales Tax, Wealth Tax, 10) The Company has no accumulated losses as at the
Service Tax and Custom Duty were in arrears, as end of the financial year. The Company has not
at 31st March, 2006 for a period of more than incurred cash losses during the current and the
six months from the date they became payable immediately preceding financial year.
except excise duty of Rs. 3.13 Millions deposited
on 06.05.2006. 11) According to the records of the Company examined
by us and on the basis of information and
Further, since the Central Government has till explanations given to us, the Company has not
date not prescribed the amount of cess payable defaulted in repayment of dues to banks. The
under section 441 A of the Companies Act, Company has not obtained any borrowings by way
1956, we are not in a position to comment upon of debentures or from any financial institutions as
the regularity or otherwise of the Company in defined in para 22 of the Order.
depositing the same.
12) Based on our examination of documents and
b. According to the books of account and records
records of the Company and as per information and
as produced and examined by us in accordance
explanations given to us, we are of the opinion that
with the generally accepted auditing practices
the Company has not granted loans and advances
in India there are no dues of Sales Tax, Wealth
Tax, Service Tax and Cess which have not been on the basis of security by way of pledge of shares,
deposited on account of any dispute. The debentures and other securities.
particulars of dues of Excise Duty, Income Tax,
Custom Duty and Gram Panchayat Tax as at 31st 13) In our opinion the Company is not a chit fund or
March, 2006 which have not been deposited on nidhi/mutual benefit fund/society and hence
account of a dispute are as follows: clause (xiii) of the Order is not applicable to the
Company.
Name of Nature Amount Forum where
the Statute of dues (Rs. the dispute 14) In our opinion, the Company is not dealing in or
Millions) is pending trading in shares, securities, debentures and
The Central Excise 3.11 Supreme Court other investments and hence clause (xiv) of the
Excise Act Duty of India/Custom Order is not applicable to the Company.
& Central Excise
Settlement 15) According to the information and explanations
Commission given to us, the terms and conditions on which
The Central Excise 259.56 Appellate the Company has given guarantees for loans taken
Excise Act Duty Authority upto by others from banks are not prejudicial to the
Tribunal Level interest of the Company.
53
16) In our opinion and according to the information 20) Based on our examination of books and records
and explanations given to us, term loans have of the Company, no public issue was made by the
been applied for the purpose for which they were Company during the year.
raised.
21) During the course of our examination of the books
17) According to the information and explanations of account carried out in accordance with the
given to us and on an overall examination of the generally accepted auditing practices in India, we
Balance Sheet of the Company, we report that no have not come across any instance of fraud on or
funds raised on short term basis have been used by the Company nor have we been informed by the
for long term investment. management of any such instance being noticed
or reported during the year.
18) According to the information and explanations
given to us no preferential allotment of shares
has been made by the Company to parties and
For Jagdish Sapra & Co.
companies covered in the register maintained
Chartered Accountants
under section 301 of the Companies Act, 1956.
19) According to the information and explanations Jagdish Sapra
given to us no debentures have been issued by Place : New Delhi Partner
the Company during the year. Dated : 16th May, 2006 M. No. 9194
54
Balance Sheet
Rs. Millions
Schedule As At 31st March, 2006 As At 31st March, 2005
SOURCES OF FUNDS
1. Shareholders’ Funds
a) Share Capital 1 219.93 139.96
b) Reserves and Surplus 2 2,348.94 2,568.87 1,675.69 1,815.65
2. Loan Funds
a) Secured Loans 3 5,845.68 1,762.38
b) Unsecured Loans 4 2,821.67 8,667.35 2,688.26 4,450.64
3. Deferred Tax Liability (Refer Note 12, Schedule 14) 39.20 –
Total 11,275.42 6,266.29
APPLICATION OF FUNDS
1. Fixed Assets 5
a) Gross Block 9,189.61 7,871.37
b) Less : Depreciation and Amortisation 4,326.38 4,310.57
c) Net Block 4,863.23 3,560.80
d) Capital Work-in-progress (Refer Note 14, Schedule 14) 4,854.84 9,718.07 1,244.44 4,805.24
2. Investments 6 63.81 57.76
3. Current Assets, Loans and Advances
Current Assets 7
a) Inventories 1,497.12 1,168.35
b) Sundry Debtors 315.26 744.94
c) Cash and Bank Balances etc. 80.90 94.60
d) Other Current Assets 101.53 75.64
Loans and Advances 8 832.71 411.03
2,827.52 2,494.56
Less: Current Liabilities and Provisions 9
a) Liabilities 1,203.22 926.03
b) Provisions 131.96 167.63
1,335.18 1,093.66
Net Current Assets 1,492.34 1,400.90
4. Miscellaneous Expenditure
(to the extent not written off or adjusted) 1.20 2.39
(Refer Note 19, Schedule 14)
Total 11,275.42 6,266.29
Significant Accounting Policies and Notes on Accounts 14
The Schedules referred to above form an integral part of the Balance Sheet
Per our report of even date On behalf of the Board of Directors
For Jagdish Sapra & Co.
Chartered Accountants
Jagdish Sapra B. M. Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Partner Chairman Managing Director & Chief Financial Head - Legal &
M. No. 9194 Chief Executive Officer Officer Company Secretary
Place : New Delhi Place : Gurgaon
Dated : 16th May, 2006 Dated : 16th May, 2006
55
Profit and Loss Account
Rs. Millions
Schedule Year Ended Year Ended
31st March, 2006 31st March, 2005
INCOME
Turnover and Inter Division Transfers 7,031.57 6,915.27
Less : Inter Division Transfers 203.23 154.64
Turnover 6,828.34 6,760.63
Less : Excise Duty 951.60 894.59
Net Turnover 5,876.74 5,866.04
Other Income 10 36.49 74.08
5,913.23 5,940.12
EXPENDITURE
Materials and Manufacturing 11 3,345.88 3,224.49
Personnel 12 431.75 382.70
Selling, Administration and Others 13 1,037.06 1,075.91
Deferred Revenue Expenditure Written Off 1.20 1.20
Total 4,815.89 4,684.30
Profit Before Depreciation, Tax and Extra Ordinary Items 1,097.34 1,255.82
Less : Depreciation and Amortisation 463.84 403.19
Less : Depreciation Written Back (Refer Note 8, Schedule 14) 400.77 63.07 – 403.19
Add : Impairment Loss Reversed 3.80 –
Less : Prior Period Adjustments 1.29 2.80
Profit Before Tax and Extra Ordinary Items 1,036.78 849.83
Less : Extra Ordinary Items (Refer Note 11, Schedule 14) 124.44 –
Profit Before Tax 912.34 849.83
Less : Provision for Taxation
Current Tax 74.80 67.00
Deferred Tax 39.20 –
Fringe Benefit Tax 8.30 –
Add : MAT Credit Entitlement 72.61 –
Profit After Tax 862.65 782.83
Less : Income/Wealth Tax Paid for Earlier Years – 0.82
Add : Balance Brought Forward 30.27 75.32
Profit Available for Appropriation 892.92 857.33
Appropriations
Interim Dividend on Equity Shares – 79.96
Dividend on Preference Shares – 3.83
Proposed Dividend
Equity Shares 95.96 119.95
Preference Shares 0.01 0.01
Corporate Dividend Tax 13.46 27.78
General Reserve 89.96 595.53
Balance Carried to Balance Sheet 693.53 30.27
892.92 857.33
Earnings Per Share-Basic and Diluted (Rs.)
Before extra ordinary items (Refer Note 18, Schedule 14) 6.17 4.86
After extra ordinary items (Refer Note 18, Schedule 14) 5.39 4.86
Significant Accounting Policies and Notes on Accounts 14
The Schedules referred to above form an integral part of the Profit and Loss Account
Per our report of even date On behalf of the Board of Directors
For Jagdish Sapra & Co.
Chartered Accountants
Jagdish Sapra B. M. Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Partner Chairman Managing Director & Chief Financial Head - Legal &
M. No. 9194 Chief Executive Officer Officer Company Secretary
Place : New Delhi Place : Gurgaon
Dated : 16th May, 2006 Dated : 16th May, 2006
56
Schedules to the Accounts
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 1 : SHARE CAPITAL
Authorised
50,00,00,000 (15,00,00,000) Equity Shares of 500.00 150.00
Re. 1 each
6,00,000 Preference Shares of Rs. 100 each 60.00 60.00
90,00,000 Preference Shares of Rs. 10 each 90.00 90.00
650.00 300.00
Issued, Subscribed and Paid Up
15,99,27,586 (7,99,63,793) Equity Shares of
Re. 1 each fully paid * 159.93 79.96
6,00,000 (6,00,000) 0.01% Non-Cumulative
Redeemable Preference Shares of
Rs. 100 each fully paid ** 60.00 60.00
219.93 139.96
Notes:
* Of the above 13,54,63,793 (5,55,00,000) Shares are allotted as fully paid bonus shares by capitalisation of General Reserve.
** The above shares are to be redeemed as follows :
Rs. 50 Millions to be redeemed on 23rd November, 2007.
Rs. 10 Millions to be redeemed on 26th March, 2008.
SCHEDULE 2 : RESERVES AND SURPLUS
Amalgamation Reserve
As per last Balance Sheet 63.66 63.66
Capital Reserve
As per last Balance Sheet
Central Investment Subsidy 1.50 1.50
D. G. Set Subsidy 0.65 0.65
Capital profit on reissue of forfeited shares 0.09 2.24 0.09 2.24
Capital Redemption Reserve
As per last Balance Sheet 79.52 79.52
General Reserve
As per last Balance Sheet 1,500.00 1,000.00
Add : Transferred from Profit and Loss Account 89.96 595.53
Less : Accumulated Impairment Losses – 95.53
Less : Capitalised for issue of Bonus Shares 79.97 1,509.99 – 1,500.00
Surplus in Profit and Loss Account 693.53 30.27
2,348.94 1,675.69
57
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 3 : SECURED LOANS
Banks
Working Capital 1,475.82 1,519.18
Foreign Currency Term Loan 892.50 8.47
Rupee Term Loan 350.00 2,718.32 – 1,527.65
Others
Foreign Currency Term Loan 2,900.62 –
Loan from Distt. Industries Centre
Government of Haryana (Interest Free) 226.74 3,127.36 234.73 234.73
5,845.68 1,762.38
Notes:
Working capital loans are secured by way of first charge on the current assets of the Company, both present and future.
Rupee term loan is secured by way of first charge by way of mortgage over land, building , plant and machinery and other fixed
assets of plant at Sriperumpdur, Tamil Nadu.
Foreign currency term loans are secured by way of mortgage over immovable and movable assets of the project at Roorkee,
Uttaranchal.
Loan from Distt. Industries centre is secured by way of first charge by way of mortgage over immovable and movable assets of plant
at Rewari, Haryana.
SCHEDULE 4 : UNSECURED LOANS
Short Term/Bridge Loans From Banks 691.76 600.12
Foreign Currency Loan ( Interest Free) 2,129.91 2,088.14
2,821.67 2,688.26
58
Rs. Millions
SCHEDULE 5 : FIXED ASSETS
Gross Block Depreciation / Amortisation Net Block
As At Additions Deductions As At As At For The Adjustments As At As At As At
Description 1st April, 31st March, 31st March, 31st March,
1st April, 31st March, Year
2005 2006 2005 2006 2006 2005
Tangible Assets
Freehold Land 85.19 125.21 210.40 210.40 85.19
Leasehold Land 146.47 146.47 14.70 1.52 16.22 130.25 131.77
Buildings 1,062.82 243.91 6.72 1,300.01 265.08 35.89 61.26 239.71 1,060.30 797.74
Plant and Machinery 5,405.12 842.11 76.19 6,171.04 3,401.56 348.45 336.25 3,413.76 2,757.28 2,003.56
Electrical Installations
and Fittings 724.09 68.18 5.25 787.02 346.01 40.28 17.52 368.77 418.25 378.08
Furniture and Fixtures 52.78 8.65 0.52 60.91 28.07 5.34 6.57 26.84 34.07 24.71
Miscellaneous Assets 186.26 43.97 0.36 229.87 105.07 16.82 20.86 101.03 128.84 81.19
Vehicles 55.61 15.86 3.21 68.26 24.16 5.55 11.01 18.70 49.56 31.45
7,718.34 1,347.89 92.25 8,973.98 4,184.65 453.85 453.47 4,185.03 4,788.95 3,533.69
Intangible Assets
Computer Software 39.41 61.69 101.10 13.45 15.09 28.54 72.56 25.96
Licence Fee 111.46 111.46 111.46 111.46
E Mark Charges 2.16 0.91 3.07 1.01 0.34 1.35 1.72 1.15
153.03 62.60 215.63 125.92 15.43 141.35 74.28 27.11
Total 7,871.37 1,410.49 92.25 9,189.61 4,310.57 469.28 453.47 4,326.38 4,863.23 3,560.80
Previous year 6,789.80 1,120.52 38.95 7,871.37 3,927.43 406.61 23.47 4,310.57 3,560.80
Capital Work In Progress
4,854.84 1,244.44
(Including Capital Advances )
Notes:
a)
b)
c)
59
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 6 : INVESTMENTS Quoted Unquoted Quoted Unquoted
A. Long Term-Non Trade
In Government Securities
National Saving Certificates * – 0.01 – 0.01
In 5 Shares of Taloja CETP Co-operative Society Limited – ** – **
In Units of Mutual Fund
Morgan Stanley Growth Fund
1,50,000 units of Rs. 10 each 1.50 – 1.50 –
In Equity Shares Fully Paid Up
Samtel Color Limited
41,600 equity shares of Rs. 10 each 3.68 – 3.68 –
Jai Parabolic Limited
2,00,000 equity shares of Rs. 10 each 4.42 – 4.42 –
Trade
AIS Adhesives Limited (AIS Welkin Auto Glass Services Limited)
3,49,965 equity shares of Rs. 10 each – 3.50 – 3.50
Asahi India Map Auto Glass Limited
1,00,000 equity shares of Rs. 10 each – 19.15 – 19.15
Vincotte International India Assessment Services Pvt. Ltd.
33,000 equity shares of Rs. 100 each (Purchased during the year) – 3.30 – –
Subsidiary Company
AIS Glass Solutions Limited
29,60,000 (25,49,940) equity shares of Rs. 10 each – 29.60 – 25.50
(4,10,060 equity shares of Rs. 10 each purchased during the year)
B. CURRENT INVESTMENTS
In Units of Mutual Funds
Non Trade - Quoted
Purchased and Sold during the year
120340.10 Nos. of Tempelton India Treasury Management
Account Regular Plan Growth
Purchased for Rs. 205 Millions
908248.39 Nos. of ICICI Liquid Plan
Purchased for Rs. 15 Millions
4996951.85 Nos. of ICICI Institutional Liquid Plan Super
Institutional Growth Purchased for Rs. 50 Millions
9.60 55.56 9.60 48.16
Total 65.16 57.76
Less: Diminution in value 1.35 –
63.81 57.76
Aggregate value of quoted investments-Market value Rs. 15.97 Millions (Previous year Rs. 12.20 Millions).
