MIRA INFORM REPORT

Report Date :

01.03.2012

IDENTIFICATION DETAILS

Name :	HINDUSTAN ORGANIC CHEMICALS LIMITED
Registered Office :	Post Rasayani, District Raigad, Raigad - 410 207, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	12.12.1960
Com. Reg. No.:	11-011895
Capital Investment / Paid-up Capital :	Rs.3372.696 millions
CIN No.: [Company Identification No.]	L99999MH1960GOI011895
TAN No.: [Tax Deduction & Collection Account No.]	CHNH00307G PNEH04505E
PAN No.: [Permanent Account No.]	AAACH2663P
Legal Form :	Public Limited Liability Company. The company’s Shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer and Seller of Chemicals.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (26)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 3611000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is a well established and a reputed company having moderate track. There appears to be some accumulated losses recorded by the company. However trade relations are reported as fair. Business is active. Payments are reported to be slow. Company can be considered for business dealings with some caution.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office/ Rasayani Unit :	Post Rasayani, District Raigad, Raigad - 410 207, Maharashtra, India
Tel. No.:	91-2192-250041-47
Fax No.:	91-2192-250050
E-Mail :	sskulkarni@hoclindia.com hocras@vsnl.net investorgrievances@hoclindia.com
Website :	http://www.hocl.gov.in http://hocl.gov.com
Factory (Cochin Unit):	Ambalamugal, District Ernakulam - 682 302, Cochin, India
Tel. No.:	91-484-2720911/ 2720912/ 13
Fax No.:	91-484-2720893
E-Mail :	hoclchin@md2.vsnl.net.in
Corporate Office :	Harchandrai House, 81, Maharshi Karve Road, Marine Lines, Mumbai - 400 002, Maharashtra, India

DIRECTORS

As on 27.08.2010

Name :

Mr. Ravindra Narayanrao Madangeri

Designation :

Chairman cum Managing Director

Address :

709-710, Nestle 1, Wing - C, Pandurang Budhkar Marg, Parel, Mumbai – 400 013, Maharashtra, India

Date of Birth/Age :

20.04.1953

Qualification :

BE (Mech.) - Karnataka University, DMS (Post graduate Diploma in Management Studies from Mumbai University)

Date of Appointment :

20.06.2007

Additional Charge as CMD, HOCL w.e.f. 01.09.2010 and as Chairman and Managing Director in HOCL w.e.f. 09.06.2011.

DIN No.:

00252894

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	L25206AP1983PLC004037	Hindustan Fluoro Carbons Limited	Nominee director	01-02-08	12-11-03	Active	NO
2	L99999MH1960GOI011895	Hindustan Organic Chemicals Limited	Managing director	01-09-10	20-06-07	Active	NO
3	U24100MH1997PLC112652	HOC - Chematur Limited	Director	01-09-10	01-02-08	Active	NO

Name :

Dr. Rajagopalan Venkatraman

Designation :

Nominee Director

Address :

D-36, First Floor, Sector 30, New Delhi – 110 001, India

Date of Birth/Age :

01.09.1954

Date of Appointment :

04.05.2010

DIN No.:

03098988

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	L24110MH1978GOI020185	Rashtriya Chemicals and Fertilizers Limited	Director	28-06-10	03-05-10	Active	NO
2	L32201TN1966GOI005469	Madras Fertilizers Limited	Additional director	03-05-10	03-05-10	Active	NO
3	L99999MH1960GOI011895	Hindustan Organic Chemicals Limited	Nominee director	04-05-10	04-05-10	Active	NO
4	U24231MH1954PLC009265	Hindustan Antibiotics Limited	Additional director	18-05-10	18-05-10	Active	NO
5	U24299WB1981GOI033489	Bengal Chemicals and Pharmaceuticals Limited	Nominee director	18-05-10	18-05-10	Active	YES
6	L24129KL1943GOI000371	Fertilisers and Chemicals Travancore Limited	Director	29-09-11	12-08-11	Active	NO

Name :

Mr. Madan Verma

Designation :

Director

Address :

C-68, Friends Colony, East Kanta Kunj, New Delhi – 110 065, India

Date of Birth/Age :

02.05.1948

Date of Appointment :

08.01.2008

DIN No.:

