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 58th Annual General Meeting ofyour Company. The Annual Report of the Company containing the Audited Annual Accountstogether with the Directors' Report and Auditors' Report for the year 2018-19 and the AGMNotice to the Shareholders are in your hands for some time and with your permission Itake them as read.
I must now share with you in brief the status of our Company's performance during theyear 2018-19.
The production and sales figures are contained in the Directors' Report before you andhence not repeated.
I am happy to inform you that in the first full year of operations of the Phenol Plantafter stabilization has achieved a record production of 31991 MT (80 %) Phenol at Kochi.Even in the absence of working capital limits sanctioned by the Banks the company couldmobilize advance from major customers and achieve higher capacity utilization compared toprevious year. During the year under review your Company could achieve sales turnover ofRs. 471.99 Crores.
The Company has implemented majority of the decision taken by the Government related toapproved restructuring plan like completion of sale of 289 acre of land to BPCL (out of442-acre sale approved by the Government). In addition the company has completed sale of85 acre of land (out of 242-acre sale approved by the Government). As per the approvedrestructuring plan the company has disposed of the closed plants at Rasayani.
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 earned a Net Profit(after tax) of Rs.50.11 crore asagainst loss of Rs.203.45 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 442-acre sale of 289 acre has been completed and survey of the land hasbeen completed during the year and the sale of balance land is in progress. In additionsale of 85 acre of land (out of 242 acre of land sale approved by Government) to BPCL hasbeen completed and the dues to BPCL and employees and vendors has been fully settled.
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 2018the CSR and SD Committee was reconstituted comprising of 3 Independent Directors & oneExecutive Director of the Board of the Company. The terms of reference of the said CSR andSD Committee included among others CSR as per Section 135 of the Companies Act2013 andRules 2014 thereunder along with Schedule Vlletc.
Though the Company is not required to carry out any CSR activities due to incurringlosses in view of closure of Rasayani unit Company has donated Rasayani unit's old usedtables fans chairs and cupboards etc. to Zilla Parishad Schools and other educationalinstitutions and charitable trusts etc. Company has also donated the books in Library toMarathwada University.
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 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 2018-19.
ISO CERTIFICATION :
HOCL Kochi unit is having ISO 9001: 2015 (Quality Management System) and ISO 14001:2015(Environmental Management System) certification.Theexistingcertificatefor ISO 9001 hasbeen extended up to 18th June 2020 and ISO 14001 is valid up to 07thMarch 2022 audit for further extension is in progress.
The overall Industrial Relation situation continues to be peaceful and cordial duringthe year. There was no strike or lockout during the year.
The Company has complied with the various requirement of Corporate Governance.
The details in this regard form part of this report in Annexure IV. RecentlyHOCL has been awarded Excellent' grade in Corporate Governance Report for the year2018-19.
HINDUSTAN FLUOROCARBONS LIMITED (HFL) - SUBSIDIARY:
During the year HFL has made Net Profit of Rs. 170.20 lacs from operations as againstthe net loss of Rs. 77.39 lacs of the previous year. During the year the sales turnoverwas Rs. 3886.03 lacs as against Rs. 3685.36 lacs in the previous year. During the yearunder report production of PTFE was 37.79 Metric Tons as against 30.40 Metric Tons in theprevious year. During the year 1056 Metric Tons of CFM-22 was sold in the market against1165 Metric Tons in the previous year and balance quantity was used as feed stock tomanufacture 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 Sales performance was more or less staticcompared to previous year.
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.
Chairman and Managing Director