* Pledged with Sales Tax Authorities.
** Rounded off to Nil.
60
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 7 : CURRENT ASSETS
Inventories* (As taken, valued and certified by Management)
i. Stores, Spare parts etc. 255.48 274.91
ii. Raw Materials 622.48 380.98
iii. Finished and Traded Goods 555.60 432.06
iv. Waste 3.48 7.05
v. Work in Process 60.08 73.35
1,497.12 1,168.35
Sundry Debtors (Considered good except where provided for)
Secured
Over Six Months 1.29 0.70
Others – 1.29 54.74
Unsecured
Over Six Months 64.88 42.51
Others 278.18 343.06 676.47
344.35 774.42
Considered Good 315.26 744.94
Considered Doubtful 29.09 29.48
Less : Provision for Doubtful debts 29.09 29.48
315.26 744.94
Cash and Bank Balances etc.
Cash in Hand (As certified) 1.64 0.64
Cheques in Hand/Remittances in Transit – 0.05
Balance with Post Office in Saving Account 0.01 0.01
Balances with Scheduled Banks
In Current/Cash Credit Accounts 65.39 80.68
In Deposit Account 0.05 0.05
In Dividend Warrant Account 13.81 13.17
80.90 94.60
Other Current Assets (Unsecured considered good)
Interest Accrued on Investments ** **
Impaired Assets for disposal 13.02 9.23
Deposits with Government and others 88.51 66.41
101.53 75.64
* Include in Transit Rs. 195.29 Millions (Previous year Rs. 110.31 Millions).
** Rounded off to Nil.
61
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 8 : LOANS AND ADVANCES
(Unsecured considered good)
Loans (Including interest accrued) 14.11 18.84
Advances
Advances recoverable in cash or in kind
or for value to be received and/or adjusted * 392.29 212.79
MAT Credit Recoverable 72.61 –
Balance with Excise Authorities 353.70 179.40
832.71 411.03
* Include Rs. 0.22 Millions (Previous year Rs. 3.32 Millions) to AIS Glass Solutions Ltd.-a Subsidiary Company.
Maximum balance at any time during the year Rs. 8.32 Millions (Previous year Rs. 22.35 Millions).
SCHEDULE 9 : CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Acceptances 5.57 6.20
Sundry creditors
Dues to Small Scale Industrial Undertakings 2.25 4.22
Others * 891.83 754.14
Advances from Customers 41.18 32.58
Unclaimed Dividend ** 13.81 13.17
Other Liabilities 206.18 112.05
Interest Accrued but not due on loans 42.40 3.67
1,203.22 926.03
Provisions
Current Tax (Net of taxes paid) 5.63 8.41
Proposed Dividend on Preference Shares 0.01 0.01
Proposed Dividend on Equity Shares 95.96 119.95
Dividend Tax 13.46 16.82
Fringe Benefit Tax 0.06 –
Provisions towards Gratuity, Superannuation and Leave Encashment * 16.84 22.44
131.96 167.63
* Include Rs. 0.41 Millions due to Managing and other Directors (Previous year Rs. 29.51 Millions).
** There is no amount due and outstanding to be credited to Investor Education and Protection Fund.
62
Rs. Millions
Year Ended 31st March, 2006 Year Ended 31st March, 2005
SCHEDULE 10 : OTHER INCOME
Interest [Tax deducted at source Rs. 0.52 Millions
(Previous year Rs. 0.85 Millions)] 2.98 4.95
Rent Received 0.21 0.18
Profit on Sale of Fixed Assets (Net) 1.12 –
Profit on Sale of Long Term Investments – 0.02
Profit on Sale of Current Investments 0.67 0.29
Diminution in Value of Investments Reversed – 4.80
Exchange Rate Fluctuations (Net) – 38.53
Liabilities and Provisions Written Back 21.54 4.88
Dividend on Long Term Investments Non Trade (Gross) 0.41 0.41
Miscellaneous 9.56 20.02
36.49 74.08
SCHEDULE 11 : MATERIALS AND MANUFACTURING
Raw Materials Consumed
Opening Stock 380.98 323.88
Add : Purchases 2,099.22 1,763.89
2,480.20 2,087.77
Less : Sales/Trial Run 11.38 8.09
Closing Stock 622.48 1,846.34 380.98 1,698.70
Excise Duty on Increase/(Decrease) in Finished Goods Stock 26.61 (20.74)
Purchases of Finished Goods 95.27 39.66
Manufacturing Expenses
Power, Fuel, Water and Utilities 848.43 869.43
Stores and Spares etc. Consumed 352.53 320.81
Miscellaneous Expenses 85.32 75.73
Repairs And Maintenance
Plant and Machinery 178.24 139.00
Building 19.84 198.08 18.38 157.38
Add/(Less) : Decrease/(Increase) in Stocks
Opening Stock
Finished and Traded Goods 432.06 563.76
Work in Process 73.35 31.29
Waste 7.05 0.93
512.46 595.98
Closing Stock
Finished and Traded Goods 555.60 432.06
Work in Process 60.08 73.35
Waste 3.48 7.05
619.16 (106.70) 512.46 83.52
3,345.88 3,224.49
63
Rs. Millions
Year Ended 31st March, 2006 Year Ended 31st March, 2005
SCHEDULE 12 : PERSONNEL
Salaries, Wages, Allowances and Bonus 321.06 291.47
Recruitment and Training Expenses 8.32 4.38
Welfare Expenses 75.64 59.67
Contribution to Provident and Other Funds 26.73 27.18
431.75 382.70
SCHEDULE 13 : SELLING, ADMINISTRATION AND OTHERS
Advertisement 68.56 74.44
Packing and Forwarding 430.73 565.64
Commission Paid 34.29 39.07
Royalty 51.41 61.92
Cash Discount 42.91 44.68
Interest
On Fixed Loans 90.90 23.00
Others 17.36 108.26 8.56 31.56
Bank Charges 10.08 9.14
Travelling and Conveyance 46.80 45.37
Rent 25.39 20.60
Rates and Taxes 14.06 9.05
Insurance 20.47 16.45
Auditors Remuneration 1.89 1.57
Repairs and Maintenance Others 13.88 13.01
Miscellaneous Expenses 143.04 140.63
Loss on Sale of Fixed Assets (Net) – 1.48
Exchange Rate Fluctuations 18.87 –
Director’s Sitting Fee 0.76 0.76
Bad Debts and Miscellaneous Balances Written Off (Net) 5.66 0.54
1,037.06 1,075.91
SCHEDULE 14 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
1) Significant Accounting Policies
a. Basis of preparation of Financial Statements
i. The accounts have been prepared to comply in all material aspects with applicable accounting principles in India,
the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant provisions of the
Companies Act, 1956.
ii. Financial Statements are based on historical cost and are prepared on accrual basis.
b. Fixed Assets
i. Fixed assets are stated at cost (net of CENVAT wherever applicable) less accumulated depreciation and impairment
loss. Cost is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their
64
working conditions for intended use but excludes recoveries. Intangibles are stated at cost less accumulated amount
of amortisation.
ii. Capital work in progress includes expenditure during construction period incurred on projects under implementation
treated as Pre-operative expenses pending allocation to the assets. These expenses are apportioned to fixed assets
on commencement of commercial production.
c. Depreciation/Amortisation
Tangible Assets
i. Depreciation on fixed Assets is provided on Straight Line Method (SLM) at the rates and in the manner provided in
Schedule XIV of the Companies Act, 1956. From the current year, depreciation method in Auto SBU has been changed
from written down value method (WDV) to SLM.
ii. Leasehold land is depreciated over the period of lease.
iii. Assets costing less than Rs. 5000/- each are depreciated fully in the year of purchase.
Intangible Assets
The depreciable amount of intangible asset is allocated over its useful life. Computer Software and E-mark charges are
amortised over a period of five years proportionately when such assets are available for use.
d. Inventories
Inventories are valued at lower of cost or net realisable value except waste which is valued at estimated realisable value as
certified by the Management. The basis of determining cost for various categories of inventories are as follows :
Stores, spare parts and raw material Weighted average cost (except stores segregated for specific
purposes and in transit valued at their specific costs).
Work in process and finished goods Material cost plus proper share of production overheads and
excise duty wherever applicable.
e. Revenue Recognition
Domestic and export sales are recognised on despatch of goods from the factory and port respectively. Sales are recorded
net of rebate, trade discounts, sales tax, returns and transit insurance claims short received but include outwards freight
as per sale invoices.
f. Retirement Benefits
The Company’s contribution to Provident Fund and Family Pension Fund is charged to the Profit and Loss Account.
The Company had schemes of Superannuation Fund and Gratuity Fund towards retirement benefits but the scheme
of Superannuation Fund for retirement benefit has been discontinued for the year. The Gratuity Fund benefits are
administrated by a Trust and through the Group schemes of the Life Insurance Corporation of India/HDFC Standard Life
Insurance. The liability for gratuity at the end of each financial year is determined on the basis of actuarial valuation carried
out by the Insurer’s actuary as confirmed to the Company. Company’s contributions are charged to Profit and Loss Account.
Provision for leave encashment benefit on retirement is made on the basis of actuarial valuation at the year end.
g. Government Grants
Central Investment Subsidy is treated as Capital Reserve. Export incentives are credited to Profit and Loss Account.
h. Foreign Exchange Transactions
Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions.
Current assets, current liabilities and loans denominated in foreign currencies and outstanding at year end are
translated at the rates prevailing on the date of the Balance Sheet and resultant exchange loss/gain and also the
realised exchange loss/gain are dealt in Profit and Loss Account. However, the exchange loss/gain on liabilities
incurred and foreign currency loans utilised for acquisition of fixed assets is adjusted to the carrying cost of fixed assets.
Where forward contracts are entered into, the difference between the forward rate and exchange
rate on the date of transaction is recognised as income/expense over the life of the contract. Profit/
Loss on cancellation or renewal of forward contracts is recognised as income/expense for the period.
i. Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part
of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready
65
for its intended use. All other borrowing costs are charged to revenue.
j. Miscellaneous Expenditure
Expenses incurred on amalgamation before 1st April, 2003 including filing fees paid for increase in authorised capital are
considered as deferred revenue expenditure and written off over a period of five years.
k. Investments
Investments are classified into current and long term investments. Long term investments are stated at cost. However,
diminution in value, other than temporary, is provided. The reduction in carrying amount is reversed when there is a rise
in the value of investments or if the reasons for the reduction no longer exist. Current investments are stated at lower of
cost or fair value.
l. Taxation
Provision for current tax is computed as per estimated ‘Total Income’ returnable under the Income Tax Act, 1961 taking into
account available deductions, exemptions and carried forward losses.
Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between
taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent
periods.
Deferred tax asset is not recognised on unabsorbed depreciation and carry forward of losses unless there is virtual certainty
and convincing evidence that there will be sufficient future taxable income available to realise such asset.
m. Provisions and Contingent Liabilities
A provision is recognised when the Company has a present obligation as a result of a past event and it is probable that an
outflow of resources would be required to settle the obligation, and in respect of which a reliable estimate can be made.
Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation.
A contingent liability is disclosed after a careful evaluation of the facts and legal aspects of the matter involved where the
possibility of an outflow of resources embodying the economic benefits is remote.
n. Prior Period Items
Income and Expenses which arise in the current year as a result of errors or omissions in the preparation of financial
statements of one or more prior periods are shown as Prior Period Adjustments.
o. Impairment of Assets
The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment of assets. If any
such indication exists, impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable
amount is provided in the books of accounts. In case there is any indication that an impairment loss recognised for an
asset in prior accounting periods no longer exists or may have decreased, the recoverable value is reassessed and the
reversal of impairment loss is recognised as income in the Profit and Loss Account.
Notes on Accounts
2) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 1,418.13 Millions
(Rs. 2,309.95 Millions) (net of advances).
3) Contingent Liabilities for : Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
a. Bank guarantees and letters of credit outstanding 779.31 2,033.44
b. Claims against the Company not acknowledged as debts
i. Disputed excise and custom duty
(including referred in Note No. 10) 511.13 513.88
ii. Disputed income tax demands 5.25 3.15
iii. Others 10.33 1.27
66
4) Payment to Auditors :
Rs. Millions
2005-2006 2004-2005
a. Statutory Audit 1.88 1.40
b. Limited review of unaudited results 0.18 0.15
c. Certification charges * 0.04
d. Out of pocket expenses 0.26 0.07
e. Service Tax - 0.01
5) Some of the Loans given, Current Liabilities, Sundry Debtors and Advances are subject to confirmation/reconciliation.
6) Profit/Loss on sale of raw materials and claims against suppliers short received stand adjusted in respective consumption
accounts.
7) Prior period adjustments consist of : Rs. Millions
2005-2006 2004-2005
a. Depreciation short /(excess) provided * 2.34
b. Rates & Taxes 0.60 0.16
c. Other expenses of earlier years 0.90 3.70
d. Income of earlier years (0.21) (3.40)
1.29 2.80
8) During the year the Company has changed the method of providing Depreciation from written down value method (WDV) to
straight line method (SLM) for Fixed Assets of Auto SBU. In accordance with the Accounting Standard (AS)-6 “Depreciation
Accounting” issued by the Institute of Chartered Accountants of India, depreciation has been recalculated as per the new
method from the date of the asset coming into use. Consequent to the above change:-
i. there is a reduced charge of depreciation of Rs. 400.77 Millions relating to earlier years which has been written back.
ii. the depreciation charge for the year is lower by Rs. 147.64 Millions.
iii. the profit before tax for the year and the net block of Fixed Assets at the year end is higher by Rs. 548.41 Millions.
9) Purchases of raw materials during the year are net of quality claims against the suppliers including claims of Rs. 67.16
Millions (Rs. 41.11 Millions) yet to be settled. Adjustment for difference, if any, will be made in accounts on finalisation of
the claims.
