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Hindustan Organic Chemicals Ltd.

BSE: 500449 | NSE: HOCL | Series: NA | ISIN: INE048A01011 | SECTOR: Chemicals

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Jan 25, 16:00
34.65 0.65 (1.91%)
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AVERAGE VOLUME
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80,969
10-Day
100,646
30-Day
108,417
60,648
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    34.00

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    34.00

  • Bid Price (Qty.)

    35.50 (4079)

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    35.60 (12)

NSE Live

Aug 16, 15:48
19.90 0.00 (0.00%)
Volume
No Data Available
51,579
  • Prev. Close

    19.90

  • Open Price

    19.50

  • Bid Price (Qty.)

    19.90 (387)

  • Offer Price (Qty.)

    0.00 (0)

Hindustan Organic Chemicals is not traded on NSE in the last 30 days

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Auditor's Report

1 We have audited the attached Balance Sheet of Hindustan Organic Chemicals Limited as at 31st March 2008 the Profit and Loss Account and also the Cash Flow Statement of the Company for the year ended on that date annexed thereto, in which is incorporated the Balance Sheet, Profit and Loss Account and Cash Flow Statement of the Branch audited by other auditors appointed by the Central Government. In preparing this Report, we have considered the report on the accounts of the branch, audited by the Branch Auditors together with the particulars and information relating thereto, furnished to us by the management. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion of these financial statements based on our audit. 2 We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3 As required by the Companies (Auditors Report) Order 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1958, we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order. 4 Further to our comments in the annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; ii. In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books of the Company. iii. The Balance Sheet, Profit Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account of the Company. iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flaw Statement dealt with by this report, comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956. v. As per Notification No GSR 829(E) dated 21.10.2003, provisions of section 274 (1) (g) of the Companies Act, 1956 regarding disqualification of the directors are not applicable to the Company being Government Company. vi. Reference is invited to the following Notes on Accounts in Part B of Schedule 22 with regard to non-provision / pending charge to the Profit and Loss Account: a. Note No. 2(c) regarding penal interest of Rs. 80.52 Lacs on overdue loan from Government of India, b. Note No. 8(a) regarding liabilities of wages revision for the period 01.01.1997 to 31.12.2000 Rs. 2308.08 Lacs, c. Note No. 18(1)(a)(iv) regarding Claims of JNPT which include minimum guaranteed throughput charges of Rs. 1012.50 Lacs payable to JNPT authorities. d. Note No. 5 regarding short provision for obsolete / non-moving stock of Rs. 129.14 Lacs. vii. Reference is also invited to the following Notes on Accounts in Part B of Schedule 22 with regard to pending accounting treatment, the precise impact of which on the Balance Sheet and the Profit and Loss Account could not be ascertained for the reasons stated therein: (a) Note No.1 (b) and 2(a) regarding non-provision of interest on overdue principal amount of fixed deposits. The above amount is not ascertained and thus we are unable to quantify the impact of the same on the Profit for the year. (b) Note No. 17 regarding pending confirmations and reconciliation of balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other debit / credit balances. (c) Note No. 6(d) regarding misappropriation of Companys fund to the tune of Rs. 64.81 Lacs, pending final report from CBI and outcome of the civil suit. (d) Note No. 8(b) regarding non provision for additional liability in respect of Kochi Unit that will arise out of wage settlement / salary revision. viii. In respect of suspected fraud in import of cumene during 2002-2003 at Kochi unit, three officers of the Company were suspended and pending the final report from CBI, the impact, if any, on the accounts of the Company could not be quantified. ix. We further report that effect of items mentioned at 4(vii) and 4(viii) above could not be determined and had the provision been made for the items referred in Para 4(vi) above, Profit for the year would have been lower by Rs. 3530.24 Lacs resulting in a Loss of Rs. 2168.79 and Accumulated Loss as at the year end would be higher by the same amount. Further, the Current Liabilities would have been higher by Rs. 3530.24 Lacs. x. Subject to our comments in Para 4(ix) above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes on accounts appearing in Schedule 22, give a true and fair view in conformity with accounting principles generally accepted in India: i. in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2008; ii. in