The Board of Directors presents herewith the 62ndAnnual Report of your Company along with the Audited Statement of Accounts for the financial year 2022-23.
1. FINANCIAL RESULTS
The financial results for the year ended 31.03.2023 with the comparative figures of company's operations for the previous year is as under:
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(Rs. in Lakhs)
|
| |
Particulars
|
2022-23
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2021-22
|
|
Revenue from operations
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63,143.56
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43,367.39
|
|
Other Income
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1,154.60
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3,142.73
|
|
Total
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64,298.16
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46,510.12
|
|
Expenditure
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69,320.57
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49,128.94
|
|
Profit/ (loss) before exceptional item & Tax
|
(5,022.41)
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(2,618.82)
|
|
Less: Exceptional items
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-
|
-
|
|
Profit /(Loss) before Tax
|
(5,022.41)
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(2,618.82)
|
|
Less: Provision of Tax
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-
|
-
|
|
Profit/(Loss) after Tax
|
(5,022.41)
|
(2,618.82)
|
|
Other Comprehensive Income for the year, net of tax
|
782.78
|
1,602.93
|
|
Total Comprehensive Income for the year
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(4,239.63
|
(1,015.89)
|
2. RESERVES [Section 134(3)(i)]
Company has not transferred any amount to reserves due to continuous losses.
3. MEMORANDUM OF UNDERSTANDING WITH GOVERNMENT OF INDIA
Company has been entering into a Memorandum of Understanding (MOU) with the Ministry of Chemicals & Fertilizers, Government of India, setting the performance parameters and targets every year. Company secured “Good” rating for the year 2022-23.
4. CONSOLIDATED FINANCIAL STATEMENT
In accordance with the provisions of the Companies Act, 2013 (“the Act”) and IND AS 110 -Consolidated Financial Statement, the audited consolidated financial statement for the period ending 31.03.2023 is provided in the Annual Report.
5. DIVIDEND
In view of the loss incurred during the current year, the Board of Directors do not recommend any Dividend for the year under review.
6. CHANGE IN NATURE OF BUSINESS IF ANY
Consequent to the decision of the Govt. of India for closure of Subsidiary Company Hindustan Fluorocarbons Ltd., an amount of Rs.75.87 crore has been released to the subsidiary company as interest free loan from Govt. of India to meet the expenses related to VRS/VSS to employees and settling dues to Bank and other liabilities.
7. SHARES
The Authorized Share Capital of the company is Rs.3700000000 and the paid-up capital of the company is Rs.3371731000. The company's shares are listed in BSE (Scrip ID:500449). During the period under review, the company has not: (i) bought back any of its securities (ii) issued any sweat equity shares (iii) issued any bonus shares (iv) provided any stock option scheme to employees.
8. FINANCIAL HIGHLIGHTS
During the year 2022-23, the company has achieved a Gross Income of Rs.642.98 crore registering an increase of 6.42 % as against the Previous Year Gross Income of Rs.465.10 Crore.
9. 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:
26th May, 2022, 4th August, 2022, 9th November, 2022 and 31st January, 2023.
During the year the Committee Meetings were held on the following dates:
Audit Committee meeting
26th May, 2022, 4th August, 2022, 9th November, 2022 and 31st January, 2023.
Stakeholders Relationship Committee Meeting 9th November, 2022
Nomination & Remuneration Committee meeting 29th March, 2023
Other details are furnished in the Corporate Governance Report provided asAnnexure I to this Report.
10. EXTRACT OF ANNUAL RETURN
Pursuant to sub-section 3(a) of Section 134 of the Companies Act 2013, read with Rule 12 of the Companies(Management and Administration) Rules, 2014 an extract of the Annual Return as at March 31, 2023 is available at www.hoclindia.com/annual-return
11. SUBSIDIARY COMPANY
Your company has one (1) subsidiary company namely; Hindustan Fluorocarbons Limited [HFL]. Ministry of Chemicals and Fertilizers, Department of Chemicals & Petrochemicals vide No. P. 51015/06/2019-Ch. III dated 29th January, 2020 informed the decision of Cabinet Committee on Economic Affairs, directing closure of HFL, which was approved by the shareholders on 30th March, 2020. Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of subsidiary company in FormAOC-1 is attached as Annexure II to the Board's Report.
12. RELATED PARTY TRANSACTIONS
All the Related Party Transactions that were entered into during the financial year were on arm's length basis and were in ordinary course of business. There were no materially significant transactions with Related Parties during the financial year 2022-2023 which were in conflict with the interest of the Company. Suitable disclosures as required under IND AS-24 have been made in Note No.38 of the Notes to the Standalone Financial Statements.