10) a. In a previous year, in Auto SBU of the Company, Custom and Central Excise Settlement Commission settled Excise Duty
Liability at Rs. 36.79 Millions (Rs. 36.79 Millions) (excluding interest) out of which the Company had accepted liability of
Rs. 5.64 Millions (Rs. 5.64 Millions) and paid the same along with interest of Rs. 2.01 Millions (Rs. 2.01 Millions). Against
the balance liability Civil Writ Petition was accepted by High Court of Delhi against the payment of Rs. 10 Millions (Rs. 10
Millions) (included in Advances - Schedule 8) and on furnishing bank guarantee for the balance amount. In the previous
year the High Court remanded back the matter to the Customs and Central Excise Settlement Commission against which
the Excise Authorities have filed an appeal before the Supreme Court. The final liability, if any, will be accounted on
disposal of the appeal.
b. Deputy Commissioner of Customs (Original Authority) in a previous year issued an order imposing additional custom
duty of about Rs. 179.30 Millions (Rs. 179.30 Millions) on the value of project imports made by erstwhile Floatglass
India Ltd. (amalgamated with the Company with effect from 1st April, 2002). On appeal by the Company, Commissioner
Customs (Appeals) set aside the above order on 25th Nov., 2002 against which the Commissioner of Customs filed an
appeal before the Customs Excise and Service Tax Appellate Tribunal. In the previous year the matter was remanded
back to the Original Authority for fresh decision. The liability, if any, will be accounted on final decision by Original
Authority.
c. Against the show cause notices issued in preceding years to erstwhile Floatglass India Limited Commissioner of Central
Excise Customs & Service Tax confirmed excise duty liability of Rs. 259.50 Millions (Rs. 259.50 Millions) approximately
including penalty (excluding interest) in the previous year. Against the above Orders, the Company has filed appeals
during the year before the Customs, Excise & Service Tax Appellate Tribunal. The Company does not expect any liability
on this account on the basis of legal opinion obtained from an eminent lawyer. The liability, if any, will be accounted on
final disposal of appeals.
* Rounded off to Nil
67
11) In July 2005, due to unrelenting rainfall in Maharashtra, plant at T-7, Taloja of float SBU was shut down from 26th July, 2005
to 28th Oct., 2005 due to water inundation. This caused extensive damage to assets/inventories and expenditure was
incurred on repair, power, fuel & utilities for resumption of operations amounting to Rs. 124.44 Millions shown as Extra
Ordinary Items in Profit and Loss Account.
12) Detail of Deferred Tax Assets/(Liability) arising on account of timing differences are as follows :
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
Deferred Tax Assets / (Liabilities)
Unabsorbed depreciation/carried forward of losses under Tax Laws 584.48 591.74
Difference between book depreciation and depreciation
under the Income Tax Rules (640.74) (409.71)
Expenses allowed for tax purpose on payment basis 6.09 (3.46)
Expenditure claimed as revenue under the Income Tax
Act, 1961, but treated as deferred revenue in the books 0.71 1.11
Provision for doubtful debts and advances 9.80 10.79
Others 0.46 2.12
(39.20) 192.59*
* Not recognised in the Profit and Loss Account as a matter of prudence in the previous year.
13) Interest of Rs. 126.12 Millions (Rs. 17.14 Millions) on borrowings for fixed assets for expansion/new projects is capitalised
till the date such assets are put to use for commercial production.
14) Capital work in progress comprises of the following : Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
Building under construction 1,212.05 61.90
Machinery under erection 2,371.53 401.27
Electric installations under erection 127.45 1.68
Loan processing charges 256.99 -
Capital advances 606.19 701.45
Preoperative expenses 280.63 78.14
Total 4,854.84 1,244.44
15) a. As no commission is due to be paid to Managing and Whole Time Directors computation of net profit in accordance
with Section 349 is not given.
b. Managerial Remuneration under section 198 of the Companies Act, 1956 : Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
Salaries and Allowances 8.27 11.58
Commission on Profits - 28.98
Perquisites (Actual and/or valued as per Income Tax Rules) 3.23 3.90
Contribution to Provident Fund 0.27 0.26
Contribution to Gratuity and Superannuation Fund 0.19 0.36
11.96* 45.08
* Includes Rs. 1.45 Millions (Rs. 13.81 Millions) capitalised to new projects (Capital work in progress).
68
16) Loans and Advances (Schedule 8) include amounts due from : Rs. Millions
Maximum Balance As At 31st March, 2006
a. An officer of the Company 0.18 (0.29) 0.06 (0.18)
b. Private Limited Company in which the Managing
Director of the Company is interested as Director 1.80 (1.85) 1.80 (1.80)
17) List of Small Scale Industries to whom the Company owes any sum which is outstanding for more than 30 days as at 31st
March,2006.
A. P. Industries, Electro Controls, Kewalson, NPI Packagings (P) Ltd., S. S. Engineering Works, Yadav Plastics, Inteltek
Automation Pvt. Ltd., Micro Heating Industries, Polyrub Extrusions India, Uday Computer Aided Manufacturing (P) Ltd.,
Wonder Polymers (Pvt.) Ltd.
The above information and the amount given in Current Liabilities (Schedule 9) regarding Small Scale Industrial Undertakings
has been determined to the extent such parties have been identified on the basis of information available with the Company.
18) Earnings Per Share (EPS) : Rs. Millions
2005-2006 2004-2005
a. Profit after tax and before extra ordinary items 987.09 782.83
Less : Income/Wealth Tax Paid for Earlier Years - 0 .82
Less : Preference Dividend Including Tax thereon 0.01 4.34
Profit Attributable to Equity shareholders - (A) 987.08 777.67
Basic/Weighted average number of Equity Shares
outstanding – (B) 15,99,27,586 15,99,27,586
Nominal Value of Equity Shares (Re.) 1/-each 1/-each
Basic/Diluted Earnings Per Share (Rs.) – (A)/(B) 6.17 4.86
b. Profit after tax and after extra ordinary items,
attributable to Equity shareholders 862.65 777.67
Basic/Diluted Earnings per share (Rs.) 5.39 4.86
19) Details of Miscellaneous Expenditure are as follows : Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
Deferred Revenue Expenditure
As per Last Balance Sheet 2.39 3.59
Written off during the year 1.20 1.20
1.20 2.39
20) Related Party Disclosures under Accounting Standard (AS) - 18 :
a. List of Related Parties
i. Subsidiary : AIS Glass Solutions Ltd.
ii. Associates : AIS Adhesives Ltd., Asahi India Map Auto Glass Ltd., Vincotte International India Assessment
Services (P) Ltd.
iii. Enterprises owned or significantly influenced by key management personnel or their relatives:
Shield Autoglass Ltd., Samir Paging Systems Ltd., R. S.Estates (P) Ltd., Nishi Electronics (P) Ltd., Maltex Malsters
Ltd., Essel Marketing (P) Ltd., Allied Fincap Services Ltd., Usha Memorial Trust, ACMA, Krishna Maruti Ltd.
69
iv. Key Management Personnel and their relatives-
Directors - Mr. B. M. Labroo, Mr. Sanjay Labroo, Mr. P. L. Safaya, Mr. K. Kojima, Mr. Arvind Singh
Relatives - Mrs. Kanta Labroo, Mrs. Rajni Safaya, Mrs. Vimi Singh
v. Other related parties where control exists : Asahi Glass Co. Limited, Japan and its subsidiaries - AGC Flat Glass Asia Pacific
Pte . Ltd., Asahi Glass Machinery Co. Ltd., Asahi Glass Phillipines, Inc., Glavermas Pte Ltd.,. Glavermas Mirrors Pte Ltd.,
Glaverbel S.A., Asahi Glass Ceramics Co. Ltd., P. T. Asahimas Flat Glass TBK Indonesia, AGC Automotive Thailand Co. Ltd.
b. Transactions with Related Parties : Rs. Millions
Nature of Transaction Subsidiary Associate Enterprise owned or significantly Key Management Others
influenced by Key Management Personnel
Personnel and their relatives
Volume of transactions Volume of transactions Volume of transactions Volume of transactions Volume of transactions
for the year ended for the year ended for the year ended for the year ended for the year ended
31-03-06
31-0 31-03-05 31-03-06 31-03-05 31-03-06 31-03-05 31-03-06 31-03-05 31-03-06 31-03-05
1. Expenses
Purchase of materials 318.01 463.80
Purchase of traded goods 63.80 22.96
Business promotion
expenses 2.88 2.94 0.02
Remuneration to directors As per Note No.15 above
Directors sitting fee 0.12 0.14
Rent paid 1.80 1.80 1.14 0.72
Fee for technical and
consultancy services. 169.36 3.10
Donation 0.05
Training expenses * 0.02
Repairs and Maintenance * 0.02 3.26 1.74
Miscellaneous Expenses 0.06 3.40
Royalty 51.32 61.86
Dividend 26.65 57.73
Membership and
Subscription 0.10 0.10
Commission 3.83
Interest on ICD 0.23
2. Income
Sale of goods 70.65 101.32 143.91 31.32
Sale of fixed assets 5.86
Interest/ Commission
received 0.64 0.93
3. Purchases of Capital
Goods 1,333.90 131.42
4. Inter Corporate Deposit
Given 10.00
5. Uusecured Loan Accepted
and Repaid 120.00
6. Guarantee Given 20.00
7. Investment in Equity
4.10 28.82 3.30 1.00
Shares
8. Advances Given 0.50
9. Balance as on 31-03-06 31-03-05 31-03-06 31-03-05 31-03-06 31-03-05 31-03-06 31-03-05 31-03-06 31-03-05
Loans and advances 0.22 3.32 0.52 1.80 1.80 1.00 143.65 390.04
Creditors 0.03 27.54 62.28
Debtors 19.99 23.65 17.63 0.14 0.09
Foreign Currency Loan 2,129.91 2,088.14
Note : 1. Related party relationship is as identified by the company on the basis of available information and accepted by the Auditors as correct.
2. No amount has been written off or written back during the year in respect of debts due from or to related parties.
*Rounded off to Nil
70
21) Segment Information :
a. Information about Primary Business Segments
a) Rs. Millions
Particulars Automotive Glass Float Glass Unallocable Eliminations Total
Segment revenue
External 3,686.91 2,123.48 97.66 5,908.05
(3,273.21) (2,677.17) (Nil) (5,950.38)
Inter segment sales (Net of excise duty) 18.97 155.53 0.71 (175.21)
(16.97) (115.13) (Nil) (-132.10)
Other income 5.18 5.18
(10.47) (10.47)
Total revenue 3,705.88 2,279.01 103.55 (175.21) 5,913.23
(3,290.18) (2,792.30) (10.47) (-132.10) (5,960.85)
Segment result 1,011.22 81.71 (77.52) 1,015.41
(539.17) (334.54) (Nil) (873.71)
Unallocated Income (net of expenses) 2.21 2.21
(5.52) (5.52)
Operating profit 1,011.22 81.71 (75.31) 1,017.62
(539.17) (334.54) (5.52) (879.23)
Interest expense 108.26 108.26
(31.56) (31.56)
Interest income 2.98 2.98
(4.95) (4.95)
Income taxes - Current 74.80 74.80
(67.00) (67.00)
- Deferred 39.20 39.20
(Nil) (Nil)
- Fringe Benefit Tax 8.30 8.30
(Nil) (Nil)
- MAT Credit (72.61) (72.61)
(Nil) (Nil)
Taxes paid for earlier years - -
(3.61) (3.61)
Net profit 1,011.22 81.71 (230.28) 862.65
(539.17) (334.54) (-91.70) (782.01)
Other information
Segment assets 4,558.16 7,090.46 961.97 12,610.59
(3,381.33) (3,886.45) (92.16) (7,359.94)
Total assets 4,558.16 7,090.46 961.97 12,610.59
(3,381.33) (3,886.45) (92.16) (7,359.94)
Segment liabilities 504.51 563.94 266.73 1,335.18
(542.77) (389.94) (160.94) (1,093.65)
Share capital and reserves 2,568.87 2,568.87
(1,815.65) (1,815.65)
Secured and unsecured loans 8,667.35 8,667.35
(4,450.64) (4,450.64)
Deferred Tax Liability 39.20 39.20
(Nil) (Nil)
Total liabilities 504.51 563.94 11,542.15 12,610.60
(542.77) (389.94) (6,427.23) (7,359.94)
Capital expenditure 972.27 3,646.40 402.23 5,020.90
(1,148.42) (868.77) (167.77) (2,184.96)
Depreciation / Amortisation 248.84 192.85 22.15 463.84
(196.02) (207.17) (Nil) (403.19)
Depreciation / Amortisation ( Written Back) 400.77 - - 400.77
(Nil) (Nil) (Nil) (Nil)
Non cash expenses other than depreciation/amortisation 1.20 - - 1.20
(1.20) (Nil) (Nil) (1.20)
71
b.
b) Information about Secondary Business Segments Rs. Millions
Particulars India Outside India Total
Revenue by Geographical Market
External 6,001.98 86.46 6,088.44
(5,816.04) (276.91) (6,092.95)
Less: Inter segment sales (Net of excise duty) 175.21 175.21
(132.10) (132.10)
Total 5,826.77 86.46 5,913.23
(5,683.94) (276.91) (5,960.85)
Segment Accounting Policies -
In addition to the significant accounting policies as per Note 1, Schedule 14, the accounting policies in relation to segment
accounting are as under
i. Identification of segments :
For management purposes, the Company is organised into two major operating divisions - Automotive Glass and Float Glass.
These divisions are the basis on which the Company reports its primary segment information.
ii. Segment assets and liabilities :
All segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used
by the segment and consist primarily of fixed assets, inventories, sundry debtors, loans and advances and operating cash and
bank balances. Segment liabilities include all operating liabilities and consist primarily of creditors and accrued liabilities.
Segment assets and liabilities do not include investments, inter corporate deposits, miscellaneous expenditure, current
income tax and deferred tax.
iii. Inter segment transfers :
Segment revenues and segment results include transfers between business segments. Inter segment sales to
Automotive Glass Division are accounted for at cost of production plus 10%. These transfers are eliminated on consolidation.
iv. Segment revenue and expenses :
Joint expenses are allocated to business segments on a reasonable basis. All other revenues and expenses are directly
attributable to the segments. They do not include interest income on inter corporate deposit and interest expenses.
22) The information as required by para 3 and 4 of Part II of Schedule VI of the Companies Act, 1956 :
a. Particulars of Installed Capacity (as certified by the management on which auditors have placed reliance) and Production:
Installed Actual
Product Unit Capacity Production
Toughened Glass Sq.Mts. 32,00,000 29,37,861
(32,00,000) (26,96,821)
Laminated Glass Nos. 18,60,000 15,79,721
(18,60,000) (13,97,126)
Float Glass Conv.Sq.Mts. 2,92,00,000 2,44,22,779 (after breakages)
(2,92,00,000) (3,06,78,905)
Architectural Glass Sq.Mts. 9,00,000 1,10,537
(Nil) (Nil)
Note : 1. As per the Industrial Policy no licences are required for the products manufactured by the Company.
2. Installed capacities are on annual basis.
3. Production includes captive consumption.
72
b.
* Excluding 21,936(6,224) Sq. Mtr. , **5,188(1,162) Nos..& *** 9,208 (Nil) Conv. Sq. Mtr. destroyed/broken.
