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Hindustan Organic Chemicals Ltd.

BSE: 500449 Sector: Industrials
NSE: HOCL ISIN Code: INE048A01011
BSE LIVE 19:40 | 19 Oct 18.80 0
(0.00%)
OPEN

19.50

HIGH

19.50

LOW

18.55

NSE 15:51 | 16 Aug Stock Is Not Traded.
OPEN 19.50
PREVIOUS CLOSE 18.80
VOLUME 14573
52-Week high 35.40
52-Week low 16.55
P/E
Mkt Cap.(Rs cr) 126
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 19.50
CLOSE 18.80
VOLUME 14573
52-Week high 35.40
52-Week low 16.55
P/E
Mkt Cap.(Rs cr) 126
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hindustan Organic Chemicals Ltd. (HOCL) - Chairman Speech

Company chairman speech

CHAIRMAN’S STATEMENT

Dear Shareholders

My Colleagues on the Board and I extend a warm welcome and sincere gratitude to allof you present here at this 55th Annual General Meeting of your Company. TheAudited Annual Accounts together with the Directors' Report and Auditors' Report of theCompany for the year 2015-16 and the AGM Notice to the Shareholders are in your hands forsome time and with your permission I take them as read.

PERFORMANCE:

I must now share with you in brief the status of our Company's performance during theyear 201516.

The production and sales figures are contained in the Directors' Report before you andhence not repeated.

Your Company continued to enjoy support from all its valuable customers during the year2015-16 due to quality assurances of its products manufactured at Kochi and Rasayani.During the year under review your Company could achieve sales valuing Rs. 109.15 Crores(net of excise duty).

The Company had however taken the best possible measures both in cost reduction as wellas in other areas. During the year the operations of the Company both at Kochi Unit andRasayani Unit continued to suffer due to non-availabilty of working capital. . The NoxBlower installed in Conc. Nitric Acid Plant was commissioned in January 2016 and thecompany could achieve record N204 Production and supply 446 MT to ISRO during 2015-16after restart of the Conc. Nitirc Acid Plant.

The company could operate the Phenol Plant at Kochi intermittently only in the firsthalf of 2015-16 and the Phenol Plant was shut down during second half year for want ofworking capital. However the Hydrogen Peroxide Plant is being operated continuously.

During the year your Company incurred a loss of Rs. 173.91 crore. .

I wish to inform you that with the consistent efforts put by the Management and withthe help and support from various Ministries including Ministry of Chemicals &Fertilizers Ministry of Finance Ministry of Commerce & Industries the companycontinues to get the benefit of the anti-dumping duty on Phenol and Acetone. It isexpected that with the above action and continued efforts on improved operations andmarketing the performance and profitability of the Company would further improve.

The marketing strategy was mainly focused on domestic customers to maximize the marketshare by adopting flexible marketing strategies which helped in encountering the threatposed by the importers and the domestic competitors as well.

FUTURE PLAN & REVIVAL / TURN AROUND PLAN:

Future course of Actions Rasayani Unit

With the working capital support from ISRO the Rasayani Unit could ensure continuousrunning of Nitric Acid plant (C.N.A) where N2O4 is produced for supplying to ISRO by theCompany. The company has plans to restart the Nitrobenzene plant and Formaldehyde plantsalong with the Nitric Acid Plant considering the synergy of operations depending on theavailability of working capital.

Kochi Unit

The company could successfully forge a tripartite agreement in the month of April 2016with BPCL and SBI whereby 70 % of the collections in the Company's CashCredit account is transferred to BPCL towards cost of raw materials supplies to Rasayaniand Kochi Units. The plant operations of Kochi and Rasayani units have since beenrestarted and the company could achieve a turnover of Rs.52.47 crore in the first quarterending June 2016.

BIFR and Revival Plan.

BIFR in the meeting held on 22nd July 2015 has declared the company as sickcompany under the provisions of Sick Industrial Companies (Special Provisions) Act 1986and directed the Operating Agency State Bank of India to submit a report on the revival orotherwise of the company in the next meeting. However subsequent meetings did not takeplace till the reconstitution of the Bench in May 2016. The company has submitted therevival proposal duly approved by the Board to the Ministry of Chemicals andPetrochemicals which is under consideration of the Government. In the meantime the companyhas approached BIFR for approval for the leasing of land at Rasayani to BPCL and CONCOR togenerate part of the funds as per the revival plan.