Particulars of contract/arrangements/transactions made with related parties, pursuant to Section 188(1) of the Companies Act, 2013 in the prescribed form AOC-2 is appended as Annexure IIIwhich forms part of this report.
13. MANAGEMENT DISCUSSION & ANALYSIS REPORT
The details in this regard forms part of Corporate Governance Report as Annexure IV to the Board's Report.
14. CORPORATE GOVERNANCE
Due to non-availability of One (1) Independent Women Director for the substantial period of FY 2022-23, there has been non-compliance to that extent with various requirements of Corporate Governance under the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and various Rules/ Regulations made there under. The details in this regard forms part of Corporate Governance report to the Annual Report. The requisite certificate from the practicing company secretaries confirming with the conditions of Corporate Governance is attached to the report on Corporate Governance.
15. COMPLIANCE OF CORPORATE GOVERNANCE GUIDELINES ISSUED BY DEPARTMENT OF PUBLIC ENTERPRISES
Department of Public Enterprises [DPE], Government of India, has laid down certain parameters for the purpose of grading the CPSEs on the basis of their compliance with guidelines on Corporate Governance and this report needs to be submitted to the Ministry of Chemicals & Fertilizers, Government of India on Quarterly basis. Company has been complying with the Guidelines on Corporate Governance for CPSEs laid down by DPE and regularly submits reports to the Ministry of Chemicals & fertilizers, Government of India. Applicable grade of 4thQuater/year ended 31.03.2023 is “Excellent”.The requisite certificate from the practicing company secretaries confirming with the conditions of DPE Corporate Governance guidelines is attached to the report on Corporate Governance.
16. MANNER IN WHICH FORMAL ANNUAL EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS HAS BEEN CARRIED OUT:
The provisions of Section 134 (3)(p) of the Act shall not apply to a Government Company in case the Directors are evaluated by the Ministry, which is administratively in charge of the Company as per its own evaluation methodology. HOCL, being a Government Company, the performance evaluation of the Directors is carried out by the Administrative Ministry (MoC&F), Government of India, as per applicable Government guidelines.
17. KEY MANAGERIAL PERSONNEL:
The following are Key Managerial Personnel of the Company:
a) Shri Sajeev B - Chairman & Managing Director[DIN: 09344438]
b) Shri Yogendra Prasad Shukla-CFO & Director (Finance)[DIN: 09674122]
c) Shri Subramonian H - Company Secretary & Compliance Officer[ACS: 28380]
18. DETAILS OF DIRECTORS AND/OR KMP’SWHO HAVE BEEN APPOINTED OR RESIGNED DURING THE YEAR:
i. As per Govt. of India, Ministry of Chemicals & Fertilizers, Department of Chemicals & Petrochemicals Order No.P-51011/2/2020-CHEM.III-CPC dated 22-06-2022., Shri Yogendra Prasad Shukla was appointed as Director (Finance) of HOCL for a period of five years w.e.f date of his assumption of charge of the post or till date of his superannuation or until further orders whichever is the earliest.Accordingly, Director (Finance) assumed charge with effect from 4th July, 2022.
ii. As per Govt. of India, Ministry of Chemicals & Fertilizers, Department of Chemicals & Petrochemicals OM.No.P-51015/12/2014-CHEM.III-CPC dated 14-10-2022, Shri Sanjay Pandey, Joint Secretary and Financial Advisor, Ministry of Social Justice and
Empowerment, Additional Charge JS&FA, Ministry of Chemicals & Fertilizers was appointed as Government Nominee Director of HOCL in place of Shri Satendra Singhwho has been appointed as Additional Secretary, Cabinet Secretariat.
iii. As per Govt. of India, Ministry of Chemicals & Fertilizers, Department of Chemicals & Petrochemicals OM No..P-51015/12/2014-CHEM.III-CPC dated 13-12-2022., Shri Sanjay Rastogi was nominated as Government Nominee of HOCL in place of Shri Sanjay Pandey.
19. PARTICULARS OF EMPLOYEES
Information regarding particulars of employees drawing remuneration in excess of the limit specified under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable as none of the employees of the Company has drawn remuneration in excess of the stipulated limit, during the year under review.
20. COMPOSITION OF AUDIT COMMITTEE (AC) AND NON-ACCEPTANCE OF ANY RECOMMENDATIONS OF AC (only for publicand listed companies).
During the FY 2022-23, all the recommendations of the Audit Committee were accepted by Board of Directors.
As on 31st March, 2023 Audit Committee has 3 members in compliance with Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Details of Composition, meetings of Audit Committee/Sub-Committee are provided in Corporate Governance Report in Annexure IV to this Report.