**** Net of inter-unit transfer 23,38,317 (19,48,455) Conv. Sq. Mtr.
c. Raw Materials Consumed : Rs. Millions
Unit Quantity Value
Float Glass (Sq.Mts.) 66,71,982 1,023.00
(58,60,424) (836.34)
PVB Films (Sq.Mts.) 1,655,172 351.67
(14,13,995) (325.41)
Soda Ash M.T. 22,151 212.53
(29,313) (246.76)
Others 259.14
(290.19)
d. Value of raw materials, Spare parts and components consumed : Rs. Millions
Amount Amount Percentage
i. Raw Materials
Imported 1,143.42 (1,091.47) 61.93 (64.25)
Indigenous 702.92 (607.23) 38.07 (35.75)
ii. Stores and spare parts
Imported 96.12 (92.37) 27.27 (28.79)
Indigenous 256.41 (228.44) 72.73 (71.21)
e. CIF value of Imports : Rs. Millions
Amount Amount
i. Raw Materials 1,328.02 (840.10)
ii. Stores and Spares Parts etc. 147.56 (173.07)
iii. Capital Goods (excluding stores included in (ii) above) 2,045.91 (362.91)
iv. Traded Goods 69.91 (27.07)
v. Others 3.97 (2.93)
73
f. Expenditure in Foreign Currency :
Rs. Millions
Amount Amount
i. Instalments towards foreign currency loans 8.56 (19.83)
ii. Interest on foreign currency loans 51.47 (0.25)
iii. Royalty (Net of Taxes) 41.02 (49.49)
iv. Professional charges 179.40 (19.42)
v. Others 11.60 (13.23)
g. Remittances in Foreign Currencies on account of dividends (net of tax) :
Rs. Millions
Particulars Financial Year On No.of No. of Amount
account of shares held Non-resident
shareholders
Interim dividend on Equity Shares Nil Nil Nil Nil Nil
(2004-2005) (2003-2004) (2,02,14,306) (13) (20.21)
Final dividend on Equity Shares 2005-2006 2004-2005 2,16,27,658 21 32.44
(2004-2005) (2003-2004) (2,02,19,306) (13) (45.49)
Final dividend on Preference Shares 2005-2006 2004-2005 6,00,000 1 0.01
(2004-2005) (2003-2004) (6,00,000) (1) (0.01)
h. Earnings in Foreign Exchange :
Rs. Millions
i. F. O. B. value of Exports (excluding paid samples) 83.05 (230.91)
ii. Interest and Commission Received 0.93 (Nil)
23) Previous year’s figures have been regrouped/rearranged, wherever found necessary.Figures in brackets above are in
respect of previous year.
24) Figures have been rounded off to Rs. Millions upto two decimal points.
Per our report of even date On behalf of the Board of Directors
For Jagdish Sapra & Co.
Chartered Accountants
Jagdish Sapra B. M. Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Partner Chairman Managing Director & Chief Financial Head - Legal &
M. No. 9194 Chief Executive Officer Officer Company Secretary
Place : New Delhi Place : Gurgaon
Dated : 16th May, 2006 Dated : 16th May, 2006
74
Cash Flow Statement
Rs. Millions
2005-2006 2004-2005
Amount Amount Amount Amount
A) CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax and Extra Ordinary items 1,038.07 852.62
Adjustment for:
Depreciation and Amortisation of Intangible Assets 63.07 403.19
Impairment Loss Reversed (3.81) -
(Profit)/Loss on sale of fixed assets and assets
discarded (Net) (1.12) 1.48
(Profit)/Loss on sale of Long Term Investments - (0.02)
(Profit)/Loss on sale of Current Investments (0.67) (0.29)
Deferred revenue expenditure written off 1.20 1.20
Diminution/(Increase) in the value of long term
investments 1.35 (4.80)
Extra Ordinary Items (124.44) -
Interest paid 108.26 31.56
Interest received (2.98) (4.95)
Dividend received (0.41) (0.41)
Operating Profit before working capital changes 1,078.52 1,279.58
Adjustment for:
Trade and other receivables 58.51 (340.85)
Inventories (328.78) (88.44)
Trade payable 268.24 143.99
Cash Generated from Operations 1076.49 994.28
Interest paid (108.26) (31.56)
Direct taxes paid (83.10) (67.82)
Cash Flow before Prior Period Items 885.13 894.90
Prior Period items (1.29) (2.80)
Net Cash from Operating Activities 883.84 892.10
75
Rs. Millions
2005-2006 2004-2005
Amount Amount Amount Amount
B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets including capital
Work in progress (5,015.46) (2,273.55)
Sale of fixed assets 40.69 1.25
Purchase of Investments (7.40) (26.50)
Sale of investments - 0.29
(Profit)/Loss on sale of Current Investments 0.67 0.29
Dividend received on investments 0.41 0.41
Interest received 2.98 4.95
Net Cash used in Investing Activities (4,978.11) (2,292.86)
C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds of long term borrowing 4,176.90 36.80
Payment of long term borrowings (8.47) (65.10)
Net proceeds of short term borrowing 48.28 1,774.68
Redemption in Preference shares - (79.52)
Dividend and dividend tax paid (136.78) (302.37)
Net Cash used in Financing Activities 4,079.93 1,364.49
Net Increase/(Decrease) in Cash and (14.34) (36.27)
Cash Equivalent (A+B+C)
Cash and Cash Equivalent As At 1st April, 2005 81.43 117.70
(Opening Balance)
Cash and Cash Equivalent As At 31st March, 2006 67.09 81.43
(Closing Balance)
Notes :
i. The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting
Standard (AS) - 3 on Cash Flow Statement issued by the Institute of Chartered Accountants of India.
ii. Figures in brackets represent outflows.
iii. Previous year figures have been restated wherever necessary.
Per our report of even date
On behalf of the Board of Directors
For Jagdish Sapra & Co.
Chartered Accountants
Jagdish Sapra B. M. Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Partner Chairman Managing Director & Chief Financial Head - Legal &
M. No. 9194 Chief Executive Officer Officer Company Secretary
Place : New Delhi Place : Gurgaon
Dated : 16th May, 2006 Dated : 16th May, 2006
76
On behalf of the Board of Directors
B. M.Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Chairman Managing Director & Chief Financial Head - Legal &
Place : Gurgaon Chief Executive Officer Officer Company Secretary
Dated : 16th May, 2006
77
Statement Pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Company
Name of Subsidiary Company AIS Glass Solutions Ltd.
1. Financial year ending of the Subsidiary 31st March, 2006
2. Shares of subsidiary held by Asahi India
Glass Ltd. on the above date
a) Number and Face Value 29,60,000 (25,49,940) Equity Shares of Rs. 10
each fully paid up
b) Extent of holding 77.89% (99.99%)
3. Net aggregate amount of profit/(losses)
of the subsidiary for the above financial
year of the subsidiary so far as they
concern members of Asahi India Glass Ltd.
a) dealt with in accounts of Asahi India Rs. 4.40 Millions (Rs. 11.47 Millions)
Glass Ltd. Loss for the year ended 31st
March, 2006
b) not dealt with in the accounts of Asahi Rs. 0.33 Millions (N.A.)
India glass Ltd. loss for the year ended
31st March, 2006
4. Net aggregate amount of the
profit/(losses) for previous financial
years of the subsidiary since it became
subsidiary so far as they concern
members of Asahi India Glass Ltd.
a) dealt with in accounts of Asahi India Rs. 11.47 Millions (N.A.)
Glass Ltd. for the year ended 31st
March, 2006
b) not dealt with in the accounts of Asahi N. A. (N. A.)
India Glass Ltd. for the year ended 31st
March, 2006
On behalf of the Board of Directors
B. M.Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Chairman Managing Director & Chief Financial Head - Legal &
Chief Executive Officer Officer Company Secretary
Place : Gurgaon
Dated : 16th May, 2006
78
Auditors’ Report on Consolidated Financial Statement
AUDITORS’ REPORT TO THE BOARD OF DIRECTORS OF We report that the Consolidated Financial
ASAHI INDIA GLASS LIMITED ON THE CONSOLIDATED Statements have been prepared by the
FINANCIAL STATEMENTS OF ASAHI INDIA GLASS Company in accordance with the requirements
LIMITED AND ITS SUBSIDIARY of Accounting Standard (AS) – 21 Consolidated
Financial Statements and (AS) – 23 Accounting
We have examined the attached Consolidated for investments in Associates in Consolidated
Balance Sheet of Asahi India Glass Limited (The Financial Statements, issued by the Institute of
Company) and its subsidiary as at 31st March, Chartered Accountants of India.
2006, the Consolidated Profit and Loss Account for
the year ended on that date annexed thereto and On the basis of information and explanations
the Consolidated Cash Flow Statement for the year given to us and on consideration of the separate
ended on that date. audit reports on individual audited financial
statements of Asahi India Glass Ltd. and
These Consolidated Financial Statements are its aforesaid subsidiary, in our opinion, the
the responsibility of the management of Asahi
Consolidated Financial Statements together with
India Glass Limited. Our responsibility is to
the Significant Accounting Policies and Notes
express an opinion on these Consolidated
Financial Statements based on our audit. thereon give a true and fair view in conformity
with the accounting principles generally accepted
We conducted our audit in accordance with in India :
generally accepted auditing standards in
India. Those standards require that we plan a. In the case of Consolidated Balance Sheet, of
and perform the audit to obtain reasonable the consolidated state of affairs of Asahi India
assurance about whether the financial statements Glass Ltd. and its subsidiary as at 31st March,
are prepared in all material respects, in accordance 2006;
with an identified financial reporting framework
and are free of material misstatements. An audit b. In the case of Consolidated Profit and Loss
includes, examining on a test basis, evidence
Account, of the consolidated results of
supporting the amounts and disclosure
operations of Asahi India Glass Ltd. and its
in the financial statements. An audit
also includes assessing the accounting subsidiary for the year ended on that date,
principles used and significant and;
estimates made by management, as well as
evaluating the overall financial statements c. In the case of the Consolidated Cash Flow
presentation. We believe that our audit Statement, of the Consolidated Cash Flows of
provides a reasonable basis for our opinion. Asahi India Glass Ltd. and its subsidiary for the
year ended on that date.
We did not audit the financial statements of the
subsidiary whose financial statements reflect total
For Jagdish Sapra & Co.
assets of Rs. 21.80 Millions as at 31st March, 2006
Chartered Accountants
and total revenue of Rs. 124.49 Millions for the
year ended on that day. The financial statements
have been audited by other auditors whose report
has been furnished to us, and our opinion, in so Jagdish Sapra
far as it relates to the amounts included in respect Place : New Delhi Partner
of said subsidiary, is based solely on the report of Dated : 16th May, 2006 M. No. 9194
other auditors.
79
Consolidated Balance Sheet
Rs. Millions
Schedule As At 31st March, 2006 As At 31st March, 2005
SOURCES OF FUNDS
1. Shareholders’ Funds
a) Share Capital 1 219.93 139.96
b) Reserves and Surplus 2 2,358.04 2,577.97 1,684.48 1,824.44
2. Minority Interest
a) Capital 8.40 –
b) Reserves and Surplus (0.33) 8.07 – –
3. Loan Funds
a) Secured Loans 3 5,845.68 1,762.39
b) Unsecured Loans 4 2,821.67 8,667.35 2,688.26 4,450.65
4. Deferred Tax Liability 39.20 –
Total 11,292.59 6,275.09
APPLICATION OF FUNDS
1. Fixed Assets 5
a) Gross Block 9,198.83 7,877.47
b) Less : Depreciation and Amortisation 4,328.71 4,311.12
c) Net Block 4,870.12 3,566.35
d) Capital Work-in-progress 4,854.84 9,724.96 1,244.43 4,810.78
2. Investments - Long Term
a) Associates (Including goodwill Rs. 18.96 Millions
arising on acquisition of associates) 50.93 42.90
b) Others 25.76 76.69 9.61 52.51
3. Current Assets, Loans and Advances
Current Assets 6
a) Inventories 1,497.12 1,169.29
b) Sundry Debtors 322.18 744.95
c) Cash and Bank Balances etc. 92.31 98.76
d) Other Current Assets 103.21 77.32
Loans and Advances 7 835.88 414.17
2,850.70 2,504.49
Less: Current Liabilities and Provisions 8
a) Liabilities 1,229.82 928.32
b) Provisions 131.78 167.63
1,361.60 1,095.95
Net Current Assets 1,489.10 1,408.54
4. Miscellaneous Expenditure
(to the extent not written off or adjusted) 1.84 3.26
Total 11,292.59 6,275.09
Significant Accounting Policies and Notes on Accounts 13
The Schedules referred to above form an integral part of the Balance Sheet
On behalf of the Board of Directors
Per our report of even date
For Jagdish Sapra & Co.
Chartered Accountants
Jagdish Sapra B. M. Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Partner Chairman Managing Director & Chief Financial Head - Legal &
M. No. 9194 Chief Executive Officer Officer Company Secretary
Place : New Delhi Place : Gurgaon
Dated : 16th May, 2006 Dated : 16th May, 2006
80
Consolidated Profit and Loss Account
Rs. Millions
7,151.68 6,915.28
6,863.82 6,760.64
5,912.22 5,866.06
5,949.26 5,940.14
3,347.62 3,225.19
1,062.53 1,081.70
4,854.43 4,695.23
1,094.83 1,244.91
1,032.49
Earlier Years
Per our report of even date On behalf of the Board of Directors
For Jagdish Sapra & Co.
Chartered Accountants
Jagdish Sapra B. M. Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Partner Chairman Managing Director & Chief Financial Head - Legal &
M. No. 9194 Chief Executive Officer Officer Company Secretary
Place : New Delhi Place : Gurgaon
Dated : 16th May, 2006 Dated : 16th May, 2006
81
Schedules to the Consolidated Accounts
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 1 : SHARE CAPITAL
Authorised
50,00,00,000 (15,00,00,000) Equity Shares of
Re. 1 each 500.00 150.00
6,00,000 Preference Shares of Rs. 100 each 60.00 60.00
90,00,000 Preference Shares of Rs. 10 each 90.00 90.00
650.00 300.00
Issued, Subscribed and Paid Up
15,99,27,586 (7,99,63,793) Equity Shares of
Re. 1 each fully paid * 159.93 79.96
6,00,000 (6,00,000) 0.01% Non-Cumulative
Redeemable Preference Shares of
Rs. 100 each fully paid ** 60.00 60.00
219.93 139.96
Notes:
* Of the above 13,54,63,793 (5,55,00,000) Shares are allotted as fully paid bonus shares by capitalisation of General Reserve.
** The above shares are to be redeemed as follows :
Rs. 50 Millions to be redeemed on 23rd November, 2007.
Rs. 10 Millions to be redeemed on 26th March, 2008.
SCHEDULE 2 : RESERVES AND SURPLUS
Amalgamation Reserve 63.66 63.66
Capital Reserve 2.24 2.24
Capital Redemption Reserve 79.52 79.52
General Reserve
As per last Balance Sheet 1,518.96 1,000.00
Add : Share of Profit of Associates upto 31st March, 2004 – 18.96
Add : Transferred from Profit and Loss Account 89.96 595.53
Less : Accumulated Impairment Losses – 95.53
Less : Capitalised for issue of Bonus Shares 79.97 1,528.95 – 1,518.96
Surplus in Profit and Loss Account 683.67 20.10
2,358.04 1,684.48
82
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 3 : SECURED LOANS
Banks
Working Capital 1,475.82 1,519.19
Foreign Currency Term Loan 892.50 8.47
Rupee Term Loan 350.00 2,718.32 – 1,527.66
Others
Foreign Currency Term Loan 2,900.62 –
Loan from Distt. Industries Centre
Government of Haryana (Interest Free) 226.74 3,127.36 234.73 234.73
5,845.68 1,762.39
Notes:
Working capital loans are secured by way of first charge on the current assets of the Company, both present and future.
