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Hindustan Organic Chemicals Ltd.

BSE: 500449 Sector: Industrials
NSE: HOCL ISIN Code: INE048A01011
BSE 00:00 | 24 Sep 39.90 0.70
(1.79%)
OPEN

39.50

HIGH

41.00

LOW

38.75

NSE 05:30 | 01 Jan Hindustan Organic Chemicals Ltd
OPEN 39.50
PREVIOUS CLOSE 39.20
VOLUME 165068
52-Week high 47.90
52-Week low 13.00
P/E
Mkt Cap.(Rs cr) 268
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 39.50
CLOSE 39.20
VOLUME 165068
52-Week high 47.90
52-Week low 13.00
P/E
Mkt Cap.(Rs cr) 268
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

Dear Shareholders

On behalf of my Colleagues on the Board and myself I extend a warm welcome and sinceregratitude to all of you present here at this 59th Annual General Meeting of your Company.The Annual Report of the Company containing the Audited Annual Accounts together with theDirectors' Report and Auditors' Report for the year 2019- 20H and the AGM Notice to theShareholders are in your hands for some time and with your permission I take them asread. I

PERFORMANCE:

I must now share with you in brief the status for our Company's performance duringthe year 2019-20.

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

I am happy to inform you that operations of the Phenol Plant has achieved a CapacityUtilisation of 67 %. Even in the absence of working capital limits sanctioned by theBanks the company could mobilize advance from major customers and achieve higher capacityutilization compared to previous year. During the year under review your Company couldachieve sales turnover of Rs. 300.01 Crores.

The operations of the Company were scaled down during the last week of the year. Theplant was under shutdown during the month of June 2019 due to uneconomic prices as theprices of Phenol were hardly recovering the variable cost due to stiff competition fromimports. Further plant was under shutdown for 48 days during Oct - Nov 2019 for Catalystchange and maintenance works and for 8 days due to shortage of Benzene. The Company was inlock down for 7 days and thereby a decrease in production of Phenol Acetone HydrogenPeroxide H.E. of Cumene and Cumox Oil.

The price of our main product Phenol has come down due to the nationwide restriction onthe manufacturing activities. There was reduction in turnover of Rs.10.38 crore andrevenue loss of Rs.3.26 crore due to the production loss of seven days and price reductionof finished products during 2019-20.

As per the approved restructuring plan during the previous year out of the balance+/-191 acres of land approved for sale to BPCL (442-251 acre) sale of 38.687 acres hasbeen completed in May 2019 for which an amount of Rs.53.62 Crore after deducting 1% TDSwas received from BPCL. After adjustment of balance principal amount due towards BPCL rawmaterial supplies the balance amount received from BPCL has been utilised partially topay off the other liabilities and payment of salary dues of Kochi unit employees.

With the redemption of the Bonds and repayment of working capital dues to Banks andVRS to surplus manpower the company could achieve cost reduction and improve theperformance of the Kochi unit.

During the year your Company incurred a loss of (after tax) of Rs.94.68 crore asagainst Profit of Rs.70.88 crore incurred during the previous year.

I wish to inform you that with the successful implementation of the restructuring planapproved by the Government and with the help and support from various Ministries mainlyDepartment of chemicals & Petrochemicals Ministry of Chemicals & Fertilizers andother ministries like Ministry of Finance Ministry of Commerce & Industries thecompany is on the path to recovery and with continuation of the anti-dumping duty supporton Phenol and Acetone of the company and reduction in interest cost (with the repayment ofGovernment loan) the company will continue to be in Profits.

FUTURE PLAN & REVIVAL/TURN AROUND PLAN:

Restructuring Plan.

Rasayani Unit

Out of the balance +/-191 acres of land approved for sale to BPCL (442-251 acre) saleof 38.687 acres has been completed in May 2019 for which an amount of Rs.53.62 Croreafter deducting 1% TDS was received from BPCL. After adjustment of balance principalamount due towards BPCL raw material supplies the balance amount received from BPCL hasbeen utilized partially to pay off the other liabilities and payment of salary dues ofKochi unit employees. The company is in discussions with BPCL and MMRDA for the sale ofbalance land at Rasayani. The revenue generated from the sale of balance land will beutilized for repayment of Govt of India loan.