01517154

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U15412DL1990PLC041543	Meghraj Biscuit Industries Limited	Director	01-04-91	01-04-91	Active	NO
2	U74899DL1985PTC022760	Master Pack (India) Private Limited	Director	06-05-02	06-05-02	Active	NO
3	L99999MH1960GOI011895	Hindustan Organic Chemicals Limited	Director	08-01-08	08-01-08	Active	NO
4	U74899DL2001SGC109135	Pragati Power Corporation Limited	Nominee director	18-02-10	18-02-10	Active	NO
5	U74999DL1978GOI008911	Telecommunications Consultants India Limited	Director	15-04-10	15-04-10	Active	NO

Name :

Mr. Naresh Janardan Gaikwad

Designation :

Director

Address :

A-2/104, Mhada Colony, Samarudhi Sankul, Amrawati Road, Nagpur – 440 001, Maharashtra, India

Date of Birth/Age :

22.12.1954

Date of Appointment :

16.05.2008

DIN No.:

02185462

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	L99999MH1960GOI011895	Hindustan Organic Chemicals Limited	Director	16-05-08	16-05-08	Active	NO
2	U52311MH2006PLC158928	Unijules Life Sciences Limited	Director	30-09-10	03-03-10	Active	NO
3	L99999MH1984PLC032172	Zim Laboratories Limited	Additional director	03-03-10	03-03-10	Active	NO

Name :

Mr. Jagdish Naryan Suryavanshi

Designation :

Director (Marketing)

Qualifications :

Science Graduate and Post Graduation in Management

Experience :

30 years experience in Marketing in HOCL

Date of Appointment :

30.04.2011

Director (Marketing) in HOCL w.e.f. 30.04.2011

DIN No.:

03558347

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	L99999MH1960GOI011895	Hindustan Organic Chemicals Limited	Additional director	30-04-11	30-04-11	Active	NO
2	L25206AP1983PLC004037	Hindustan Fluoro Carbons Limited	Additional director	04-11-11	04-11-11	Active	NO
3	U24100MH1997PLC112652	HOC - Chematur Limited	Nominee director	04-11-11	04-11-11	Active	NO

KEY EXECUTIVES

Name :	Mrs. Susheela Sangameshwar Kulkarni
Designation :	Secretary
Address :	Sumukha Krupa, Plot-B-8A, Row House, Sector – 16, New Panvel, Near National Complex Building, New Panvel (East), Raigad – 410 206, Maharashtra, India
Date of Birth/Age :	12.02.1964
Date of Appointment :	25.10.2001
PAN No.:	AGYPK9880E
Name :	Mr. S.D. Patil
Designation :	Deputy General Manager - Personnel

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.12.2011

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Central Government / State Government(s)	39,481,500	58.78
Sub Total	39,481,500	58.78
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	39,481,500	58.78
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	11,600	0.02
Financial Institutions / Banks	9,900	0.01
Foreign Institutional Investors	1,800	-
Sub Total	23,300	0.03
(2) Non-Institutions
Bodies Corporate	4,476,802	6.66
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	18,465,902	27.49
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	3,719,448	5.54
Any Others (Specify)	1,006,148	1.50
Non Resident Indians	872,548	1.30
Trusts	132,500	0.20
Overseas Corporate Bodies	1,100	-
Sub Total	27,668,300	41.19
Total Public shareholding (B)	27,691,600	41.22
Total (A)+(B)	67,173,100	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	67,173,100	-

BUSINESS DETAILS

Line of Business :

Manufacturer and Seller of Chemicals.

Products :

Item Code No. (ITC Code)	290711.01
Product Description	Phenol
Item Code No. (ITC Code)	291411.00
Product Description	Acetone
Item Code No. (ITC Code)	292141.01
Product Description	Aniline

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Licensed Capacity TPA	Installed Capacity TPA	Production (MT)
Nitroproducts	37380	55430	9855
Hydrogen	1200	1600	130
Aniline	12000	25100	1833
Acetanilide	4000	3000	0
Acids	73800	63000	23942
Formaldehyde	15000	33000	32038
Chlorobenzene	4400	15650	0
Acetyl Products	10500	6330	0
Caustic Soda	62700	36000	0
Phenol	40000	40000	42933
Acetone	24640	24640	26959
Hydro. Peroxide	5225	5225	5372
Propylene	29000	29000	30001
Cumene	0.00	54000	61621
Other Chemicals	1800	10750	0

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

v State Bank of India

v HDFC Bank Limited

v ICICI Bank Limited

v Central Bank of India

v Axis Bank Limited, Central Office, Capital Markets Department, 11^th Floor, "F" Wing, Maker Towers, Cuffe Parade, Mumbai – 400 005, Maharashtra, India

v Canara Bank, Kolkhe Branch, Palaspe Phata, Kolkhe, Panvel, Raigad – 410 221, Maharashtra, India