Rupee term loan is secured by way of first charge by way of mortgage over land, building and plant and machinery and other fixed
assets of plant at Sriperumpdur, Tamil Nadu.
Foreign currency term loans are secured by way of mortgage over immovable and movable assets of the project at Roorkee,
Uttaranchal.
Loan from Distt. Industries Centre is secured by way of first charge by way of mortgage over immovable and movable assets of
plant at Rewari, Haryana.
SCHEDULE 4 : UNSECURED LOANS
Short Term/Bridge Loans From Banks 691.76 600.12
Foreign Currency Loan (Interest Free) 2,129.91 2,088.14
2,821.67 2,688.26
83
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 6 : CURRENT ASSETS
Inventories
i. Stores, Spare parts etc. 255.48 275.82
ii. Raw Materials 622.48 380.98
iii. Finished and Traded Goods 555.60 432.09
iv. Waste 3.48 7.05
v. Work in Process 60.08 73.35
1,497.12 1,169.29
Sundry Debtors (Considered good except where provided for)
Secured
Over Six Months 1.29 0.70
Others – 1.29 54.74
Unsecured
Over Six Months 65.08 42.51
Others 284.90 349.98 676.48
351.27 774.43
Considered Good 322.18 744.95
Considered Doubtful 29.09 29.48
Less : Provision for Doubtful debts 29.09 29.48
322.18 744.95
Cash and Bank Balances etc.
Cash in Hand (As certified) 1.70 0.66
Cheques in Hand/Remittances in Transit – 0.05
Balance with Post Office in Saving Account 0.01 0.01
Balances with Scheduled Banks
In Current/Cash Credit Accounts 76.74 84.82
In Deposit Account 0.05 0.05
In Dividend Warrant Account 13.81 13.17
92.31 98.76
Other Current Assets (Unsecured and considered good)
Interest Accrued on Investments * *
Impaired Assets for disposal 13.02 9.23
Deposits with Government and others 90.19 68.09
103.21 77.32
* Rounded off to Nil
84
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 7 : LOANS AND ADVANCES
(Unsecured and considered good)
Loans (Including interest accrued) 14.11 18.84
Advances
Advances recoverable in cash or in kind
or for value to be received and/or adjusted 395.46 215.93
MAT Credit Recoverable 72.61 –
Balance with Excise Authorities 353.70 179.40
835.88 414.17
SCHEDULE 8 : CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Acceptances 5.57 6.20
Sundry Creditors
Dues to Small Scale Industrial Undertakings 2.25 4.22
Others 895.01 755.01
Advances from Customers 45.68 32.58
Unclaimed Dividend 13.81 13.17
Other Liabilities 225.10 113.47
Interest Accrued but not due on loans 42.40 3.67
1,229.82 928.32
Provisions
Current Tax (Net of taxes paid) 5.40 8.41
Proposed Dividend on Preference Shares 0.01 0.01
Proposed Dividend on Equity Shares 95.96 119.95
Dividend Tax 13.46 16.82
Fringe Benefit Tax 0.11 –
Provisions towards Gratuity, Superannuation and Leave Encashment 16.84 22.44
131.78 167.63
85
Rs. Millions
Year Ended 31st March, 2006 Year Ended 31st March, 2005
SCHEDULE 9 : OTHER INCOME
Interest 2.98 4.95
Rent Received 0.21 0.18
Profit on Sale of Fixed Assets (Net) 1.12 –
Profit on Sale of Long Term Investments – 0.02
Profit on Sale of Current Investments 0.67 0.29
Diminution in Value of Investments Reversed – 4.80
Exchange Rate Fluctuations (Net) – 38.53
Liabilities and Provisions Written Back 21.54 4.88
Dividend on Long Term Investments - Non Trade (Gross) 0.41 0.41
Miscellaneous 10.11 20.02
37.04 74.08
SCHEDULE 10 : MATERIALS AND MANUFACTURING
Raw Materials Consumed
Opening Stock 380.98 323.88
Add : Purchases 2,099.22 1,763.89
2,480.20 2,087.77
Less : Sales/Trial Run 11.38 8.09
Closing Stock 622.48 1,846.34 380.98 1,698.70
Excise Duty on Increase/(Decrease) in Finished Goods Stock 26.61 (20.74)
Purchases of Finished Goods 95.27 39.70
Manufacturing Expenses
Power, Fuel, Water and Utilities 848.43 869.43
Stores and Spares etc. consumed 352.53 320.81
Miscellaneous Expenses 85.32 75.73
Repairs and Maintenance
Plant and Machinery 178.49 139.00
Building 21.30 199.79 19.07 158.07
Add/(Less) : Decrease/(Increase) in Stocks
Opening Stock
Finished and Traded Goods 432.09 563.76
Work in Process 73.35 31.29
Waste 7.05 0.93
512.49 595.98
Closing Stock
Finished and Traded Goods 555.60 432.09
Work in Process 60.08 73.35
Waste 3.48 7.05
619.16 (106.67) 512.49 83.49
3,347.62 3,225.19
86
Rs. Millions
Year Ended 31st March, 2006 Year Ended 31st March, 2005
SCHEDULE 11 : PERSONNEL
Salaries, Wages, Allowances and Bonus 330.98 294.22
Recruitment and Training Expenses 8.88 5.48
Welfare Expenses 75.95 59.78
Contribution to Provident and Other Funds 27.06 27.45
442.87 386.93
SCHEDULE 12 : SELLING, ADMINISTRATION AND OTHERS
Advertisement 77.17 75.27
Packing and Forwarding 434.89 565.64
Commission Paid 34.29 39.07
Royalty 51.41 61.92
Cash Discount 42.91 44.68
Interest
On Fixed Loans 90.90 23.00
Others 18.16 109.06 8.56 31.56
Bank Charges 10.08 9.14
Travelling and Conveyance 51.02 46.42
Rent 27.04 21.27
Rates and Taxes 14.08 9.08
Insurance 20.59 16.45
Auditors Remuneration 1.89 1.68
Repairs and Maintenance Others 14.76 13.31
Miscellaneous Expenses 148.02 143.42
Loss on Sale of Fixed Assets (Net) – 1.48
Exchange Rate Fluctuations 18.87 –
Director’s Sitting Fee 0.76 0.76
Bad Debts and Miscellaneous Balances Written Off (Net) 5.69 0.55
1,062.53 1,081.70
SCHEDULE 13 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
1) Significant Accounting Policies
a. Basis of preparation of Financial Statements
i. The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the
Accounting Standards issued by the Institute of Chartered Accountants of India and relevant provisions of the
Companies Act, 1956.
ii. Financial Statements are based on historical cost and are prepared on accrual basis.
b. Principles of Consolidation
The Consolidated Financial Statements relate to Asahi India Glass Ltd. (the Company), its subsidiary AIS Glass
Solutions Ltd. and associates.
87
The subsidiary company considered in the consolidated financial statements is :
Name of the Company Country of Incorporation % of share holding Held by
AIS Glass Solutions Ltd. India 77.89% Asahi India Glass Ltd.
The associate companies considered in the consolidated financial statements are :
Name of the Company Status Country % of share Held by Financial
of Incorporation holding Statements
AIS Adhesives Ltd. Audited India 50% Asahi India As on 31st
Glass Ltd. March, 2006
Asahi India Map Auto Audited India 49.98% Asahi India As on 31st
Glass Ltd. Glass Ltd. March, 2006
Vincotte International Un-Audited India 20% Asahi India As on 31st
India Assessment Glass Ltd. March, 2006
Services (P) Ltd.
The consolidated financial statements have been prepared on the following basis : -
i. The Financial Statements of the Company and its subsidiary have been combined on line-by-line basis by adding
together the book value of like items of assets, liabilities, income and expenses after fully eliminating intra group
balances, intra group transactions and unrealised profit or loss as per Accounting Standard (AS) 21- Consolidated
Financial Statements issued by the Institute of Chartered Accountants of India.
ii. The goodwill/capital reserve on consolidation is recognised in the consolidated financial statements.
iii. The consolidated financial statements have been prepared using uniform accounting policies for like transactions
and other events in similar circumstances and are presented to the extent possible, in the same manner as the
Company’s financial statements.
iv. Minority interest in the net income and net assets of the consolidated financial statements are computed and shown
separately.
v. Investments in associate companies have been accounted under the equity method as per Accounting Standard
(AS)- 23 Accounting for Investments in Associates in Consolidated financial statements issued by the Institute of
Chartered Accountants of India.
i. Fixed assets are stated at cost (net of CENVAT wherever applicable) less accumulated depreciation and impairment
loss. Cost is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their
working conditions for intended use but excludes recoveries. Intangibles are stated at cost less accumulated
amount of amortisation.
ii. Capital work in progress includes expenditure during construction period incurred on projects under implementation
treated as Pre-operative expenses pending allocation to the assets. These expenses are apportioned to fixed assets
on commencement of commercial production.
Tangible Assets
i. Depreciation on fixed assets is provided on Straight Line Method (SLM) at the rates and in the manner provided
in Schedule XIV of the Companies Act, 1956. From the current year depreciation method in Auto SBU of Company has
been changed from Written down value (WDV) to SLM. In Subsidiary, Depreciation is provided on WDV method .
ii. Leasehold land is depreciated over the period of lease.
iii. Assets costing less than Rs. 5000/- each are depreciated fully in the year of purchase.
Intangible Assets
The depreciable amount of intangible asset is allocated over its useful life. Computer Software, production design and
E-mark charges are amortised over a period of five years proportionately when such assets are available for use.
88
e. Inventories
Inventories are valued at lower of cost or net realisable value except waste which is valued at estimated realisable value
as certified by the Management. The basis of determining cost for various categories of inventories in the Company are
as follows :
Stores, spare parts and raw material Weighted average cost (except stores segregated for specific purposes and
in transit valued at their specific costs).
Work in process and finished goods Material cost plus proper share of production overheads and excise duty
wherever applicable.
In Subsidiary cost is determined on FIFO basis.
f. Revenue Recognition
Domestic and export sales are recognised on despatch of goods from the factory and port respectively. Sales are recorded
net of rebate, trade discounts, sales tax, returns and transit insurance claims short received but include outwards freight
as per sale invoices.
g. Retirement Benefits
The contribution to Provident Fund and Family Pension Fund is charged to the Profit and Loss Account.
The Company had schemes of Superannuation Fund and Gratuity Fund towards retirement benefits but the scheme of
Superannuation Fund for retirement benefit has been discontinued for the year. The Gratuity Fund benefits are administrated
by a Trust and through the Group Schemes of the Life Insurance Corporation of India/HDFC Standard Life Insurance. The
Liability for gratuity at the end of each financial year is determined on the basis of actuarial valuation carried out by
the Insurer’s actuary as confirmed to the Company. The Company’s contributions are charged to Profit and Loss Account.
Provision for leave encashment benefit on retirement in the Company is made on the basis of actuarial valuation at the
year end.
In Subsidiary Gratuity and Superannuation liabilities are provided as per the contract with the respective employees.
h. Foreign Exchange Transactions
Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions.
Current assets, current liabilities and loans denominated in foreign currencies and outstanding at year end are
translated at the rates prevailing on the date of the Balance Sheet and resultant exchange loss/gain and also the
realised exchange loss/gain are dealt in Profit and Loss Account. However, the exchange loss/gain on liabilities incurred
and foreign currency loans utilised for acquisition of fixed assets is adjusted to the carrying cost of fixed assets.
Where forward contracts are entered into, the difference between the forward rate and exchange rate on the date of
transaction is recognised as income/expense over the life of the contract. Profit/Loss on cancellation or renewal of forward
contracts is recognised as income/expense for the period.
i. Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the
cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended
use. All other borrowing costs are charged to revenue.
j. Miscellaneous Expenditure
In the Company expenses incurred on amalgamation before 1st April, 2003 including filing fees paid for increase in
authorised capital are considered as deferred revenue expenditure and written off over a period of five years.
In subsidiary preliminary expenses are amortised over a period of five years.
k. Taxation
Provision for current tax is computed as per estimated ‘Total Income’ returnable under the Income Tax Act, 1961 taking into
account available deductions, exemptions and carried forward losses.
89
Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between
taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent
periods. Deferred tax asset is not recognised on unabsorbed depreciation and carry forward of losses unless there is virtual
certainty and convincing evidence that there will be sufficient future taxable income available to realise such asset.
l. Provisions and Contingent Liabilities
A provision is recognised when the Company has a present obligation as a result of a past event and it is probable that an
outflow of resources would be required to settle the obligation, and in respect of which a reliable estimate can be made.
Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation.
A contingent liability is disclosed after a careful evaluation of the facts and legal aspects of the matter involved where the
possibility of an outflow of resources embodying the economic benefits is remote.
m. Impairment of Assets
The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment of assets. If any
such indication exists, impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable
amount is provided in the books of accounts. In case there is any indication that an impairment loss recognised for an
asset in prior accounting periods no longer exists or may have decreased, the recoverable value is reassessed and the
reversal of impairment loss is recognised as income in the Profit and Loss Account.
NOTES ON ACCOUNTS
2) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 1,418.13 Millions
(Rs. 2,310.43 Millions) (net of advances).
3) Contingent Liabilities for
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
a. Bank guarantees and letters of credit outstanding 779.31 2.033.44
b. Claims against the Company not acknowledged as debts
i. Disputed excise and custom duty
(including referred in Note No. 6) 511.13 513.88
ii. Disputed income tax demands 5.25 3.15
iii. Others 10.33 1.27
4) During the year the Company has changed the method of providing Depreciation from written down value method (WDV) to
straight line method (SLM) for Fixed Assets of Auto SBU. In accordance with the Accounting Standard (AS)-6 “Depreciation
Accounting” issued by the Institute of Chartered Accountants of India, depreciation has been recalculated as per the new
method from the date of the asset coming into use. Consequent to the above change:-
i. there is a reduced charge of depreciation of Rs. 400.77 Millions relating to earlier years which has been written back.
ii. the depreciation charge for the year is lower by Rs. 147.64 Millions.
iii. the profit before tax for the year and the net block of Fixed Assets at the year end is higher by Rs. 548.41 Millions.
5) In the Company purchases of raw materials during the year are net of quality claims against the suppliers including claims
of Rs. 67.16 Millions (Rs. 41.11 Millions) yet to be settled. Adjustment for difference, if any, will be made in accounts on
finalisation of the claims.