Kochi Unit

The company could mobilize advance payments from major customers to in the absence ofsanctioned working capital limits and ensure continuous operation of the Phenol /Acetoneplant. 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. As per Department of Public Enterprise (DPE) Guideline on CorporateSocial Responsibility (CSR) Company had constituted Board level Corporate SocialResponsibility (CSR) and Sustainability Development (SD) Committee. During the Year 2019the CSR and SD Committee was reconstituted comprising of 3 Independent Directors & oneExecutive Director of the Board of the Company. The terms

Hof reference of the said CSR and SD Committee included among others CSR as HperSection 135 of the Companies Act2013 and Rules 2014 thereunder along with H ScheduleVII etc.

H Though the Company is not required to carry out any CSR activities due to incurring Hlosses in order to help fighting against Covid-19 Pandemic Company donated H Medicineskits to needy suffering people Face shields to Local Police and Government H HospitalsAnd also donated Hydrogen Peroxide to local bodies for sanitization purpose. H Company hascontributed one day salary each of all employee towards PM Cares Funds and Kerala ChiefMinister's Distress Fund.

As a part of Swatch Bharat Abhiyan some activities were also carried out in the HOCL.On the International Yoga day A talk on the importance of yoga was organized at TrainingCentre for the benefit of employee.

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 had received pollution control award among very large-scale industriesfrom Kerala State Pollution Control Board for substantial and sustained efforts inpollution control 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 2018-19.

HOCL has taken the measures to prevent the spread of COVID-19 pandemic.

ISO CERTIFICATION :

HOCL Kochi unit is having ISO 9001: 2015 (Quality Management System) and ISO 14001:2015(Environmental Management System) certification. The existing certificate for ISO 9001 hasbeen extended up to 18th June 2020 and ISO 14001 is valid up to 07th March 2022 audit forfurther extension is in progress.

INDUSTRIAL RELATIONS:

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

CORPORATE GOVERNANCE:

The Company has complied with the various requirement of Corporate Governance. Thedetails in this regard form part of this report in Annexure IV.

Recently HOCL has been awarded ‘Excellent' grade in Corporate Governance Reportfor the year 2019-20.

HINDUSTAN FLUOROCARBONS LIMITED (HFL) - SUBSIDIARY:

During the year HFL has made Net Loss of Rs. 363.24 lacs from operations as againstthe Net Profit of Rs. 170.20 lacs of the previous year. During the year the salesturnover was Rs. 3695.77 lacs as against Rs. 3886.03 lacs in the previous year. During theyear under report production of PTFE was 3.27 Metric Tons as against 37.79 Metric Tons inthe previous year. During the year 961 Metric Tons of CFM-22 was sold in the marketagainst 1056 Metric Tons in the previous year and balance quantity was used as feed stockto manufacture various products including Fluoro Specialty Chemicals. Quality of allcompany's products continued to be well accepted by our customers. Company has achieved94% capacity utilization as against 100 % in the previous financial year. The financialperformance of the company improved during the year even though the Sales performance wasmore or less static compared to previous year. Ministry of Chemicals and FertilizersDepartment of Chemicals & Petrochemicals vide No. P. 51015/06/2019-Ch. Ill dated29-01-2020 informed the decision of Cabinet Committee on Economic Affairs directingclosure of Hindustan Fluorocarbons Limited Subsidiary of HOCL which was approved by theshareholders on 30-03-2020.

ACKNOWLEDGEMENT:

I place on record my appreciation and gratitude to all the employees and otherstakeholders who had extended their support and co-operation during the year. Inparticular I am grateful to various officials of the Government especially Department ofChemicals and Petrochemicals Ministry of Chemicals & Fertilizers Department ofPublic Enterprises Ministry of Finance Ministry of Commerce & Industry Governmentof Maharashtra Kerala Government and Bankers State Bank of India and Central Bank ofIndia Board Members Statutory/Govt. Auditors Cost Auditors and all the agenciesconcerned. My gratitude is also to the shareholders and customers who have helped us inthe present phase of transformation of the company.

We on our part would continue our efforts for completion of the restructuring plan atthe earliest in our endeavour towards the path of achieving early turnaround of thecompany. We look forward to your continued support in this continuing process.

In conclusion I am optimistic that the Company would sustain the achievement duringthe year in the years ahead.

Sd/-

S.B.Bhide

Chairman and Managing Director

.