the case of Profit and Loss Account, of the profit for the year ended on that date; and iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of the Auditors Report to the members of Hindustan Organic Chemicals Limited on the accounts for the year ended on 31st March 2008) i. (a) The Kochi unit has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The records at Rasayani unit are not complete with regard to identification of the assets and exact location of the assets. (b) According to the information and explanations given to us the physical verification of major items of fixed assets was carried out during the year at Kochi unit and no material discrepancies were noticed on such verification. However, records in respect of the same were not made available for verification. As informed, at Rasayani Unit, no physical verification has been carried out during the year except for the Guest House. In our opinion, having regard to the size of the unit and the nature of its business the physical verification of fixed assets at Rasayani unit needs to be carried out every year. (c) During the year the Company has not disposed off substantial part of its fixed assets, which has effect on the Company as a going concern. ii. (a) The management has carried out physical verification of inventories at reasonable intervals during the year. (b) In our opinion the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. However, in respect of inventory in storage Tanks, the Kochi unit does not have the system of taking dip measurements. Instead, reliance is placed on the electronic readings reported by the Distribution Control System. (c) The Company is maintaining proper records of inventory. Discrepancies noticed on such physical verification were not material. As informed to us, the same were properly dealt with in the books of account. iii. (a) As informed to us, the Company has neither granted nor taken any loans secured or unsecured to / from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 as such provisions of the clause 4 (iii) is not applicable. iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system for the purchase of inventories and fixed assets and for the sale of goods and services commensurate with the size of the Company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system. v. According to the information and explanations given to us, there were no transactions that needed to (should) have been entered into the register maintained under section 301 of the Companies Act, 1956. vi. In our opinion and according to the information and explanation given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, to the extent applicable except rule 3A of the Companies (Acceptance of Deposits) Rules, 1975 regarding investment in liquid assets. We have been informed by the management that no order has been received by the Company, from Company Law Board, National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal under section 58A and 58AA. vii. The Company has appointed firms of Chartered Accountants for conducting internal audit. In our opinion the internal audit system of the Company is inadequate commensurate with the size of the Company and nature of its business. The Company does not have an effective system of follow up action based on the points raised by the Internal Audit. The scope of the internal audit of the company needs to be enlarged and the system of internal audit needs to be suitably strengthened. viii. We have broadly reviewed the books of account maintained by the Company in pursuance to the rules made by the Central Government for the maintenance of the cost records under section 209(1) (d) of the Companies Act, 1956 for certain products of the Company and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of records with a view to determine whether they are accurate or complete. ix. (a) The Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, Cess and other statutory dues wherever applicable with the appropriate authorities. However, a general delay in depositing TDS dues of the Company with appropriate authorities is observed on which penal interest has also been paid. According to the information and explanations given to us, no undisputed amount payable in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty, Cess and other statutory dues were in arrears as at 31st March 2008 for a period of more than six months from the date they became payable. According to the records of the Company, details of outstanding dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and Cess which have not been deposited on account of disputes are given below: Sl. No Name of Statue Nature of Dues Rasayani Unit 1 Customs Act Customs Duty 1 Central Excise Act Molten Sulphur Classification 2 Central Excise Act Molten Sulphur Classification 3 Central Excise Act Shortage of Inputs 4 Central Excise Act Wrong availment of CENVAT 5 Central Excise Act Reversal of CENVAT Credit availed on Inputs lost in Flood Kochi Unit 1 Central Sales Tax Act Differential Sales Tax on account of disallowance of discount and non submission of