6) a. In a previous year, in Auto SBU of the Company, Custom and Central Excise Settlement Commission settled Excise Duty
Liability at Rs. 36.79 Millions (Rs. 36.79 Millions) (excluding interest) out of which the Company had accepted liability of
Rs. 5.64 Millions (Rs. 5.64 Millions) and paid the same along with interest of Rs. 2.01 Millions (Rs. 2.01 Millions). Against
the balance liability Civil Writ Petition was accepted by High Court of Delhi against the payment of Rs. 10 Millions (Rs. 10
Millions) (included in Advances - Schedule 7) and on furnishing bank guarantee for the balance amount. In the previous
year the High Court remanded back the matter to the Customs and Central Excise Settlement Commission against which
the Excise Authorities have filed an appeal before the Supreme Court. The final liability, if any, will be accounted on
disposal of the appeal.
b. Deputy Commissioner of Customs (Original Authority) in a previous year issued an order imposing additional custom
duty of about Rs. 179.30 Millions (Rs. 179.30 Millions) on the value of project imports made by erstwhile Floatglass India
Ltd.(amalgamated with the Company with effect from 1st April, 2002). On appeal by the Company, Commissioner Customs
(Appeals) set aside the above order on 25th Nov., 2002 against which the Commissioner of Customs filed an appeal before
the Customs Excise and Service Tax Appellate Tribunal. In the previous year the matter was remanded back to the Original
Authority for fresh decision. The liability, if any, will be accounted on final decision by Original Authority.
90
c. Against the show cause notices issued in preceding years to erstwhile Floatglass India Limited Commissioner of
Central Excise Customs & Service Tax confirmed excise duty liability of Rs. 259.50 Millions (Rs. 259.50 Millions) approximately
including penalty (excluding interest) in the previous year. Against the above Orders, the Company has filed appeals
during the year before the Customs, Excise & Service Tax Appellate Tribunal. The Company does not expect any liability
on this account on the basis of legal opinion obtained from an eminent lawyer. The liability, if any, will be accounted on final
disposal of appeals.
7) In July 2005, due to unrelenting rainfall in Maharashtra, plant at T-7, Taloja of float SBU of Company was shut down from
26th July, 2005 to 28th Oct., 2005 due to water inundation. This caused extensive damage to assets/inventories and
expenditure was incurred on repair, power, fuel and utilities for resumption of operations amounting to Rs. 124.44 Millions
shown as Extraordinary Items in Profit and Loss Account.
8) Detail of Deferred Tax Assets/(Liability) arising on account of timing difference are as follows
Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
Deferred Tax Assets / (Liabilities)
Unabsorbed depreciation/carried forward of losses under Tax Laws 584.48 591.74
Difference between book depreciation and depreciation
under the Income Tax Rules (640.74) (409.71)
Expenses allowed for tax purpose on payment basis 6.09 (3.46)
Expenditure claimed as revenue under the Income Tax
Act, 1961, but treated as deferred revenue in the books 0.71 1.11
Provision for doubtful debts and advances 9.80 10.79
Others 0.46 2.12
(39.20) 192.59*
* Not Recognised in the profit and loss account as a matter of prudence in the previous year.
9) Capital work in progress comprises of the following Rs. Millions
As At 31st March, 2006 As At 31st March, 2005
Building under construction 1,212.05 61.90
Machinery under erection 2,371.53 401.27
Electric installations under erection 127.45 1.68
Loan processing charges 256.99 -
Capital advances 606.19 701.44
Preoperative expenses 280.63 78.14
Total 4,854.84 1,244.43
10) Earning Per Share (EPS) Rs. Millions
2005-2006 2004-2005
a. Profit after tax and before extra ordinary items 987.40 771.84
Less Preference Dividend Including Tax thereon 0.01 4.34
Profit Attributable to Equity shareholders - (A) 987.39 767.50
Basic/Weighted average number of Equity Shares
outstanding - (B) 15,99,27,586 15,99,27,586
Nominal Value of Equity Shares (Re.) 1/-each 1/-each
Basic/Diluted Earnings Per Share (Rs.) - (A)/(B) 6.17 4.80
b Profit after tax and after extra ordinary items,
attributable to Equity shareholders 862.95 767.50
Basic/Diluted Earnings per share (Rs.) 5.39 4.80
91
11) Related Party Disclosures under Accounting Standard (AS) - 18
a. List of Related Parties
i. Associates : AIS Adhesives Ltd., Asahi India Map Auto Glass Ltd., Vincotte International India Assessment Services (P) Ltd.
ii. Enterprises owned or significantly influenced by key management personnel or their relatives :
Shield Autoglass Ltd., Samir Paging Systems Ltd., R.S .Estates (P) Ltd., Nishi Electronics (P) Ltd., Maltex Malsters Ltd., Essel
Marketing (P) Ltd., Allied Fincap Services Ltd., Usha Memorial Trust, ACMA, Krishna Maruti Ltd.
iii. Key Management Personnel and their relatives :
Directors - Mr. B. M. Labroo, Mr. Sanjay Labroo, Mr. P. L. Safaya, Mr. K. Kojima, Mr. Arvind Singh, Mr. Kunwar Narayan
Relatives - Mrs. Kanta Labroo, Mrs. Rajni Safaya, Mrs. Vimi Singh
iv. Other related parties where control exists :
Asahi Glass Co. Limited, Japan and its subsidiaries - AGC Flat Glass Asia Pacific Pte. Ltd., Asahi Glass Machinery Co. Ltd.,
Asahi Glass Phillipines Inc., Glavermas Pte Ltd., Glavermas Mirrors Pte Ltd., Glaverbel S. A., Asahi Glass Ceramics Co. Ltd.,
P. T. Asahimas Flat Glass TBK Indonesia, AGC Automotive Thailand Co. Ltd.
92
12 . Segmant Information
a) Information about Primary Business Segments
Rs.Millions
Particulars Automotive Glass Float Glass Unallocable Elimination Total
Segment revenue
External 3,686.91 2,123.48 133.69 5,944.08
(3,273.21) (2,677.18) (0.01) (5,950.40)
Inter segment sales (Net of excise duty) 18.97 155.53 89.17 (263.67)
(16.97) (115.13) (Nil) (-132.10)
Other income 5.18 5.18
(10.47) (10.47)
Total revenue 3,705.88 2,279.01 228.04 (263.67) 5,949.26
(3,290.18) (2,792.31) (10.48) (-132.10) (5,960.87)
Segment result 1,011.22 81.71 (81.01) 1,011.92
(539.17) (334.54) (Nil) (873.71)
Unallocated Income (net of expenses) 2.21 2.21
(-4.65) .(-4.65)
Operating profit 1,011.22 81.71 (78.80) 1,014.13
(539.17) (334.54) (-4.65) (869.06)
Interest expense 109.06 109.06
(31.56) (31.56)
Interest income 2.98 2.98
(4.95) (4.95)
Income taxes - Current 74.80 74.80
(67.00) (67.00)
Deferred 39.20 39.20
(Nil) (Nil)
Fringe Benefit Tax 8.75 8.75
(Nil) (Nil)
MAT Credit (72.61) (72.61)
(Nil) (Nil)
Taxes paid for earlier years Nil Nil
(3.61) (3.61)
Net profit 1,011.22 81.71 (235.02) 857.91
(539.17) (334.54) (-101.87) (771.84)
Other information
Segment assets 4,558.16 7,090.46 1,005.57 12,654.19
(3,378.01) (3,886.45) (106.56) (7,371.02)
Total assets 4,558.16 7,090.46 1,005.57 12,654.19
(3,378.01) (3,886.45) (106.56) (7,371.02)
Segment liabilities 504.51 563.94 293.15 1,361.60
(542.77) (389.94) (163.24) (1,095.95)
Share capital and reserves 2,577.97 2,577.97
(1,824.43) (1,824.43)
Secured and unsecured loans 8,667.35 8,667.35
(4,450.65) (4,450.65)
Minority Interest (8.07) (8.07)
(Nil) (Nil)
Deferred Tax Liability 39.20 39.20
(Nil) (Nil)
Total liabilities 504.51 563.94 11,585.74 12,654.19
(542.77) (389.94) (6,438.21) (7,371 .02)
Capital expenditure 972.27 3,646.40 405.36 5,024.03
(1,316.19) (869.36) (6.10) (2,191.65)
Depreciation / Amortisation 248.84 192.85 23.93 465.62
(196.02) (207.17) (0.56) (403.75)
Depreciation / Amortisation ( Written Back) 400.77 400.77
(Nil) (Nil)
Non cash expenses other than depreciation/amortisation 1.20 Nil 0.21 1.41
(1.20) (Nil) (0.21) (1.41)
b) Information about Secondary Business Segments
Particulars India Outside India Total
Revenue by Geographical Market
External 6,126.47 86.46 6,212.93
(5,816.06) (276.91) (6,092.97)
Less: Inter segment sales (Net of excise duty) 263.67 263.67
(132.10) (132.10)
Total 5,862.80 86.46 5,949.26
(5,683.96) (276.91) (5,960.87)
13) Previous year’s figures have been regrouped/rearranged, wherever found necessary. Figures in brackets above are in respect
of previous year.
14) Figures have been rounded off to Rs. Millions upto two decimal points.
Per our report of even date On behalf of the Board of Directors
For Jagdish Sapra & Co.
Chartered Accountants
Jagdish Sapra B. M. Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Partner Chairman Managing Director & Chief Financial Officer Head - Legal &
M. No. 9194 Chief Executive Officer Company Secretary
Place : New Delhi Place : Gurgaon
Dated : 16th May, 2006 Dated : 16th May, 2006
93
Consolidated Cash Flow Statement
Rs. Millions
2005-2006 2004-2005
Amount Amount Amount Amount
A) CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax and extraordinary items 1,033.78 841.15
Adjustment for:
Depreciation and Amortisation of Intangible Assets 64.85 403.75
Impairment Loss Reversed (3.80) –
(Profit)/ Loss on sale of fixed assets and assets discarded (Net) (1.12) 1.49
(Profit)/ Loss on sale of Long Term Investments – (0.02)
(Profit)/ Loss on sale of Current Investments (0.67) (0.29)
Deferred revenue expenditure written off 1.41 1.41
Diminution / (Increase) in the value of long term investments 1.35 (4.80)
Extra Ordinary Items (124.44) –
Interest paid 109.06 31.56
Interest received (2.98) (4.95)
Dividend received (0.41) (0.41)
Operating Profit before working capital changes 1,077.03 1,268.89
Adjustment for:
Trade and other receivables 51.56 (345.67)
Inventories (327.83) (89.39)
Trade payable 292.36 146.29
Cash Generated From Operations 1093.12 980.12
Interest paid (109.06) (31.56)
Direct taxes paid (83.55) (67.82)
Increase in deferred revenue expenditure – (1.08)
Cash Flow Before Prior Period Items 900.51 879.66
Prior Period items (1.29) (2.80)
Net Cash From Operating Activities 899.22 876.86
B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets,including capital
work in progress (5,018.60) (2,279.65)
Sale of fixed assets 40.70 1.25
Purchase of Investments (20.80) (1.00)
Sale of investments – 0.29
(Profit)/ Loss on sale of Current Investments 0.67 0.29
Dividend received on investments 0.41 0.41
Interest received 2.98 4.95
Net Cash Used In Investing Activities (4,994.64) (2,273.46)
94
Rs. Millions
2005-2006 2004-2005
Amount Amount Amount Amount
C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of Equity Shares 8.40 –
Proceeds of long term borrowing 4,176.90 36.80
Payment of long term borrowings (8.47) (65.10)
Net proceeds of short term borrowing 48.28 1,774.68
Redemption in Preference shares – (79.52)
Dividend and dividend tax paid (136.78) (302.37)
Net Cash Used In Financing Activities 4,088.33 1,364.49
Net Increase/(Decrease) In Cash And
Cash Equivalent (A+B+C) (7.09) (32.11)
Cash and Cash Equivalent As At 1st April, 2005 85.59 117.70
(Opening Balance)
Cash and Cash Equivalent As At 31st March, 2006 78.50 85.59
(Closing Balance)
Notes :
i. The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting
Standard (AS) - 3 on Cash Flow Statement issued by the Institute of Chartered Accountants of India.
ii. Figures in brackets represent outflows.
iii. Previous year figures have been restated wherever necessary.
Per our report of even date On behalf of the Board of Directors
For Jagdish Sapra & Co.
Chartered Accountants
Jagdish Sapra B. M. Labroo Sanjay Labroo H. D. Daftary Rajesh Mukhija
Partner Chairman Managing Director & Chief Financial Head - Legal &
M. No. 9194 Chief Executive Officer Officer Company Secretary
Place : New Delhi Place : Gurgaon
Dated : 16th May, 2006 Dated : 16th May, 2006
95
AIS GLASS SOLUTIONS LTD.
Report of the Directors
To the Members,
The Directors are pleased to present the 2nd Report and audited accounts for the year ended 31st March, 2006.
Financial Highlights
(Rs. Lakhs)
2005-06 2004-05
Sales 1201.13 0.11
Other Income 43.77 -
Loss Before Depreciation / Amortisation 25.07 109.14
Less : Depreciation / Amortisation 17.78 5.56
Loss Before Tax 42.85 114.70
Less : Provision for F ringe Benefit Tax 4.50 -
Loss After Tax 47.35 114.70
Operations
2005-06 was the first full year of operations for the Company. The Company sold 79,897 sq.mtrs. of architectural
processed glass and glass products and recorded a gross revenue of Rs. 1,244.90 lakhs. The total expenditure
amounted to Rs. 1,287.75 lakhs. The loss before tax amounted to Rs. 42.85 lakhs.
The Company emerged as a leader in the architectural glass processing business by the end of the financial year, with
month on month sales growing by over 29 per cent.
Key highlights of the year include :
Commissioning of three factories within 365 days.
Developing a national sales force, with 32 sales personnel and over 65 channel partners, which is among the
most knowledgeable sales force in the country on glass.
Launching of innovative, value-added products like AIS Securityglas™ and AIS Acousticglas™.
Making entry into projects segment.
Setting up AIS Order Tracking Systems – a real time, multiple-user, multiple-department, collaborative, online
information tracking software.
Developing comprehensive website, www.aisglass.com, for technical information, order tracking, online demos
and enquiry generation.
Organizing Glass Training Workshops in ten cities for over 1,000 architects, builders, fabricators, consultants,
contractors, to provide training on glass and glazing.
Publishing a Glass Training Manual, the first of its kind in the country.
Developing AIS Glass Configurator – a software for calculating wind-loads, heat insulation, acoustic insulation
and thermal breakage.
Share Capital
The Board of Directors and the Shareholders of the Company in their meetings held on 25th July, 2005 and
23rd August, 2005 respectively, approved issue of 10,40,000 equity shares of Rs. 10/- each at par value, to key
employees, directors and associates of the Company and its associate companies to motivate and promote a
participative spirit in the growth of the Company. Out of the said 10,40,000 equity shares, 8,40,000 equity shares of
Rs.10/- each were allotted during the year.