21. COMMITTEES OF THE BOARD
The Company's Board has the following Committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Stakeholder Relationship Committee
iv. Corporate Social Responsibility Committee (CSR)
22. SECRETARIAL STANDARDS
The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
23. DIRECTOR’S RESPONSIBILITY STATEMENT
The financial statements are prepared in accordance with the Indian Accounting Standards (IND AS), the provisions of Companies Act, 2013 and guidelines issued by SEBI. The IND AS are prescribed under Section 133 of Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendments, rules issued thereafter. Your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013 -
i. That in the preparation of the annual accounts for the year ended 31st March, 2023; the applicable accounting standards had been followed along with proper explanation relating to material departures.
ii. That such accounting policies as mentioned in the Notes on 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 as at the financial year ended 31st March, 2023 and the profit or loss of the Company for that period.
iii. 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.
iv. That the annual accounts for the year ended 31st March, 2023 had been prepared on a going concern basis.
v. Directors have laid down internal financial controls to be followed by the company and such internal financial controls are adequate and are operating effectively and
vi. 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.
24. INDEPENDENT DIRECTORS DECLARATION -
The Company has received necessary declaration from each of the Independent Directors that he meets the criteria of independence laid down under section 149 (6) of the Companies Act, 2013 and listing regulations.
25. DISCLOSURE ON REAPPOINTMENT OF INDEPENDENT DIRECTORS
No reappointment of Independent Directors was made during the year under review. (FY 20222023).
26. COMPANY’S POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF DIRECTORS ETC.
As per notification dated 5th June, 2015 issued by Ministry of Corporate Affairs, provision of section 134(3) (e) of the Companies Act, 2013 regarding disclosure of its policy on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matter provided under sub- section (3) of section 178 of the Companies Act, 2013 are not applicable to a Government company.
Company being a CPSE, appointments 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 directions of the Department of Chemicals & Petrochemicals and the prescribed DPE Guidelines are being followed. The Terms and Conditions of appointment of Independent Directors and other directors, are as per the Government Orders are disclosed on the Company's website.
27. RATIO OF DIRECTORS REMUNERATION TO MEDIAN EMPLOYEES REMUNERATION AND OTHER PRESCRIBED ELABORATE DISCLOSURES AND DETAILS:
The provisions of Section 134 (3)(e) of the Act are not applicable to a Government Company. Consequently, details on Company's policy on Directors' appointment and other matters are not provided under Section 178 (3) of the Act. Similarly, Section 197 of the Act shall not apply to a Government Company. Consequently, disclosure of the ratio of the remuneration of each Director to the median employee's remuneration and other such details including the statement showing the names and other particulars of every employee of the Company, who if employed throughout / part of the financial year, was in receipt of remuneration in excess of the limits set out in the Rules are not provided in terms of Section 197 (12) of the Act read with Rule 5 (1) / (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.The Chairman & Managing Director and the Whole-time Directors of the Company did not receive any remuneration or commission from any of its Subsidiaries. HOCL, being a Government Company, its Directors are appointed / nominated by the Government of India as per the Government / DPE Guidelines which also include fixation of pay criteria for determining qualifications and other matters.
28. AUDITORS
a) Statutory Auditors
M/s. Balan & Co, Chartered Accountants, was appointed as Statutory Auditors of your Company for Corporate Office and Kochi Unit for FY 2022-2023 by C&Ag.
The auditors have furnished a declaration confirming their independence as well as their arm's length relationship with the Company as well as declaring that they have not taken up any prohibited non-audit assignments for the Company. The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the audit process. The auditors attend the Annual General Meeting of the Company.
The Auditors in their report for the year have not reported any instances of fraud committed by the officers/employees of the company.
b) Cost Auditors
The Board of Directors had appointed R.M Bansal & Co., Cost Accountants, Kanpur having branch office at Tc 49/620(2) safnamMrwa 61-A, Malliyidom, Thiruvanathapuram - 695009 as Cost Auditors of your Company for FY 2022-2023. In the 61st AGM held on 29th September, 2023 the members have ratified the remuneration payable to the Cost Auditors.
c) Internal Auditors
M/s. Isaac & Suresh, Chartered Accountants were re-appointed as Internal Auditor of your Company for Corporate office and Kochi unit for FY 2022-2023.
d) CAG Auditors
Supplementary Audit is conducted by Principal Director of Audit (Shipping), Mumbai. CAG vide letter dated 8th August, 2023 issued Non-Review Report for Standalone and Consolidated financial statements for the year ended 30th March, 2023.
e) Secretarial Auditors
The Board of Directors had appointed D. S. Momaya & Co., Practising Company Secretaries to conduct Secretarial Audit for the FY 2022-2023. The Secretarial Audit Report for the Financial Year ended 31st March, 2023 is annexed to this Report as and complied with Section 204 of Companies Act and Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. The Company has also obtained Annual Secretarial Compliance Report form the PCS D. S. Momaya& Co. for the year 2022-23 under Regulation 24A of Listing Regulation. The observations in the Secretarial Audit report and the management response thereof are given below;
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Sl No.