Facilities :

Secured Loans	31.03.2011 Rs. In Millions	31.03.2010 Rs. In Millions
Rupee term loans banks secured	(A) 89.493	(B) 551.229
Working capital loans banks secured	(C) 216.412	(D) 151.586
Total	305.905	702.815

Footnotes

(A) Loan from bank on cash credit account is secured by:

a. Hypothecation of the Company's entire stock of raw materials, finished goods, stock-in-process, consumable stores and spares and book debts in favour of the bank to the extent of Rs.1550.000 millions.

b. Equitable mortgage conveying 1^st Pari Passu charge over all immovable assets at factory and township situated at Ambalamugal, District: Ernakulam and 2nd Pari Passu charge over the immovable properties situated at Village Deolali, Posari, Wasambe, Parade, Savale, Turade, Dapivali and Ambivali Talukas of Panvel and Khalapur, District Raigad in the State of Maharashtra and plant and machinery, equipments, fixtures and fittings, movable machinery, spares, articles and things in the State of Maharashtra (excluding current assets).

(B) 1. Loan from bank on cash credit account is secured by :

a. Hypothecation of the Company’s entire stock of raw materials, finished goods, stock-in-process, consumable stores and spares and book debts in favour of the bank to the extent of Rs.1550.000 millions.

b. Equitable mortgage conveying 1^st Pari Passu charge over all immovable assets at factory and township situated at Ambalamugal, District: Ernakulam and 2^nd Pari Passu charge over the immovable properties specified in (1) hereinabove.

(C) Short Tem Loan from Central Bank of India is secured against pledge of Fixed Deposit

(D) Short Tem Loan from Central Bank of India is secured against pledge of Fixed Deposit

Unsecured Loans	31.03.2011 Rs. In Millions	31.03.2010 Rs. In Millions
Debts bonds other instruments unsecured	(A) 1574.400	(B) 1574.400
Other debt unsecured	(C) 28.953	(D) 34.961
Interest accrued due other debt unsecured	298.684	224.023
Total	1902.037	1833.384

Footnotes

(A) a. 1000 (Nil) Non-convertible 8.80% Taxable Bonds of Rs.1000000/- each redeemable at the end of two years with yearly interest payment. Due on 28.08.2012 b. 1000 Unsecured Bonds of Rs.10,00,000/- each are Guaranteed by Government of India for repayment of principal and interest thereupon. The Government of India Guarantee for Rs.1000.000 millions is for total Bond issue of Rs.1000.000 millions created by way of Registered Bond trust deed and the Guarantee is effective for a period of two years from 28.08.2010 i.e. date of allotment.

(B) 1. 1000 (Nil) Unsecured 6.40% Taxable Bonds of Rs.1000000/- each redeemable at the end of one year with yearly interest payment. Due on 28.08.2010

2. 1000 Unsecured Bonds of Rs.1000000/- each are Guaranteed by Government of India for repayment of principal and interest thereupon and also against equitable mortgage of flat No.511 at Nestle Apartment Worli, Mumbai belonging to the company. The Government of India Guarantee for Rs.1000.000 millions is for total Bond issue of Rs.1000.000 millions created by way of Registered Bond trust deed and the Guarantee is effective for a period of one year from 28.08.2009 i.e. date of allotment.

(C) Others payable within one year Rs.3.579 millions (Previous year Rs.6.550 millions)

(D) Others, payable within one year Rs.6.550 millions (Previous year Rs.5.866 millions)

Banking Relations :	--
Auditor :
Name :	NBS and Company Chartered Accountants
Address :	102, Symphony Building, Behind Anand Cinema, Near Manohar Mahal Building, Thane (East), Thane – 400 603, Maharashtra, India
Tel. No.:	91-22-22870588/ 0939/ 4140/ 22885229
Fax No.:	91-22-22884910
Email:	admin@nbsandco.in nbshetty@bom8.vsnl.net
Website:	www.nbsandco.in
Income-tax PAN of auditor or auditor's firm :	AAAFN5249E
Subsidiaries :	Hindustan Fluorocarbons Limited CIN No.: L25206AP1983PLC004037 1402, Babukhan Estate, Bashir Bagh, Hyderabad - 500 001, Andhra Pradesh, India Tel: 91-40-23241051 / 23237125 Fax : 91-40-23296455 E-Mail : hiflonptfe@yahoo.co.in HOC – Chematur Limited, India CIN No.: U24100MH1997PLC112652