statutory forms etc. 2 Central Sales Tax Act Differential Sales Tax on account of non submission of statutory forms etc. 3 Central Sales Tax Act Differential Sales Tax on account of non submission of statutory forms etc. 4 Central Sales Tax Act Differential Sales Tax on account of non submission of statutory forms etc. 5 Central Sales Tax Act Interest 6 Central Sales Tax Act Differential Sales Tax on account of non submission of statutory forms and Interest 7 Central Sales Tax Act Differential Sales Tax on account of non submission of statutory forms and Interest 8 Kerala General Sales Tax Act Differential Sales Tax on account of non submission of statutory forms etc. 9 Kerala General Sales Tax Act Tax payable on second sale of scrap items 10 Kerala General Sales Tax Act Tax payable on second sale of scrap items 11 Kerala General Sales Tax Act Interest 12 Kerala General Sales Tax Act Differential Sales Tax on account of non submission of statutory forms and Interest 13 Kerala General Sales Tax Act 8% KGST demanded for water purchased from KWA 14 Kerala General Sales Tax Act Differential Sales Tax on account of non submission of statutory forms and levy of purchase tax on Water 15 Central Sales Tax Act Differential Sales Tax on account of non submission of statutory forms and Interest 16 Kerala Value Added Tax Act Disallowance of discount levy of purchase tax on water and excess reversal of input tax on stock transfer 17 Central Excise Act Disallowance of CENVAT Credit Period to Amount Forum where which disputes of Dispute Dispute relates (Rs. In lacs) is pending NA 10.80 Customs, Excise and Service Tax Appellate Tribunal Total 10.80 1994-95 15.53 Customs Excise and Service Tax Appellate Tribunal 1999-00 7.62 Commissionerate 2002-03 6.82 Commissionerate 2003-04 2.50 Customs Excise and Service Tax Appellate Tribunal 2006-07 18.66 Commissionerate Total 51.13 1988-89 9.94 Deputy Commissioner (Appeals) 1989-90 44.74 Sales Tax Appellate Tribunal 1990-91 10.85 Assistant Commissioner 1994-95 0.55 Assistant Commissioner 1995-96 7.61 Sales Tax Appellate Tribunal 1997-98 3.56 Deputy Commissioner 1992-93 8.27 Deputy Commissioner 1990-91 2.86 Assistant Commissioner 1992-93 19.44 Deputy Commissioner 1993-94 17.36 Deputy Commissioner 1996-97 2.60 Assistant Commissioner 1997-98 6.99 Deputy Commissioner (Commercial Taxes) 2000-01 3.84 Deputy Commissioner (Appeals) 2001-02 1.43 Deputy Commissioner 2001-02 18.74 Assistant Commissioner 2005-06 59.10 Deputy Commissioner Total 217.88 2004-05 52.15 Customs Excise and Service Tax Appellate Tribunal Total 52.15 x. During the year, the Company has not incurred cash losses nor has it incurred cash losses during the immediately preceding financial year. The net worth of the Company is positive as at the year end pursuant to allotment of 8% non cumulative preference shares to Government of India amounting to Rs. 270 Crores. The Company has been discharged from the purview of the Sick Industrial Companies (Special Provisions) Act, 1985 on 26th May 2008. xi. The company has defaulted in repayment of dues to bondholders, the details of which are given below: Bond Series Amount of Default (Rs. In Lacs) Bond Series - I 131.25 Bond Series - IX 50.00 xii. Based on our examination of records and the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities. xiii. The company is not a chit fund or a nidhi, mutual benefit fund / society, therefore the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order 2003 are not applicable to the Company. xiv. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provisions of clause 4 (xiv) of the Order are not applicable to the Company. xv. The Company has given a guarantee of Rs. 345.00 Lacs to State Bank of Hyderabad on behalf of Hindustan Fluorocarbons Limited, a subsidiary company. In our opinion, the terms and conditions of the said guarantee are prima facie, not prejudicial to the interest of the Company. xvi. The Company has not availed any term loans. Hence provisions of clause 4 (xvi) of the Companies (Auditors Report) Order 2003, are not applicable to the Company. xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on short-term basis have been used for long-term investment. xviii. The company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956. xix. The Company has raised Rs. 100 Crores by way of issuing Bonds during the year, in respect of which Security is created. However, in respect of following bonds issued in earlier years, for which the company has not created securities: Particulars of Bonds Series Maturity Principal Date Outstanding as on 31st March 2008 (Rs. In Lacs) 13.50% taxable Secured bonds IX 30.06.2005 50.00 xx. The Company has not raised any funds by way of public issue during the year. xxi. Based upon the audit procedure performed for the purpose of reporting the true and fair view of the financial statement and as per the information and explanations given by the management we report that no fraud is noticed or reported by the Company during the year. For L. S. NALWAYA & Co. Chartered Accountants Sd/- AASHISH NALWAYA Partner Membership No. 110922 Mumbai, the 28th June 2008