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Observation
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Management Response
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1.
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The Board of Directors of the Company was not duly constituted for the FY 2022-23, due to vacancy of One (1) Independent Women Director on Company's Board.
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HOCL is a CPSE (Central PSU/PSE) under the administrative control of the Ministry of Chemicals & Fertilizers (MoC&F), Dept. of Chemicals and Petro Chemicals (DCPC), Government of India. Hence, the MoC&F is the administrative ministry and as per Company's Articles of Association (AOA), the powers to appoint the Board of Directors of HOCL company vest with the GOI/ Administrative Ministry. Presently, there is vacancy of one (1) Independent Women Director in HOCL. In order to fill the vacancy, Company vide letter dated 16th June, 2022 and 13th September, 2022 and e-mail dated 10th January, 2023 and again on 15th June, 2023 requested the Administrative Ministry to appoint one (1) Women Independent Director on HOCL Board. Company is awaiting necessary orders from the ministry in this regard.
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Sl No.
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Observation
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Management Response
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2.
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The Company, during the period under review, has maintained Structured Digital Database (herein after referred to as “SDD” or the “Database”) but as required under Regulation 3(5) & 3(6) of PIT Regulations, 2015 with respect to the time stamping, audit trails and non-tampering of the data could not be established.
|
In HOCL, financial results are identified as UPSI. Accordingly, the department concerned is informed about the compliance requirement as per SEBI (Prohibition of Insider Trading) Regulations, 2015.
In compliance of Reg 3(5), Company is maintaining SDD and have recorded necessary details stipulated in the Reg 3(5) and the digital signature of Company secretary is affixed to record time stamp and to avoid any non -tampering of data.
Once the UPSI is shared, recorded in the database and finalized, digital signature is affixed by the Company Secretary which contains the system generated date and time. After completion of entry is made in the SDD and DSC is affixed, data cannot be tampered. Digital signature serves the purpose of both Time Stamping and Audit Trail to prevent any unauthorized modifications. Accordingly, a mechanism is in place to ensure records in the database is not editable after affixing the DSC in database.The access to such database is strictly with the Company Secretary and very limited access to such database is permitted. Further, SEBI PIT Regulations is silent about the procedure on how such database has to be maintained and it is the discretion of the Company for handling and maintenance of such database. Accordingly, no software is maintained by the company for recording SDD.
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30. Details of vigilance cases for the Financial Year 2022-23
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| |
Opening balance as on 01.04.2022
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Vigilance cases received during 01.04.2022 to 31.03.2023
|
Disposed off
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Balance
|
| |
NIL
|
0
|
0
|
NIL
|
|
31.
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Status of pending CAG Paras and Management Replies
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|
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Name of the Audit Para
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Brief of the para
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Reporting status
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Para No.2.1 of C&AG Report No.13 of 2014
|
Irregularities in the transfer of autonomous management of HOCL school to Mahatma Education Society and unauthorized favors to Mahatma Education Society for expanding its activities and also failed to recover lease rent of Rs.6.54 crore.
|
HOCL has entered into an agreement on 16.10.2006 to lease the infrastructure facilities to Mahatma Education Society(MES) for managing the school for a period of 30 years. The management of MES in order to start professional courses has constructed new buildings and facilities in the premises in contravention of the terms of agreement. The Company has sent a notice for termination as per the terms of the agreement with MES. MES has filed a petition challenging the termination notice in the Dist. Magistrates Court Alibag. MES has filed petition in the Bombay High Court for appointment of Arbitrator in the dispute between HOCL and MES. The District Court has granted stay pending the final disposal of the Arbitration petition of MES. Company has filed a petition to vacate the stay granted by the District Court in the Bombay High Court.
At present, the petitions are pending before the Hon'ble Bombay High court to be heard.
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32. SAFETY, HEALTH AND ENVIRONMENT
In the areas of Health, Hygiene and Environment, the company has undertaken periodic medical examination, as well as statutory requirements of fitness check-up were carried out during the year 2022 forour employees. Audiometry tests were carried out for those who are exposed with Noise and Autotoxicity tests were carried out for the Benzene handlers apart from other statutory regular check-ups.
Periodic awareness session on Hygiene, Healthy living, Covid precautions and guidelines were imparted.