96
AIS GLASS SOLUTIONS LTD.
The Company also allotted 4,10,000 equity shares of Rs. 10/- each at par to its holding Company, Asahi India Glass
Ltd. Pursuant thereto, the holding of Asahi India Glass Ltd. in the Company stands increased to 29,60,000 equity
shares of Rs. 10/- each, constituting 77.89 per cent of the total paid up capital of the Company.
Dividend
The Directors have not recommended any dividend for the financial year 2005-06.
Directors
During the year under review, Mr. P.L. Safaya was appointed as Additional Director on the Board of Directors of the
Company with effect from 30th August, 2005.
Mr. P.L. Safaya holds office upto the date of the forthcoming Annual General Meeting. A notice under Section 257 of
the Companies Act, 1956 has been received from a member proposing the candidature of Mr. Safaya for the office of
Director of the Company.
In terms of Article 86 of the Articles of Association of the Company, Mr. Sanjay Labroo, Director retires by rotation and,
being eligible, offers himself for re-appointment.
Necessary resolutions for obtaining approval of the members have been incorporated in the notice of the forthcoming
Annual General Meeting of the Company.
Directors’ Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors hereby state and confirm :
1) That in the preparation of the annual accounts, the applicable accounting standards had been followed along
with proper explanation relating to material departures;
2) That the Directors had selected such accounting policies and applied them consistently and made judgements
and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit or loss of the Company for that period;
3) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
4) That the Directors had prepared the annual accounts on a going concern basis.
Fixed Deposits
Your Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 during
the year. As such, no amount of principal or interest was outstanding as on the balance sheet date.
Auditors and Auditors’ Report
The Auditors of the Company, M/s Jand & Associates, Chartered Accountants hold office till the conclusion of the
forthcoming Annual General Meeting and, being eligible, offers themselves for re-appointment.
The Company has received a letter from the Auditors to the effect that their re-appointment, if made, would be within
the prescribed limits under Section 224(1B) of the Companies Act, 1956.
The Notes to the Accounts, referred to in the Auditors’ Report, are self-explanatory and, therefore, do not call for any
further comments.
97
AIS GLASS SOLUTIONS LTD.
Conservation of Energy, Research & Development, Technology Absorption, Foreign
Exchange Earnings and Outgo
During the year under review, your Company was not engaged in the manufacturing activities. Therefore, the
particulars as required under Section 217(1)(e) read with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 regarding the conservation of energy, research and development and technology
absorption are not applicable.
Foreign exchange outflow on account of travel, training fee and other miscellaneous purposes amounted to Rs. 3.30
lakhs (Rs. 1.94 lakhs).
There was no foreign exchange earnings during the year.
Particulars of Employees
As required, no employee of the Company was in receipt of remuneration exceeding the limits prescribed under
Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.
Acknowledgement
Your Directors wish to place on record their sincere appreciation for the continued assistance, guidance and support received
from the customers, banks, vendors and the Government authorities.
Your Directors acknowledge with gratitude the efforts put in by the employees at all levels and for the continued patronage
and support extended by our valued shareholders.
For and on behalf of the Board
Place : New Delhi Sanjay Labroo
Dated : 8th May, 2006 Chairman
98
AIS GLASS SOLUTIONS LTD.
Auditors’ Report
To the Members,
AIS GLASS SOLUTIONS LTD.
New Delhi
1) We have audited the attached Balance Sheet of c. The Balance Sheet, Profit and Loss Account and
AIS Glass Solutions Ltd. as at March 31, 2006 and Cash Flow Statement dealt with by this report are
also the annexed Profit and Loss Account and Cash in agreement with the books of account;
Flow Statement of the Company for the year ended
on that date. These financial statements are the d. In our opinion, Balance Sheet, Profit and Loss Ac-
responsibility of the Company’s management. Our count and Cash Flow Statement dealt with by this
responsibility is to express an opinion on these report comply with the Accounting Standards re-
financial statements based on our audit. ferred to in Sub-Section (3C) of Section 211 of the
Companies Act, 1956;
2) We conducted our audit in accordance with the
auditing standards generally accepted in India. e. On the basis of written representations received
Those Standards require that we plan and perform from the directors and taken on record by the
the audit to obtain reasonable assurance about Board of Directors, we report that prima facie
whether the financial statements are free of mate- none of the directors is disqualified from be-
rial misstatement. An audit includes examining on ing appointed as a director in terms of Section
a test basis, evidence supporting the amounts and 274(1)(g) of the Companies Act, 1956 as at March
disclosures in the financial statements. An audit 31, 2006.
also includes assessing the accounting principles
used and significant estimates made by manage- f. In our opinion and to the best of our information
ment, as well as evaluating the overall financial and according to the explanations given to us,
statement presentation. We believe that our audit the said accounts read together with the notes
provides a reasonable basis for our opinion. thereon, give the information required by the
Companies Act, 1956 in the manner so required
3) As required by the Companies (Auditors’ Report) and give a true and fair view in conformity with
Order, 2003 issued by the Central Government of the accounting principles generally accepted in
India in terms of Section 227(4A) of the Companies India:
Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 & 5 of the i. In the case of the Balance Sheet, of the state of
said order to the extent these are applicable. affairs of the Company as at March 31, 2006 and
4) Further to our comments in the Annexure referred ii. In the case of Profit and Loss Account, of the loss
to above, we report that: for the year ended on that date.
a. We have obtained all the information and ex- iii. In the case of the Cash Flow Statement, of the
planations which to the best of our knowledge cash flows for the year ended on that date.
and belief were necessary for the purpose of our
audit;
For Jand & Associates
b. In our opinion, proper books of account as re- Chartered Accountants
quired by law have been kept by the Company so
far as it appears from our examination of these (Pawan Jand)
books; Place : New Delhi Prop.
Dated : 8th May, 2006 M.No. 80-501
99
AIS GLASS SOLUTIONS LTD.
Annexure to the Auditors’ Report
(Referred to in paragraph 3 of Auditors’ Report of even date)
i. a. The Company has maintained proper records with regard to the purchase of inventories and
showing full particulars, including quantitative fixed assets and with regard to the sale of goods.
details and situation of fixed assets. Further, on the basis of our examination and
according to information and explanations given
b. As per information and explanations given to us, to us we have neither come across nor have been
the fixed assets have been physically verified by informed of any instance of major weaknesses in
the management during the year and no material the aforesaid internal control procedures.
discrepancy was noticed on such verification.
v. a. According to information and explanations
c. In our opinion and according to the information and given to us, the Company has entered in to the
explanations given to us, there is no substantial Register maintained under section 301 all such
disposal of fixed assets during the year. transactions, which needs to be entered into such
Register.
ii. a. As per information and explanations given to us,
the inventory has been physically verified during b. According to the information and explanations
the year by the management. In our opinion the given to us, the transactions of purchase of goods
frequency of verification is reasonable. and materials made in pursuance of contracts or
arrangements entered in the register maintained
b. In our opinion and according to the information under Section 301 of the Act, and aggregating
and explanations given to us, the procedure during the year to Rs. 5,00,000 or more in respect
of verification of inventories followed by the of each party, have been made at prices which are
management are reasonable and adequate in reasonable having regard to the prevailing market
relation to the size of the Company and the nature prices for such goods and materials.
of its business.
vi. In our opinion and according to the information
c. In our opinion and according to the information and explanations given to us, the Company has
and explanations given to us, the Company has not accepted any deposits within the meaning of
maintained proper records of inventory and as Section 58A and 58AA of the Companies Act, 1956
per information and explanation given to us, no and the rules framed there under.
discrepancy has been noticed between physical
stock and book records on such verification. vii. In our opinion and according to the information
and explanations given to us, the Company has
iii. The Company has neither granted nor taken any an internal audit system, however the same needs
loans secured or unsecured to/from Companies, to be strengthened to make it commensurate
firms or other parties listed in the register with the size of the Company and nature of its
maintained under Section 301 of the Companies business.
Act, 1956.
viii. The maintenance of cost records for the
iv. In our opinion and according to the information Company’s business has not been prescribed by
and explanations given to us, there are adequate the Central Government under Section 209 (1) of
internal control procedures commensurate with the Companies Act, 1956.
the size of the Company and nature of its business
100
AIS GLASS SOLUTIONS LTD.
ix. According to the information and explanation xvii. The Company has not raised any funds on short-
given to us, the Company has been regular in term basis and therefore Clause xvii of the order
depositing undisputed statutory dues, including is not applicable.
Provident Fund, Employees’ State Insurance,
Income tax, Sales tax, Wealth tax, Custom Duty xviii. The Company has made preferential allotment
and other material statutory dues applicable to it of shares during the year to parties covered in
with the appropriate authorities during the year. the Register maintained under section 301 and
as per information and explanation given to us
x. The Company was incorporated on July 19, 2004 such allotment of shares is not prejudicial to the
and has not yet completed five years from the interest of the Company.
date of registration and hence Clause (x) of the
order is not yet applicable to the Company. xix. The Company has not issued any debentures
during the year.
xi. The Company has not made any borrowings from
any banks or financial institutions or by way of xx. The Company has not raised money by way of
debentures. public issue during the year.
xii. As per information and explanations given to xxi. During the course of our examination of the books
us, the Company has not granted any loans and of account carried out in accordance with the
advances on the basis of security by way of pledge generally accepted auditing practices in India,
of shares, debentures and other securities. we have not come across any instance of fraud
on or by the Company nor have we been informed
xiii. In our opinion, the Company is neither a nidhi/ by the management of any such instance being
mutual benefit fund/society hence Clauses xiii of noticed or reported during the year.
the order is not applicable to the Company.
xiv. In our opinion, the Company is not dealing in or
trading in shares, securities, debentures and
other investments and hence Clause xiv of the
order is not applicable to the Company.
xv. As per information and explanations given to
us, the Company has not given any guarantees
for loans taken by others from banks or financial For Jand & Associates
institution. Chartered Accountants
xvi. The Company has not taken any term loan (Pawan Jand)
and therefore Clause xvi of the order is not Place : New Delhi Prop.
applicable. Dated : 8th May, 2006 M.No. 80-501
101
AIS GLASS SOLUTIONS LTD.
Balance Sheet
Rs.
Schedule As At 31st March, 2006 As At 31st March, 2005
SOURCES OF FUNDS
1. Shareholders’ Funds
a) Share Capital 1 38,000,000 25,500,000
38,000,000 25,500,000
2. Share Application Money - 3,321,089
Total 38,000,000 28,821,089
APPLICATION OF FUNDS
1. Fixed Assets 2
a) Gross Block 9,220,078 6,101,706
b) Less : Depreciation / Amortisation 2,329,032 555,573
c) Net Block 6,891,046 6,891,046 5,546,133 5,546,133
2. Investments 3 17,500,000
3. Current Assets, Loans and Advances 4 -
a) Inventories - 951,326
b) Sundry Debtors 26,979,986 10,717
c) Cash and Bank Balances 11,408,179 4,152,023
d) Loans and Advance 5,702,785 8,126,385
44,090,950 13,240,451
Less:Current Liabilities and Provisions 5
a) Current Liabilities 46,885,762 2,300,949
b) Provisions 450,000
47,335,762 2,300,949
Net Current Assets (3,244,812) 10,939,502
4. Miscellaneous Expenditure 6
(to the extent not written off or adjusted) 649,394 865,859
5. Profit and Loss Account 16,204,372 11,469,595
TOTAL 38,000,000 28,821,089
Notes to the Accounts 12
As per our report of even date On behalf of the Board of Directors
For Jand & Associates,
Chartered Accountants
(Pawan Jand) Sanjay Labroo Kunwar Narayan Anil Chhatwal Kumudini
Prop. Director Director Head - Accounts Company Secretary
M.No. 80-501
Place : New Delhi
Dated : 8th May, 2006
102
AIS GLASS SOLUTIONS LTD.
Profit & Loss Account
Rs.
Schedule Year ended Period 19th July, 2004 to
31st March, 2006 31st March, 2005
INCOME
Turnover 7 120,113,087 10,664
Other Income 8 4,377,386 -
124,490,473 10,664
EXPENDITURE
Materials 9 83,704,317 9,978
Personnel 10 11,114,754 4,225,182
Selling, Marketing & Administration Expenses 11 31,962.173 6,473,061
Preliminary Expenses Written Off 6 216,465 216,465
Depreciation / Amortisation 2 1,777,541 555,573
128,775,250 11,480,259
Profit/(Loss) Before Tax (4,284,777) (11,469,595)
Less: Provision for Fringe Benefit Tax 450,000 -
Profit/(Loss) After Tax (4,734,777) (11,469,595)
Profit/(Loss) Brought Forward (11,469,595) -
Loss Carried to Balance Sheet (16,204,372) (11,469,595)
Basic/Diluted EPS ( Note 5 to Notes to Accounts) (1.52) (10.99)
Notes to the Accounts 12
As per our report of even date On behalf of the Board of Directors
For Jand & Associates,
Chartered Accountants
(Pawan Jand) Sanjay Labroo Kunwar Narayan Anil Chhatwal Kumudini
Prop. Director Director Head - Accounts Company Secretary
M.No. 80-501
Place : New Delhi
Dated : 8th May, 2006
103
AIS GLASS SOLUTIONS LTD.
Schedules to the Accounts
Rs.
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 1 : SHARE CAPITAL
Note :
Out of the above 2960000 (Previous Year 2549940) equity shares are held by Asahi India Glass Limited, the holding
company.
SCHEDULE 2 : FIXED ASSETS
DESCRIPTION GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK
DEDUCTIONS AS AT AS AT FOR THE ON AS AT AS AT AS AT
AS AT ADDITION
31ST MARCH 1ST APRIL 31ST MARCH 31ST MARCH 31ST MARCH
1ST APRIL 2005 2006 2005 YEAR DEDUCTION 2006 2006 2005
TANGIBLE ASSETS
Buildings (On Lease) 833,740 - - 833,740 95,661 209,510 - 305,171 528,569 738,079
Office Equipments 864,063 403,562 - 1,267,625 71,301 128,906 - 200,207 1,067,418 792,762
Computers 1,473,599 1,025,520 13,800 2,485,319 254,228 683,949 4,082 934,095 1,551,224 1,219,371
Electrical Installations 288,881 - - 288,881 13,394 38,320 - 51,714 237,167 275,487
& Fitting
2,097,281 103,017 - 2,200,298 101,400 377,584 - 478,984 1,721,314 1,995,881
Furniture & Fixtures
5,557,564 1,532,099 13,800 7,075,863 535,984 1,438,269 4,082 1,970,171 5,105,692 5,021,580
INTANGIBLE ASSETS
Computer Software 315,591 1,502,269 - 1,817,860 15,780 280,378 - 296,158 1,521,701 299,811
Product Designs 228,552 97,803 - 326,355 3,809 58,894 - 62,703 263,652 224,743
544,143 1,600,072 - 2,144,215 19,589 339,272 - 358,861 1,785,354 524,553
Total Current Year 6,101,706 3,132,171 13,800 9,220,078 555,573 1,777,541 4,082 2,329,032 6,891,046 5,546,133
Total Previous Year 6,101,706 - 6,101,706 555,573 - 555,573 5,546,133 -
104
AIS GLASS SOLUTIONS LTD.