CORPORATE SOCIAL RESPONSIBILITY

Company since its inception is very much aware about its social responsibility. Forover five decades as a socially responsible and sensitive corporate your Companycontinues to remain committed to social thought and action to serve society throughproviding basic civic amenities to the neighboring villages rendering assistance indifferent forms. Company has also undertaken tree plantation programme in the surroundingarea.

As per Department of Public Enterprise (DPE) Guideline on Corporate SocialResponsibility (CSR) Company has constituted Board level Corporate Social Responsibility(CSR) and Sustainability Development (SD) Committee comprising of Independent Director& other two Directors from the Board of the Company. The terms of reference of thesaid CSR&SD Committee included among others the set-up of the Committee withexistence of the two tier organization structure with mandatory membership of anIndependent Director on the Board level committee frequency of meeting range ofdecision staff/ stakeholder involvement etc.

SAFETY HEALTH AND ENVIRONMENT :

In the areas of Health Hygiene and Environment the company has undertaken periodicmedical examination as well as statutory requirements of fitness check-up under form no.23 for its employees. In our commitment to environment we have ensured that the level ofpollutants from the factory and nearby surroundings was much below the permissible levels.

HOC Kochi unit received pollution control award among very large scale industries fromKerala State Pollution Control Board for substantial and sustained efforts in pollutioncontrol in 2012.

HOC Kochi unit received safety awards from Dept. of Factories & Boilers Govt. ofKerala for outstanding performance in industrial safety for the year 2012. No furtherawards received during the year 2015-16.

ISO CERTIFICATION :

HOCL Kochi unit is having ISO 9001: 2008 (Quality Management System) and ISO 14001:2004(Environmental Management System) certification. The existing certificate for ISO 9001& ISO 14001 is valid up to 2017.

INDUSTRIAL RELATIONS:

The overall Industrial Relation situation continues to be peaceful and cordial duringthe year. There was no strike or lockout during the year.

RESEARCH & DEVELOPMENT

After initial trial runs on pilot scale the 'In-house' developed vapour phasecontinuous process for ISRO's specific grade of Kerosene (Isrosene) was fine tuned. Thetechnology is now ready for implementation in HOC's available commercial plant. Thecompany is awaiting the tendering process from ISRO to further take up the implementation.

CORPORATE GOVERNANCE :

The Company has complied with the various requirement of Corporate Governance.

The details in this regard form part of this report in Annexure VI.

HINDUSTAN FLUOROCARBONS LIMITED (HFL) - SUBSIDIARY :

During the year HFL has made Net loss of Rs. 1111.39 lakhs from operations as againstthe net loss of Rs. 377.46 lakhs of the previous year. During the year the sales turnover(net) was Rs.3527.38 lakhs as against Rs. 2915.06 lakhs in the previous year. Theoperational loss during the year has reduced to Rs.629.38 lakhs as against Rs.738.10 lakhsduring the previous year During the year under report production of PTFE was 107 MetricTons as against 184 Metric Tons in the previous year. During the year 1116.00 Metric Tonsof CFM-22 was sold in the market against 726.58 Metric Tons in the previous year andbalance quantity was used as feed stock to manufacture various products including FluoroSpecialty Chemicals. Accordingly during the year Metric Tons of Tetra Fluoro Etylene(TFE) was used to manufacture Telomere. Quality of all company's products continued to bewell accepted by our customers. Company has achieved 96% capacity utilization as against88% in the previous financial year. In spite of better physical performance the lossduring the year is more compared to previous year. The loss during the previous year waslesser due to non-operating income earned during that year.

ACKNOWLEDGEMENT:

I place on record my appreciation and gratitude to all the employees and others who hadextended their support and co-operation during the year. In particular I am grateful tovarious officials of the Government especially Department of Chemicals andPetrochemicals Ministry of Chemicals & Fertilizers Ministry of Finance Ministry ofCommerce & Industry Banks particularly our Bankers State Bank of India Central Bankof India Board Members Statutory/Govt. Auditors Cost Auditors and all the agenciesconcerned. My gratitude is also to the Shareholders Bondholders and Customers who havestood by us in the present phase of our demanding situation.

We on our part would continue our efforts to take your Company into the future bymeeting the challenges grabbing the opportunities in our endeavor in the path towardsturnaround. We look forward to your continued support in this ongoing process.

In conclusion I am optimistic that the Company would attain a turnaround in the nearfuture.

S.B.Bhide

(Acting Chairman and Managing Director)