you are here:

Hindustan Organic Chemicals Ltd.

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

BSE Live

Dec 02, 16:00
32.65 -0.40 (-1.21%)
Volume
AVERAGE VOLUME
5-Day
42,685
10-Day
49,018
30-Day
72,427
46,205
  • Prev. Close

    33.05

  • Open Price

    33.60

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

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

Director’s Report

The Board of Directors presents herewith the 57th Annual Report of your Company along with the Auditors statement of Accounts for the financial year 2017-18.

A. FINANCIAL RESULTS

The financial results for the year ended 31.03.2018 with the comparative figures of Company’s operations for the previous year is as under:

(Rs. In Lakhs)

Particulars

2017-18

2016-17

Revenue from operations

24232.94

14330.51

Other Income

6630.47

627.59

Total

30863.41

14958.10

Expenditure

50129.82

39255.36

Profit before Depreciation & Tax

(-)19266.41

(-)24297.26

Less Depreciation

680.54

1260.20

Profit /(Loss) before Exceptional Items and Tax

(-)19946.95

(-)25557.46

Less : Exceptional Items

-

-

Less : Provision of Tax (1) Current Tax

-

-

(2) Deferred Tax

-

-

Profit/(Loss) for the Period

(-)19946.95

(-)25557.46

Other Comprehensive Income :

(i). Items that will not be classified to Profit or Loss

12478.07

-

a). Revaluation of Plant , Property & Equipment’s

(2793.25)

357.33

Less : Deferred Tax Assets

873.02

-

b). Changes in defined benefit plan

Other Comprehensive Income for the year, Net of Tax

10557.84

357.33

Total Other Comprehensive Income for the year

(9389.11)

(25200.13)

B. DIVIDEND

In view of the continuous losses during the current year as well as in the previous years, the Board of Directors do not recommend any Dividend for the current year under review.

C. CHANGE IN NATURE OF BUSINESS IF ANY

As per the approval of Government of India, the operation of the all the plants at Rasayani Unit (except C NA / N204 plant along with the manpower transferred to ISRO) has been closed. In Kochi Unit, two plants (Phenol and Hydrogen plant) is operational.

Further Government has approved sale of 442 acre of land at Rasayani to BPCL for Rs.618.80 crore. Out of the 442 acre, sale of 251 acre has been completed for which an amount of Rs.351.40 crore has been received from BPCL and in addition, a bridge loan of Rs.360.26 crore has been received from GoI, which has been utilized to clear liabilities partially and for implementation of VRS to the employees of the Rasayani unit of the company.

D. FINANCIAL HIGHLIGHTS

During the year 2017-18 the Company registered an impressive growth of 106 % under Revenue .The Gross income of the Company stood at Rs.308.63 crore as against Rs.149.58 crore achieved during the previous year. The Loss before Tax for the year 2017-18 was (-) Rs.199.47 crore as against (-) Rs.255.57 crore incurred during the corresponding period of last year.

E. NUMBER OF MEETINGS OF BOARD (including the dates of Board and committee meetings indicating the number of meetings attended by each director in every financial year)

During the year the Board Meetings were held on the following dates:

29th May 2017, 19th July 2017, 26th July 2017, 12th September 2017, 11th December 2017, 9th February 2018 and 16th March 2018.

OTHER DETAILS ARE FURNISHED IN THE Corporate Governance Report in Annexure VI to this Report.

F. MANNER IN WHICH FORMAL ANNUAL EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS HAS BEEN CARRIED OUT :

HOCL being CPSU governed by the DPE Guidelines the Annual Evaluation of Performance of Board, its committees and of individual Directors have been carried out by the Administrative Ministry (DCPC).

G. However, as the appointment of adequate number (2/3) of independent directors on Company’s Board was taken place only during Feb., 2017 resulting in reconstitution of the Board committee/s only in March, 2017 (and thereafter), Board Committees’ evaluation during the year did not arise.