In our commitment to Environment, we have ensured that the level of pollutants from the Factory and nearby surroundings was much below the permissible levels.
As part of protecting the environment, awareness sessions, competitions, Swachh Bharat activities, promoting employees for vegetable cultivation under a “Green Mission”, Beautification of the plant premises involving the entire employees of the organization were carried out. Online Effluent Monitoring and stack monitoring system is implemented to comply withthe Central Pollution Control Board regulations. Periodic inspections and safety walk were carried out by the Safety Committee members in addition to the daily patrolling of Fire crew as a continual improvement
HOCL is an IMS (Integrated Management System) certified organisation comprising of Quality Management System (ISO-9001), Environment Management System (ISO-14001) and Occupational Health and Safety Management System (ISO 45001). Company is also certified for Energy Management System (ISO-50001).
The Company has implemented severalnew measures to improve the safety culture in addition to the normal systems and procedures.
1. HSE suggestion scheme
A new initiative which aims to encourage the employees to put forward their creative and potential ideas that could lead to considerable improvements in Safety, Reduction in wastages, Health of employees, protecting the flora and fauna or the natural resources through operational controls and Best practices. Also, to acquire inputs on HSE where others wise we wouldn't receive.
2. Pre-Start-up Safety Review (PSSR)
PSSRs are built to avoid workplace incidents and resultant equipment damage or employee harm. It is a safety checklist covering check points related to electrical, mechanical, instrumentation, fire & safety, production and utility departments. PSSR is carried out for the following types of start-ups
a. New equipment
b. Modified existing equipment
c. Process changes
d. Major turnaround (28 days and above)
3. Portable Appliance Testing (PAT)
PAT is the process of checking electrical appliances for safety through a series of visual inspections and electronic tests. This is the best way of ensuring that appliances are safe to operate.
Our Quality Control Department introduced PAT system on electrical equipment before taking it in a stream of analysis. Electrical Department or Shift In charge (QC) will carry out Portable Appliance Test and marked ''TESTED OK'' with date on the equipment
4. Behavioural Based Safety (BBS)
Psychology is the study of human behaviour, and individual behaviour is a recognised impediment to upholding high standards of health and safety. Many people know what they are doing is incorrect, but they still choose to do it anyway. Other people make mistakes unintentionally, and those people can be instructed in behavioural safety. In order to prevent and control human behaviour and prevent accidents, behaviour-based safety program has gained importance.
The company has its own online work permit system integrating 6 separate work permits viz, Hot work, Cold work, Confined space entry, Work at height, Excavation and Radiography. HOCL has developed benchmark in Accident /incident investigation through a 29-point accident investigation checklist. The company has implemented Near Miss reporting system whereby employees can report any unsafe acts/conditions and corrective actions shall be taken after a review to prevent accidents.
Refresher training sessions on Fire and safety were imparted to the employees. Additional safety training for truck drivers were given for creating a safety culture in driving. Awareness programs related to Fire & Safety were conducted for nearby public in association with the Department of Factories and Boilers, Govt of Kerala. Fire Safety awareness and practical training imparted to nearby school students to inculcate a safety culture in the young minds.Also, provided Fire Extinguishers for the School building. Various competitions were organized for creating more awareness on safety among employees, observed National Safety day,National fire service week, Road safety week etc.
Awareness sessions on Healthy food habits were conducted and the campus has been declared as “Eat Right Campus” by FSSAI. A Bio gas plant is commissioned in the canteen for treating food waste as part of Cleanliness Mission and Swachhta action by Govt. of India. Many initiatives have been taken in reducing food waste, Cooking Oil, safe disposal of used cooking oil through authorised agencies.
HOCL bagged “First Prize in Kerala State Industrial SafetyAward 2022” from the Department of Factories and Boilers, Government of Kerala and received “SurakshaPuraskar Award 2022” for the 4th consecutive year from M/s. National Safety Council, Kochi Chapter. Our employees have participated in the State level competitions conducted by M/s. National Safety Council,Kerala Chapter held in connection with National Safety day and won prizes.The company has achieved 797392 safe man hours for the year 2022 with no lost time accidents in the organization.
33. RESERVATION AND OTHER WELFARE MEASURES FOR SCHEDULED CASTES/ SCHEDULED TRIBES/ OTHER BACKWARD CLASSES AND PERSONS WITH DISABILITIES.
All guidelines laid down in respect of Reservation and other welfare measures for Scheduled castes/Scheduled Tribes/Other Backward Classes are complied with. The provisions for special arrangement for Persons with Disabilities at work place have been complied with.