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
100000000	Equity Shares	Rs.10/- each	Rs.1000.000 millions
270000000	8% Non-cumulative Redeemable Preference Shares	Rs.10/- each	Rs.2700.000 millions
	Total		Rs.3700.000 millions

Issued & Subscribed Capital :

No. of Shares	Type	Value	Amount
67366100	Equity Shares	Rs.10/- each	Rs.673.661 millions
270000000	8% Non-cumulative Redeemable Preference Shares	Rs.10/- each	Rs.2700.000 millions
	Total		Rs.3373.661 millions

Paid-up Capital :

No. of Shares	Type	Value	Amount
67173100	Equity Shares (Of the above 300000 Equity Shares of Rs.10/- each are allotted as fully paid up pursuant to a contract, without payment being received in cash.)	Rs.10/- each	Rs.671.731 millions
270000000	8% Non-cumulative Redeemable Preference Shares	Rs.10/- each	Rs.2700.000 millions
	Forfeited shares reissued		Rs.0.965 million
	Total		Rs.3372.696 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		3372.696	3372.696	3372.721
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		657.750	647.851	772.453
4] (Accumulated Losses)		(3127.762)	(3384.921)	(2659.142)
NETWORTH		902.684	635.626	1486.032
LOAN FUNDS
1] Secured Loans		305.905	702.815	606.479
2] Unsecured Loans		1902.037	1833.384	1707.869
TOTAL BORROWING		2207.942	2536.199	2314.348
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		3110.626	3171.825	3800.380
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1767.074	1920.064	2154.426
Capital work-in-progress		329.888	306.737	313.265
INVESTMENT		110.600	110.600	110.600
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1101.675	762.619	669.535
	Sundry Debtors	514.103	472.371	388.646
	Cash & Bank Balances	310.599	289.484	464.135
	Other Current Assets	54.835	62.242	70.342
	Loans & Advances	744.046	728.154	802.095
Total Current Assets		2725.258	2314.870	2394.753
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	437.325	349.121	389.676
	Other Current Liabilities	706.534	616.238	379.737
	Provisions	678.335	515.087	421.558
Total Current Liabilities		1822.194	1480.446	1190.971
Net Current Assets		903.064	834.424	1203.782
MISCELLANEOUS EXPENSES		0.000	0.000	18.307
TOTAL		3110.626	3171.825	3800.380

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Operating revenue, net	6673.603	4786.341	5465.370
		Other Income	405.201	143.168	550.472
		TOTAL (A)	7078.804	4929.509	6015.842
Less	EXPENSES
		Consumption materials changes inventories	3921.321	3139.216	5784.144
		Manufacturing service costs	941.196	972.395
		Employee related expenses	1196.061	901.923
		Administrative selling other expenses	290.991	261.569
		Research development expenditure	0.022	0.063
		Extraordinary items	4.466	(16.306)
		Prior period items	1.306	3.890
		TOTAL (B)	6355.363	5262.750	5784.144
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		723.441	(333.241)	231.698
Less	INTEREST FINANCIAL CHARGES (D)		208.835	232.310	221.037
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		514.606	(565.551)	10.661
Less/ Add	DEPRECIATION/ AMORTISATION (F)		257.447	265.228	268.012
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		257.159	(830.779)	(257.351)
Less	TAX (H)		0.000	0.000	3.949
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		257.159	(830.779)	(261.300)
	APPROPRIATIONS		0.000	105.000	NA
	BALANCE CARRIED TO THE B/S		(3127.762)	(3384.921)	NA
	EARNINGS IN FOREIGN CURRENCY
		FOB value of goods exported	3.643	1.269	0.301
	TOTAL EARNINGS		3.643	1.269	0.301
	IMPORTS
		Component & Spare Parts	26.631	11.544	31.278
		Raw Materials & Trading Goods	0.000	268.837	258.017
		Capital Goods	0.000	0.000	0.899
	TOTAL IMPORTS		26.631	280.381	290.194
	Earnings/ (Loss) Per Share (Rs.)		3.83	(12.35)	(3.75)

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011	31.12.2011
Type	1^st Quarter	2^nd Quarter	3^rd Quarter
Net Sales	1116.800	1600.300	1345.500
Total Expenditure	1239.100	1638.300	1482.500
PBIDT (Excl OI)	(122.300)	(38.000)	(137.000)
Other Income	16.200	24.700	22.300
Operating Profit	(106.100)	(13.300)	(114.700)
Interest	52.700	54.700	63.800
Exceptional Items	0.000	0.000	(0.100)
PBDT	(158.800)	(68.000)	(178.600)
Depreciation	65.800	49.400	57.900
Profit Before Tax	(224.600)	(117.400)	(236.500)
Tax	0.000	0.000	0.000
Provisions and contingencies	0.000	0.000	0.000
Profit After Tax	(224.600)	(117.400)	(236.500)
Extraordinary Items	0.000	0.000	0.000
Prior Period Expenses	0.000	5.600	0.000
Other Adjustments	0.000	0.000	0.000
Net Profit	(224.600)	(111.800)	(236.500)