H. DETAILS OF DIRECTORS AND/OR KMP’S WHO HAVE BEEN APPOINTED OR RESIGNED DURING THE YEAR

None

I. COMPOSITION OF AC AND NON ACCEPTANCE OF ANY RECOMMENDATIONS OF AC

(only for public and listed companies)

The Audit Committee has been reconstituted during the year; - No such cases.

J. DIRECTOR’S RESPONSIBILITY STATEMENT

Your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013 -

a. That in the preparation of the annual accounts for the year ended 31st March, 2018; the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. That such accounting policies as mentioned in the Notes of Accounts had been applied consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the financial year ended 31st March, 2018 and the profit or loss of the Company for that period.

c. That proper and sufficient care had been taken 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.

d. That the annual accounts for the year ended 31st March, 2018 had been prepared on a going concern basis.

e. That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

K. INDEPENDENT DIRECTORS DECLARATION - submitted on appointment.

L. DISCLOSURE ON REAPPOINTMENT OF INDEPENDENT DIRECTORS -not applicable.

M. COMPANIES POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF DIRECTORS ETC.

Company being a CPSE and appointment of all the Directors on the Board of the Company are made by the Govt. of India/President of India and under the supervision, control and directors of the DC&PC; the prescribed DPE Guidelines are being followed. The Terms and Conditions of appointment of Independent and other directors as disclosed in the Company’s website are given in Annexure to this Report.

N. RATIO OF DIRECTORS REMUNERATION TO MEDIAN EMPLOYEES REMUNERATION AND OTHER PRESCRIBED ELABORATE DISCLOSURES AND DETAILS :

Company being a CPSE which is under the supervision, control and directors of the DC&PC, the prescribed DPE Guidelines are being followed in respect of employee’s remunerations and DPE Guidelines as well as CVC Guidelines are being followed, as regards other prescribed perquisites

O. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There are no loans, Guarantees, or investments made by the company under Section 186 of the Companies Act 2013 during the year under review and hence said provisions are not applicable.

However, the cumulative investment on the Subsidiary Company Hindustan Fluorocarbons ltd., 31.3.2018 stood at Rs.11.06 Crore. In addition, the company has given Secure Loan of Rs.35.10 Crores to HFL [on the security of HFL Land] and Company has also extended Corporate Guarantee to the working Capital loan to the subsidiary company HFL and investments made in HFL and HOC Chematur Ltd., during earlier years under section 186 of the Companies Act 2013, were shown in the financial statements.

P. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

- None

1. Details of Contracts or arrangement or transactions not at arm’s length basis:

a) Name(s) of related party and nature of relationship

b) Nature of Contracts/arrangements/transactions

c) Duration of contracts/arrangements/transactions

d) Salient terms of the contracts or arrangements or transactions including the including the value if any

e) Justification for entering into such contracts or arrangements or transactions date (s) of approval by the Board

f) Amount paid as advances, if any

g) Date on which a special resolution was passed in general meeting as required under first proviso to section 188

2. Details of material contracts or arrangements or transactions at arm’s length basis; : -None.

(a) Name(s) of related party and nature of relationship

b) Nature of contracts/arrangements/transactions

c) Duration of contracts/arrangements/transactions

d) Salient terms of the contracts or arrangements or transactions including the value, if any:

e) Date(s) of approval by the Board if any:

f) Amount paid as advance, if any:

Q. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND PRACTISING COMPANY SECRETARY IN THEIR REPORTS

There were no qualifications, reservations or adverse remarks made by the Auditors in their Audit report. The replies to the observations of the auditors are forming part of the Directors Report.

The Secretarial Auditors of the company have submitted their Secretarial Audit Report for the year 2017-18 and management replies to the audit observations thereof are annexed to the Directors’ Report and forming part of 57th Annual Report of the Company.

The observations of the auditors and notes to accounts are self - explanatory, and are forming part of the Directors’ Report.

R. AMOUNTS IF ANY WHICH IT PROPOSES TO CARRY TO RESERVES

None - In view of the accumulated losses and loss incurred during the year.

S. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEENT THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

The closure of all the non-viable plants at Rasayani Unit and transfer to the CNA/ N204 plant to ISRO as per the approval of the Government of India, GoI released bridge loan of Rs.360.26 crore and the matured Bonds have been paid off and all statutory liabilities has been cleared out of the bridge loan. Further out of 442 acre of land sale approved by GoI, 251 acre has been registered and received Rs.351.40 crore as consideration. The VRS has been implemented at Rasayani and all employees except the skeletal 15 and staff retained 8 have been relieved and their dues have been settled. The working capital loan availed from SBI and Canara Bank has been repaid.

T. The details in respect of adequacy of internal financial controls with reference to the Financial statements :

Company ensures existence of adequate internal controls through documented policy and procedures laid down in the manuals to be followed by the executives at various levels. Internal controls are supported by periodical internal audits and management reviews. The management is keen on these issues and initiated various measures such as upgrading the IT infrastructure, evaluating and implementing ERP software, web based application and establishing connectivity amongst manufacturing units and branch offices for effective and proactive services and businesses.

Board periodically reviews the internal controls, audit programme, financial results and recommendation of the replies of the management to Government Audit and internal audit etc.

U. CONSERVATION ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A) Conservation of energy : Nil

i. The steps taken or impact on conservation of energy : Nil

ii. The steps taken by the company for utilizing alternate sources of energy and : Nil

iii. The capital investment on energy conservation equipments : Nil

B) Technology Absorption : Nil

(i) the efforts made towards technology absorption : Nil

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution : Nil

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) : Nil

(a) the details of technology imported;

(b) the year of import;

(c) whether the technology been fully absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and

(iv) the expenditure incurred on Research and Development : Nil

V. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

Key Threats include :

o Competition from Imports and fluctuation in the input prices

o High input costs

o High utility costs

o High overheads

o Continued availability of anti-dumping support for the main products Phenol and Acetone.

o Acute working capital shortage affecting continuous operations

o High interest cost and employee remuneration.

Some risks and concerns :

o High manpower cost per ton of finished product.

o Depreciated plants, requiring high maintenance cost.

o Dumping in main products Phenol / Acetone.

o Volatility in main input Benzene.

W. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES WHICH HAVE BECOME OR CEASED TO BE:

HOC Chematur Ltd., a Joint Venture subsidiary abandoned due to non-achievement of the financial closure for the proposed MDI Project and Company has applied to for striking of the name under Early Exit scheme of MCA and ROC has approved the striking of the name of the Company and necessary Gazette notification is awaited.

X. DETAILS OF CSR POLICY AND ITS IMPLEMENTATION DURING THE YEAR

Company has recognized its social obligations and extends the following:

o On closure of Rasayani Unit, Company’s Library Books at Rasayani Unit Library were donated to Dr.Babasaheb Ambedkar Marathwada University, Aurangabad.

o As a part of social obligation the company is extending need based assistance to deserving students along with SC/ST students for their School / Graduate education.

o Vocational training facilities to the wards of employees of the company in the nearby Engineering / Management colleges for enhancing skill / knowledge.

o Engaging professional students of ICAI / ICSI who have completed intermediate level as trainees for imparting practical knowledge of company working by paying stipend.

Y. DISCLOSURES PRESCRIBED IN TERMS OF SECTION 67 (only for public and listed companies)- N.A.

Z. DEPOSITS : Nil

During the period under review, the Company has not invited or accepted any deposits either from the directors or from shareholders of the Company.

The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future: None

Under Sec.177(10) of Companies Act,2013:

VIGILANCE MECHANISM:

Hindustan Organic Chemicals Limited, being a Government Company, a Vigilance Department is already existing in pursuance of CVC Guidelines. And therefore, Vigilance Mechanism is being handled by the Vigilance Department and the Company has already adopted a Vigilance Manual in pursuance of CVC Guidelines. Vigilance Manual is available on Company’s Website.

Q. ACKNOWLEDGEMENT

Board places on record its gratitude to the members of the Company for their continued support and confidence in the management

For and on behalf of the Board of Directors of

Hindustan Organic Chemicals Limited

Sd/-

Date : 10-08-2018 S.B. Bhide

Place: CBD Belapur Chairman and Managing Director

Director’s Report