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Representation of SC, ST and Women in employment position as on 31.03.2023
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Category
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Total
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SC
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ST
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WOMEN
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A
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76
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8
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5
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6
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B
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22
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5
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3
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-
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C
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75
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13
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2
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8
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D
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10
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1
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|
-
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Total
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183
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27
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10
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14
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34. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY.
During the year under report, the company continued its efforts to promote Hindi as Official Language in its day to day official activities. 09 Hindi workshops were conducted during the year including a special session on Annual Programme 2022-23 on Official language for HOD's and Senior Officers of Corporate office and Kochi. Hindi week and Hindi Fortnight were organized at Corporate office and Kochi units on 14th - 21st September and 14th- 29th September respectively. Our officers attended second All India Rajbhasha Seminar organized by Dept of OL, Ministry of Home Affairs at Surat, Gujrat on 14 & 15 September 2022. During Hindi Week/Fortnight celebrations, various competitions were also organized and large number of employees participated. Our company received Third prize for best implementation of OL Policy from Hon' Minister of Chemicals and Fertilizers. HOCL, Kochi Unit also bagged First prize for the best implementation of OL policy by Town official language Implementation Committee (TOLIC). Our Corporate and Kochi Unit were inspected by the First sub-committee of the Parliamentary Committee on Official Language at Mumbai and Kochi on 11.07.2022 & 15.10.2022 respectively. Our both offices were actively participated in various programmes conducted by TOLIC (PSU). One Day OL seminar for exclusively Hindi Staff of TOLIC's (Central Govt and PSU) of Kochi was conducted on 15 November 2022 in our office premises. Our officers were attended various OL seminars organized by FACT, HPCL, Cochin Shipyard, Kochi TOLIC (PSU) and Kochi TOLIC (Bank) attended Regional Joint Conference on Official Language conducted by Dept of OL at Thiruvananthapuram. Hindi Quiz competition organized in our office during Joint Hindi celebration of Kochi TOLIC(PSU). To make awareness among students the importance of Hindi, celebrated World Hindi Day on 10th January 2023 at Govt Girls HSS, Tripunitura, Ernakulam. An e-magazine “Pahachan” was published by the company during the period. All documents under section 3(3) of OL Act 1963 were issued both in Hindi and English. The Website of the company is available both in Hindi and English. Various promotional scheme including incentives for better implementation of Official Language has been adopted by our organization.
35. CITIZEN’S CHARTER, PUBLIC GRIEVANCE REDRESSAL (PG), CUSTOMER CARE SYSTEM (CCS) & RIGHT TO INFORMATION (RTI)
In line with the provisions of RTI Act 2005 to promote transparency and accountability, our organisation has taken efforts to handle the Right to Information sought for. Company has laid down procedure to provide information through Public Information Officer/CPIO and Appellate Authority.
RTI applications-Summary
The organization believes the following principles to align with the business processes.
1. Customer focus
2. Leadership
3. Utilization of resources with improved information flow within the organization
4. Process approach; &its Continual improvement,
5. Risk & opportunity and real time decisions
6. Developing internal resources & maintaining better human relations at work.
We have adopted the “Process Approach” into daily operations including the PDCA Cycle. We have considered the utilization of Risk-Based Thinking when developing, implementing, and improving the effectiveness in most of our Management System. This approach enables Hindustan Organic Chemicals Limited to enhance the overall performance of the Organization by effectively controlling the interrelationships and the interdependencies among the processes. The understanding and consistency with achieving customer specific requirements;
• The consideration of our processes in terms of added value;
• The achievement of effective process performance;
• Improvement of our processes based on real time data and information.
We also effectively plan and implement various actions to address risks and opportunities to maximize the outcomes including, but not limited to achieving improved results and preventing negative effects of our products, Operations, services.
Our businesses provide goods and services that are safe and contribute to sustainability throughout their life cycle and to promote the wellbeing of all employees, respect the interests of the stake holders, responsive towards all stake holders, especially those who are disadvantaged, vulnerable and marginalized. Our businesses respect, protect, and make efforts to restore the environment in a safe and better manner by complying with the relevant Statutory regulations. Our businesses also support and provide value to their customers and consumers in a responsible manner.
38. DETAILS OF CSR POLICY AND ITS IMPLEMENTATION DURING THE YEAR
Company since its inception is very much aware about its social responsibility. For over five decades, as a socially responsible and sensitive corporate, your Company continues to remain committed to social thought and action to serve society through providing basic civic amenities to the neighbouring villages, rendering assistance in different forms.
As the average of three immediately preceding financial year is net loss, your Company is not required to carry out any CSR activities during the year under review. However, Company has recognized its social obligations and extended the following during the year 2022-23.