Rs.
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 3 : INVESTMENTS
1308450.721 (Previous Year NIL) Units of HDFC
Liquid Fund - Growth. 17,500,000 -
17,500,000 -
NOTE: Market Value of the Investments Rs. 1,81,62,604/- (Previous Year NIL)
SCHEDULE 4 : CURRENT ASSETS, LOANS AND ADVANCES
CURRENT ASSETS
Inventories (As taken, valued and
certified by Management)
Stock in trade - 38,220
Stores - 913,106
- 951,326
Sundry Debtors
(Unsecured Considered Good)
Over six months 199,247 -
Others 26,780,739 10,717
26,979,986 10,717
Cash and Bank Balances
Cash on Hand 54,160 15,158
Balances with Scheduled Banks
-on Current Account 11,354,019 4,136,865
11,408,179 4,152,023
LOANS AND ADVANCES
(Unsecured considered good)
Advances recoverable in cash or in kind
or for value to be received 3,392,283 6,453,125
Security Deposits 1,677,010 1,673,260
Advance Taxes:
Fringe Benefit Tax 396,199 -
Tax Deducted at Sources 237,293 -
5,702,785 8,126,385
SCHEDULE 5 : CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Sundry creditors
Due to Small Scale Industrial Undertakings * -
Others 23,463,172 875,914
Deposits from Customers 15,350,000 -
Advance from Customers 4,505,172 -
Other Liabilities 3,567,418 1,425,035
46,885,762 2,300,949
Provisions
Provision for Fringe Benefit Tax 450,000 -
47,335,762 2,300,949
* As per the information available with the Company
SCHEDULE 6 : MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
Preliminary Expenses 865,859 1,082,324
Less: Written off during the Period 216,465 216,465
649,394 865,859
105
AIS GLASS SOLUTIONS LTD.
Rs.
As At 31st March, 2006 As At 31st March, 2005
SCHEDULE 7 : TURNOVER
Sale of Architectural Glass 120,113,087 10,664
120,113,087 10,664
SCHEDULE 8 : OTHER INCOME
Commission 3,826,386 -
Other Income 551,000 -
4,377,386 -
SCHEDULE 9 : MATERIALS
Opening Stock 38,220
Add: Purchases 83,666,097 48,198
Less: Closing Stock - 38,220
83,704,317 9,978
SCHEDULE 10 : PERSONNEL
Salaries 9,916,932 2,748,676
Contribution to Provident 327,355 267,742
Staff Welfare Expense 309,893 113,201
Recruitment Expense 240,404 221,443
Training Expense 320,170 874,120
11,114,754 4,225,182
SCHEDULE 11 : SELLING, MARKETING AND ADMINISTRATION
Packing & Forwarding(Net) 8,095,338 -
Advertisement & Marketing Expenses 9,462,693 839,705
Meets & Exhibitions 586,793 764,778
Market Training Programmes 318,338 122,495
Book & Periodicals 207,459 382,999
Travelling and Conveyance 4,227,525 1,051,495
Rent 1,645,912 665,652
Rates & Taxes 22,307 26,700
Legal & Professional Fees 1,262,520 1,036,261
Interest on Deposits from Customers 796,289 -
Repair & Maintenance:
Buildings 1,450,030 685,348
Plant & Machinery 251,256 62,814
Others 882,424 295,135
Office Supply & Stationery 548,558 199,980
Telephone & Communication 1,798,395 329,548
Donation 193,011 -
Insurance 118,467 -
Miscellaneous Expenses 59,809 10,151
Bad Debts 30,731 -
Loss on Sale of Fixed Asset 4,318 -
31,962,173 6,473,061
106
AIS GLASS SOLUTIONS LTD.
SCHEDULE 12: NOTES TO ACCOUNTS
1. Background
The main business of the Company is to trade and provide services relating to different kinds of architectural glasses includ-
ing toughened glass, laminated glass, insulated glass and glass products.
The accompanying accounts reflect the results of the activities undertaken by the Company during the year ended on 31st
March 2006.
2. Significant Accounting Policies:
a) Accounting Convention
The financial statements are prepared under the historical cost convention, on accrual basis, in accordance with the gen-
erally accepted accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants
of India and the provisions of the Companies Act, 1956.
b) Fixed Assets
Both tangible and intangible are stated at cost of acquisition or construction, less accumulated depreciation. Cost in-
cludes all expenses related to acquisition and installation of the concerned assets. Building on lease comprise of cost
of additions and allocations carried out as well as brokerage paid for taking the same on lease.
c) Inventories
Inventories are valued at lower of cost or net realizable value. Cost for this purpose is determined on FIFO basis.
d) Investments
Investments are stated at the cost price.
e) Revenue Recognition
Sales are recognized as soon as goods are dispatched and are recorded net of returns, trade discounts, trade taxes
etc.
f) Material Cost
Cost of material is determined by adding opening stock to purchases and reducing therefrom the closing stock.
g) Foreign Exchange Transactions
Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the transactions.
h) Retirement Benefit
Company’s contribution to Provident Fund is charged to the Profit & Loss Account. Gratuity & Superannuation liabilities
are provided as per contract with the respective employees.
i) Depreciation
Tangible Assets
Depreciation on tangible asset except those on lease is provided on the Written Down Value at the rates specified in
Schedule XIV to the Companies Act, 1956.
Intangible Assets
Intangible asset are amortized over a period of five years on a pro-rata basis.
Leasehold Assets
Leasehold assets are depreciated over the period of lease.
107
AIS GLASS SOLUTIONS LTD.
j) Taxes on Income
Current Tax is the amount of tax payable on the taxable income for the year determined in accordance with the provi-
sions of the Income Tax Act, 1961.
Deferred Tax is recognized on timing differences; being the differences between the taxable incomes and accounting
income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Assets
subject to the consideration of prudence are recognized and carried forward only to the extent that there is a reasonable
certainty that sufficient future taxable income will be available against which such Deferred Tax Asset can be realized.
The tax effect is calculated on the accumulated timing difference at the year end based on the tax rates and laws
enacted or substantially enacted on the Balance Sheet date.
The Company does not recognize Deferred Tax Assets on the consideration of prudence and conservative principal of
accounting.
k) Preliminary Expenses
Preliminary Expenses are amortized over a period of five years.
l) Segment Reporting
The Company trades only in one business segment i.e. architectural glass and has made sale only in one geographical
area i.e. India. Therefore AS-17 on Segmental Reporting is not applicable to the Company.
3. Notes to Accounts:
1. Contingent Liabilities:NIL
2. Capital Commitments: NIL
3. Auditors Remunerations
As at As at
31-03-2006 31-03-2005
- as auditor Rs. 5,00,000/- Rs. 60,000/-
- as management advisor Rs. 75,000/- Rs. 42,000/-
- service tax Rs. 70,380/- Rs. 11,120/-
4. Related Party disclosures
List of Related Parties:
i. Enterprise having control over reporting enterprise: Asahi India Glass Limited.
ii. Key Management Personnel: Mr. Sanjay Labroo, Mr. Arvind Singh, Mr. Kunwar Narayan and Mr. P.L. Safaya (All
are Directors)
Transaction with Related Parties:
Nature of Transactions Enterprise having control Key Management Personnel
over reporting enterprise
31-03-06 31-03-05 31-03-06 31-03-05
Purchase of material for sale:
Asahi India Glass Limited 83666097 -- -- --
Purchase of material for Advertisement:
Asahi India Glass Limited 849535 -- -- --
Packing Cost paid:
Asahi India Glass Limited 3939828 -- -- --
Commission Received:
Asahi India Glass Limited 3826386 -- -- --
Equity Contribution:
Asahi India Glass Limited 778911 25499400 -- --
Mr. Sanjay Labroo -- -- 1640000 100
Mr. Kunwar Narayan -- -- 1999990 100
Mr. Arvind Singh -- -- 300000 100
Mr. P. L. Safaya -- -- 250000 --
Share Application Money:
Asahi India Glass Limited -- 3321089* -- --
* Against these equity shares were issued during the year.
108
AIS GLASS SOLUTIONS LTD.
5. Earning per Share
Particulars 31-03-2006 31-03-2005
Net Profit (Loss) available for equity Rs.(47,30,459/-) Rs.(1,14,69,595/-)
shareholders
Number of Weighted Average number of 3103808 1044094
shares
Basic/Diluted Earning Per Share Rs.(1.52) Rs. (10.99)
6. Impairment of Assets
The Company does not identify impairment of assets as the carrying amount of the assets does not exceed the recoverable
value as on 31-03-2006.
7. Additional Information as required by Part II of Schedule VI of the Companies Act, 1956:
1. Purchases, Sales, Opening Stock and Closing Stock of Architectural Glass
(Qty in Sqm.) (Amount in Rs.)
Year Sale Purchase Opening Stock Closing Stock
Qty Amount Qty Amount Qty Amount Qty Amount
31-03-2006 79897 120113087 82907 83666097 28 38320 NIL NIL
31-03-2005 5 10664 33 48198 NIL NIL 28 38320
2. CIF Value of Import:
Particulars 31-03-2006 31-03-2005
Capital Goods - Software NIL Rs. 29,581/-
3. Expenditure in Foreign Currency:
Particulars 31-03-2006 31-03-2005
Books NIL Rs. 51,367/-
Software NIL Rs. 29,581/-
Travel Rs. 97,577/- Rs. 1,13,252/-
Training Fee Rs. 60,000/- NIL
Donation Rs.1,72,728/- NIL
4. Earning in Foreign Currency: NIL
8. In the absence of profits no provision for the income tax has been made. The Company has no Deferred Tax Liability and on
the consideration of prudence and conservative principle of accounting company has decided not to recognize the Deferred
Tax Asset.
9. In the opinion of the Board, all the current assets, loans and advances have a value on realization in the ordinary course of
business atleast equal to the amount at which they are stated in the balance sheet.
10. Sundry Debtors, some of the Current Liabilities and Advances are subject to confirmation/reconciliation.
11. Previous year’s figures have been regrouped/rearranged, wherever found necessary to make them comparable with those
of the current year.
As per our report of even date On behalf of the Board of Directors
For Jand & Associates,
Chartered Accountants
(Pawan Jand) Sanjay Labroo Kunwar Narayan Anil Chhatwal Kumudini
Prop. Director Director Head - Accounts Company Secretary
M.No. 80-501
Place : New Delhi
Dated : 8th May, 2006
109
AIS GLASS SOLUTIONS LTD.
CASH FLOW STATEMENT
CASH FLOW STATEMENTS FOR THE YEAR ENDED MARCH 31, 2006 Rs.
This year Previous year
A) CASH FLOW FROM OPERATING ACTIVITIES
Net Profit(Loss) before tax and extraordinary items (4,284,777) (11,469,595)
Adjustments for:
Depreciation and Amortisation of Assets 1,777,541 555,573
Deferred revenue expenditure written off 216,465 216,465
Operating Profit(Loss) before working capital changes (2,290,772) (10,697,557)
Adjustments for:
Trade and Other Receivables (24,545,669) (8,137,102)
Inventories 951,326 (951,326)
Trade Payables 44,584,813 2,300,949
Cash Generated from Operations 18,699,699 (17,485,036)
Increase in deferred revenue expenditure - (1,082,324)
Cash Flow before Extraordinary/Prior Period Items 18,699,699 (18,567,360)
Loss on Sale of Fixed Asset 4,318 -
Net Cash Flow from Operating Activities 18,704,017 (18,567,360)
B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets, including capital work in progress (3,126,771) (6,101,706)
Purchase of Investments (17,500,000) -
(20,626,771) - (6,101,706)
Net Cash Flow from Investing Activities
C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of Equity Shares 9,178,911 25,500,000
Share Application Money - 3,321,089
Net Cash Used in Financing Activities 9,178,911 28,821,089
Net Increase/(Decrease) in Cash & Cash Equivalent(A+B+C) 7,256,156 4,152,023
Cash & Cash Equivalent - Opening 4,152,023 -
Cash & Cash Equivalent - Closing 11,408,179 4,152,023
Notes:
1) The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Accounting Standard 3
(AS 3) on Cash Flow Statement issued by the Institute of Chartered Accountant of India.
2) Figures in brackets represent outflow.
As per our report of even date On behalf of the Board of Directors
For Jand & Associates,
Chartered Accountants
(Pawan Jand) Sanjay Labroo Kunwar Narayan Anil Chhatwal Kumudini
Prop. Director Director Head - Accounts Company Secretary
M.No. 80-501
Place : New Delhi
Dated : 8th May, 2006
110
AIS GLASS SOLUTIONS LTD.
BALANCE SHEET ABSTRACT AND COMPANY ‘ S GENERAL BUSINESS PROFILE
I. Registration Details
Registration No. 1 2 7 6 6 6 State Code 5 5
Balance Sheet Date 3 1 0 3 2 0 0 6
II. Capital Raised during the year (Amount in Rs.Lakhs)
Public Issue Right Issue
N I L N I L
Bonus Issue Private Placement
N I L 1 2 5 . 0 0
III. Position of Mobilisation & Deployment of Funds (Amt. in Rs.’Lakhs)
Total Liabilities Total Assets
3 8 0 . 0 0 3 8 0 . 0 0
Sources of Funds
Paid up Capital Reserves & Surplus
3 8 0 . 0 0 N I L
Share Application Money Unsecured Loans
N I L N I L
Application of Funds
Net Fixed Assets Investments
6 8 . 9 1 1 7 5 . 0 0
Net Current Assets Miscellaneous Expenditure
(-) 3 2 . 4 4 6 . 4 9
Accumulated Losses
1 6 2 . 0 4
IV. Performance of Company (Amount in Rs.Lakhs)
Turnover Total Expenditure
1 2 0 1 . 1 3 1 2 8 7 . 7 5
+/- Profit// (Loss) before tax + / - Profit/(Loss)after tax
- 4 2 . 8 4 - 4 7 . 3 4
Earning per Share (in Rs.) Dividend
(-) 1 . 5 2 N I L
V. Generic Names of Three Principal Products / Service of Company
Toughened Tempered Glass Ch. H. No. 7004-10
As per our report of even date On behalf of the Board of Directors
For Jand & Associates,
Chartered Accountants
(Pawan Jand) Sanjay Labroo Kunwar Narayan Anil Chhatwal Kumudini
Prop. Director Director Head - Accounts Company Secretary
M.No. 80-501
Place : New Delhi
Dated : 8th May, 2006
111
notesNT
www.asahiindia.com
www.aisglass.com