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Hindustan Organic Chemicals Ltd.

BSE: 500449 Sector: Industrials
NSE: HOCL ISIN Code: INE048A01011
BSE 09:43 | 19 Aug 13.40 0.15
(1.13%)
OPEN

13.50

HIGH

13.65

LOW

13.40

NSE 05:30 | 01 Jan Hindustan Organic Chemicals Ltd
OPEN 13.50
PREVIOUS CLOSE 13.25
VOLUME 1240
52-Week high 43.55
52-Week low 11.95
P/E
Mkt Cap.(Rs cr) 90
Buy Price 13.40
Buy Qty 55.00
Sell Price 13.60
Sell Qty 150.00
OPEN 13.50
CLOSE 13.25
VOLUME 1240
52-Week high 43.55
52-Week low 11.95
P/E
Mkt Cap.(Rs cr) 90
Buy Price 13.40
Buy Qty 55.00
Sell Price 13.60
Sell Qty 150.00

Hindustan Organic Chemicals Ltd. (HOCL) - Chairman Speech

Company chairman speech

Dear Shareholders

My Colleagues on the Board and I extend a warm welcome and sincere gratitude to allof you present here at this 57th Annual General Meeting of your Company. TheAnnual Report of the Company containing the Audited Annual Accounts together with theDirectors' Report and Auditors' Report for the year 2017-18 and the AGM Notice to theShareholders are in your hands for some time and with your permission I take them asread.

PERFORMANCE:

I must now share with you in brief the status of our Company's performance during theyear 2017-18.

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

The company could stabilize operations of the Phenol Plant at Kochi and ensurecontinuous operation of the Phenol plant during the year. Even though the working capitalconstraints continued the company could mobilize advance from major customers and achievehigher capacity utilization compared to previous year. During the year under review yourCompany could achieve sales turnover of ' 242.32 Crores (net of excise duty).

Your Company could successfully implement majority of the decision taken by theGovernment and close down the operation of Rasayani unit implement VRS to the employeeshand over the C NA/N204 plant to ISRO and sell 251 acre of land to BPCL (out of 442 acresale approved by the Government). The company as per the approved restructuring plan hasdisposed of the closed plants at Rasayani and has engaged NBCC for sale of balanceunencumbered land in the possession of the company.

With the successful redemption of the Bonds and repayment of working capital dues toBanks the company could achieve cost reduction and improve the performance of the Kochiunit where cost reduction measures are being implemented.

During the year your Company incurred a loss of ' 199.47 crore as against loss of '255.57 crore incurred during the previous year.

I wish to inform you that with the implementation of the restructuring plan approved bythe Government and with the help and support from various Ministries mainly Ministry ofChemicals & Fertilizers and other ministries like Ministry of Finance Ministry ofCommerce & Industries the company will be revived and with continuation of theanti-dumping duty support on Phenol and Acetone the company will turnaround in theshortest possible time.

FUTURE PLAN & REVIVAL / TURN AROUND PLAN:

Rasavani Unit

As per the approval of Government of India the operation of all the plants at RasayaniUnit (except C NA / N204 plant handed over to ISRO along with related manpower) has beenclosed. The Government has approved sale of 442 acre of land at Rasayani to BPCL for '618.80 crore. A bridge loan of ' 360.26 crore was received from GoI which has beenutilized to pay the matured Bonds and clear the statutory liabilities of the company. Outof the 442 acre sale of 251 acre has been completed and an amount of ' 351.40 crore hasbeen received from BPCL which is utilized for implementation of VRS to the employees ofthe Rasayani unit and to clear partially the liabilities of the company.

Kochi Unit

The Phenol Plant operation at Kochi unit has been stabilized and the Hydrogen Peroxideplant is also in operation. The company could mobilize advance payments from majorcustomers to tide over the working capital shortage and ensure continuous operation of thePhenol / Acetone plant.

Restructuring Plan.

As per the restructuring plan approved by the Government all the closed plants atRasayani Unit have been disposed of and the CNA/ N204 plant has been transferred to ISROalong with the manpower. As per the plan a bridge loan of ' 360.26 crore was receivedfrom GoI which has been utilized to pay the matured Bonds and clear the statutoryliabilities of the company. Further out of 442 acre of land sale to BPCL approved by GoI251 acre has been sold for ' 351.40 crore which is utilized for implementation of VRS tothe employees of the Rasayani unit and to clear partially the liabilities of the company.

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 Social Responsibility (CSR) and Sustainability Development (SD)Committee. During the Year 2017 the CSR and SD Committee was reconstituted comprising of3 Independent Directors & one Executive Director of the Board of the Company. Theterms of reference of the said CSR and SD Committee included among others CSR as perSection 135 of the Companies Act2013 and Rules 2014 thereunder alongwith ScheduleVlletc.

Though the Company is not required to carry out any CSR activities due to incurringlosses in view of closure of Rasayani unitCompany has donated Rasayani unit's Librarybooks valuing ' 3.19 lakhs (WDV) to Dr. Babasaheb Ambedkar Marathwada UniversityAurangabad as a CSR activity as these books will be useful to the students community atthe 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 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. of Kerala for outstanding performance in industrial safety for the year2012. No further awards received during the year 2017-18.

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 hasbeen extended upto 2020 and ISO 14001 is valid up to 2017 audit for further extension isin 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.

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

HINDUSTAN FLUOROCARBONS LIMITED (HFL) - SUBSIDIARY:

During the year HFL has made Net loss of ' 482.65 lacs (IND AS) from operations asagainst the net loss of ' 633.43 lacs (IND AS) & ' 488.55 (IGAAP) of the previousyear. During the year the sales turnover (net) was ' 3685.36 lacs as against ' 3383.51lacs in the previous year. During the year under report production of PTFE was 21.754Metric Tons as against 41.22 Metric Tons in the previous year. During the year 3933.27Metric Tons of CFM-22 was sold in the market against 3391.84 Metric Tons in the previousyear and balance quantity was used as feed stock to manufacture various products includingFluoro Specialty Chemicals. Accordingly during the year Metric Tons of Tetra FluoroEtylene (TFE) was used to manufacture Telomere. Quality of all company's productscontinued to be well accepted by our customers. Company has achieved 100 %capacity utilization as against 95.42 % in the previous financial year. Thefinancial performance of the company improved during the year even though the Salesperformance was more or less static compared to previous 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 Department of Public EnterprisesMinistry of Finance Ministry of Commerce & Industry Bankers State Bank of India andCentral Bank of India Board Members Statutory/Govt. Auditors Cost Auditors and all theagencies concerned. My gratitude is also to the shareholders Bondholders and customerswho have stood by us in the present phase of transformation of the company.

We on our part would continue our efforts for time bound completion of therestructuring plan in our endeavour towards the path of achieving early turnaround ofthe company. We look forward to your continued support in this ongoing process.

In conclusion I am optimistic that the Company would attain a turnaround comingfinancial year.

S.B.Bhide

Chairman and Managing Director