The number of RTI applications received and disposed off during the year 2022-23 is given below:
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Total number of RTI applications received during the year 2022-23
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48
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Applications rejected during the year 2022-23, if any
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0
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Information submitted during the year 2022-23
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45
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Pending to reply as on 31.03.2023
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31
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* Reply to RTI application has been submitted subsequently.
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36. MICRO & SMALL ENTERPRISES
All efforts have been taken to comply with the Government Directive to procure items specified for procurement from MSMEs. Necessary procedures have been made in all tenders re-stating the eligibility of MSMEs so as to participate in tenders. We have removed the restricted clauses in the tender conditions and modified the same which will help in greater participation of MSMEs and especially SC/ST MSMEs in the procurement processes. Company has modified the purchase policy also to comply with the directions.
HOCL always takes efforts to fulfill the requirements. Our 95% of the purchases by value are petroleum products (LPG, Benzene, Furnace Oil, Hydrogen which are our raw materials.) supplied by M/S. BPCL through pipeline transfer. These items are not manufactured by MSME's and not available in GeM portal.
37. SOCIAL, ENVIRONMENTAL AND ECONOMIC RESPONSIBILITIES AND BUSINESS RESPONSIBILITY REPORT
SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 with regard to disclosure of Business Responsibility Report is not applicable to your company. However, Hindustan Organic Chemicals Limited has adopted and realizes the benefits of Management Principles into daily activities to achieve the goals of the organization. These Management Principles will provide a foundation to continually improve upon the Organization's performance.
Circulars issued to avoid single use plastic items and declared as “Plastic free zone”. Swachhta activities were conducted by different departments from 01.09.2022 onwards. Segregation and weeding out of old records, enlisting and keeping the same is still going on.
Awareness session conducted by the Company Medical Officer on Better Hygiene to the House keeping staff, Security personnel etc.
Various Competitions (in English/ Hindi/ Malayalam) were organized for the employees, apprentices/trainees &High School and College going students.
Swachhta cleaning activities done at Township with participation of wards, residents, employees and contract workers.
39. INDUSTRIAL RELATIONS:
The overall Industrial Relation situation continues to be peaceful and cordial during the year 2022-23. There was no strike or lockout during the year.
40. 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.
Consequent to the decision of the Govt. of India for closure of Subsidiary Company Hindustan Fluorocarbons Ltd., an amount of Rs.75.87 crore has been released as loan from Govt. of India to meet the expenses related to VRS/VSS to employees and settling dues to Bank and other liabilities.
41. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND PRACTISING COMPANY SECRETARY IN THEIR REPORTS
There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their audit report for the Financial Year 2022-23.
The Secretarial Auditors of the company have submitted their Secretarial Audit Report for the year 2022-23. Reply to observations of Secretarial auditors is given in the director's report.
42. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
Nil
43. 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, Corporate office and branch offices for effective and proactive services and businesses.
Board periodically reviews the internal controls, audit programme, financial results and recommendations, the replies of the management to Government Audit and internal audit etc. The Company has maintained adequate financial control system, commensurate with the size, scale and complexity of its operations and ensures compliance with various policies, practices and statutes in keeping with the organization's pace of growth and increasing complexity of operations.
44. CONSERVATION ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
A. The steps taken and impact on conservation of energy:
Major Energy Conservation Activities / Projects Implemented in 2022-23
• Replacement of conventional lights with LED lights: Electrical energy saving Rs.6.78 lakhs/year
• Replacement of Old AC with New 5star rating ACs: Electrical energy saving Rs.0.11 lakhs/year
• Replacement of conventional fan with Energy Effcient BLDC fans: Electrical energy saving Rs.0.33 lakhs/year
• Replacement of conventional motor with energy efficient IE3 motor: Electrical energy savings Rs.0.43 lakhs/year
• Contract demand reduction of Township: annual saving of Rs.1.31Lakhs/year
Company is availing open access power trading, resulting in a saving of Rs.59 lakhs on power cost for the year 2022-23.
B. Technology Absorption
The specific consumption of raw material has been reduced resulting in a saving of Rs 1330 Lakhs on Raw Material cost through an in-house technology for the year 2022 - 2023
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
C. FOREIGN EXCHANGE EARNINGS AND OUTGO: NIL
45. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY
Key Threats include:
• Competition from domestic / imports and fluctuation in the input prices
• High input costs
• High utility costs
• High overheads
• Continued availability of anti-dumping support for the main products Phenol and Acetone.
• Working Capital availability for continuous operations
• High interest cost and employee remuneration.
Some risks and concerns:
• High manpower cost per ton of finished product.
• Depreciated plants, requiring high maintenance cost.
• Dumping in main products Phenol / Acetone.
• Volatility in main input Benzene.
• COVID-19 impact on downstream industries.
46. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES WHICH HAVE BECOME OR CEASED TO BE.
Ministry of Chemicals and Fertilizers, Department of Chemicals & Petrochemicals vide No. P. 51015/06/2019-Ch. III dated 29-01-2020 informed the decision of Cabinet Committee on Economic Affairs, directing closure of Hindustan Fluorocarbons Limited, Subsidiary of HOCL, which was approved by the shareholders on 30-03-2020.
Consequent to the decision of the Govt. of India for closure of Subsidiary Company Hindustan Fluorocarbons Ltd., an amount of Rs.75.87 crore has been released as loan from Govt. of India to meet the expenses related to VRS/VSS to employees and settling dues to Bank and other liabilities.
47. DEPOSITS: NIL
During the period under review, the Company has not invited or accepted any deposits from the directors, shareholders and public
48. 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:
Nil
49. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition &Redressal) Act, 2013 ('Act') and rules made there under, the Company has adopted a Sexual Harassment Policy for women to ensure healthy working environment without fear of prejudice, gender bias and sexual harassment. The policy has been widely disseminated. A Complaint Committee is in existence as per the Act. The Board states that there were no cases or complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Annual Report for the year 2022 The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013-:
No. of complaints received: Nil
No. of complaints disposed of: Nil
No. of cases pending for more than 90 days: Nil
50. VIGILANCE MECHANISM: (Under Sec.177(9) of Companies Act,2013)
Hindustan Organic Chemicals Limited, being a Government Company, a Vigilance Department is already existing in pursuance of CVC Guidelines headed by Chief Vigilance Officer (CVO),HOCLTheVigilance Mechanism is being handled by the Vigilance Department and the Company has already adopted a Vigilance Manual in pursuance of CVC Guidelines. Vigilance Manual(latest) is available on Company's Website.
51. INTEGRITY PACT
Adoption of Integrity Pact alreadyimplemented in HOCL through two (2) no(s) of Independent External Monitor(s)to maintain, foster most ethical and corruption free business environment. The Integrity Pact Policy adopted by the Company is applicable in respect of all tenders with estimated value above Rupees Fifty Lakh (excluding export). Your Company has also conducted structured meetings of the Independent External Monitor with Chairman & Managing Director and other Executives. Integrity Pact Policy has been uploaded on the web site of the Company.
52. WHISTLE BLOWER POLICY
As per the Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as per section 177(9) of the Companies Act, 2013, every listed companies shall formulate a vigil mechanism/ Whistle Blower Policy for directors and employees to report genuine concerns. Your Company has adopted a Whistle Blower Policy to provide appropriate avenues to all permanent employees to make protected disclosure as per the whistle blower policy. The Policy provides for adequate Safeguards against victimization of employees who avail the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year in this regard. The Whistle Blower Policy is placed in the website of the company.
53. GENERAL
No disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:
• Issue of equity shares with differential rights as to dividend, voting or otherwise.
• Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
• The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
• Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future save and except mentioned above during previous year.
• No fraud has been reported by the Auditors to the Audit Committee or the Board.
• There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.
54. ACKNOWLEDGEMENT
Board places on record its gratitude to the members of the Company for their continued support and confidence in the management
The Directors thank the Company's employees, customers, vendors, investors and other stake holders for their continuous support. The Directors also thank the Department of Chemicals and Fertilizers, Ministry of Chemicals and Fertilizers, Government of India, Governments of Maharashtra and Government of Kerala, and other Government departments and agencies, Banks, financial institutions for their co-operation. The Directors regret the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic. The Directors appreciate and value the contribution made by each member of the Hindustan Organic Chemicals Limited family.
For and on behalf of the Board of Directors of Hindustan Organic Chemicals Limited
1
Extended vocational training facilities to the students of Engineering/Science/Management colleges for imparting practical knowledge.
• Advanced training imparted to students who have completed their graduation in various disciplines to equip them to take up jobs in industries.
• Factory visits are permitted for the students undergoing courses relevant to Chemical/ petrochemical industry to provide them a First-hand knowledge of the industry
• Engaged professional students of CS/CMA who have completed intermediate level as trainees for imparting practical knowledge.
• Installed 3 Nos. of Napkin Incinerators at Factory and Township Other activities.
SWACHH BHARAT ABHIYAN
Conducted various activities in connection with the SwachhtaPakhwada 2022. Cleanliness drives were conducted outside the Company also. A Cleanliness drive was conducted by HOCL employees at a nearby Government School (Govt. UP School, Puttumanoor). “A Safety awareness class for the students and parents” were also conducted and donated DCP Fire Extinguishers to the School.
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