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	3.63	(16.85)	(4.34)
Net Profit Margin (PBT/Sales)	(%)	3.85	(17.36)	(4.71)
Return on Total Assets (PBT/Total Assets}	(%)	5.72	(19.62)	(5.66)
Return on Investment (ROI) (PBT/Networth)		0.28	(1.31)	(0.17)
Debt Equity Ratio (Total Liability/Networth)		4.46	6.32	2.36
Current Ratio (Current Asset/Current Liability)		1.50	1.56	2.01

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

Incorporated in 1960 to give an impetus to the development of downstream units in sectors such as dyes, drugs, pharmaceuticals and rubber chemicals. The first unit was set up at Rasayani, Maharashtra, and subsequently, another at Cochin, Kerala (in 1988). HOC procured technologies from Japan, the UK, the US and Germany to manufacture quality products with maximum efficiency. HOC's present product line includes nitroaromatics, phenol, acetone, aniline and acetanilide. The Nov.'94 public issue was to finance its project to manufacture caustic soda, hydrogen peroxide and chlorosulphonic acid. The company has technical collaborations with Asahi Chemicals, Japan, for its caustic soda/chlorine project; with Uhde, Germany, for its hydrogen peroxide project being set up at Cochin, Kerala; and with Baxenden Chemicals, UK, for its polyurethane systems. HOC's products have been exported to a large number of countries including China, Japan, Singapore, Malaysia, the UK, the US, Switzerland, etc. The company Cochin unit has been accredited with ISO-9002 certification for its Phenol and Acetone products. The company has completed its Hydrogen Peroxide Project at Kochi well ahead of schedule, as a part of its expansion programme, HOC signed a service agreement with UOP, US, to increase the capacity of existing Phenol plant to 65000 TPA. The Cumene unit is revamped to increase the capacity from 56000 TPA to 90000 TPA. It has also commenced commercial production of Polyurethane system house project during the year 1998. The company has also incorporate a JV-HOC-Chematur Limited for setting up 20000 TPA MDI project at Rasayani at a total cost of about Rs.5000.000 millions under technology and financial tieup with Chematur Eng. AB Sweden. During 1999-2000, both Rasayani and Cochin units obtained ISO 9002 Certification by Bureau Veritas Quality international (BVQI). Cochin Unit was awarded ISO 14001 Certificate by BVQI. Government of India has decided to disinvest 32.61% of its 58.61% holdings along with a management control by sale to strategic partner. For this it has appointed A F Ferguson and co as the advisor to assist the Government for the process of disinvestment.

Results of Operations

During the year the Company was able to generate the Net profit of Rs.257.200 millions during the year, while the Net Loss during the previous year was Rs.830.800 millions.

As regards the unit wise performance, the Net Profit of Kochi Unit was Rs.1300.800 millions which was much higher as compared to the previous year’s profit of Rs.147.400 millions. The Rasayani Unit recorded a Net Loss of Rs.1043.700 millions as compared with the previous year’s loss of Rs.978.200 millions.

OPERATIONS:

During the year, the Company’s Kochi unit, achieved a sales turnover of 84082 MTs valuing Rs.5812.081 millions as against 72172 MTs valuing Rs. 3803.263 millions of the previous year.

With the production of 234684 MTs (main products) during the year 2010-11 as against the production of 221249 MTs (main products) in 2009-10, the Company could achieve an overall capacity utilization of 58% during the year. The Company has recorded the sale of 129021.09 MTs during the year (last year 125512.48 MTs) valuing Rs.6414.259 millions (last year Rs.4594.024 millions).

The high labour cost and high incidence of cost on closed plants at Rasayani unit are the major concerns. The Company has continued its cost cutting measures to counter these problems and in order to be competitive and improve performance and profitability.

PRODUCTION:

Kochi Unit:

During the year, the Company’s Kochi unit could achieve 166886 MTs of production (main products) which was higher than previous year production (main products) of 137730 MTs. The capacity utilization for the year 2010-11 was 109%.

Rasayani Unit:

During the year, Rasayani unit of the Company could achieve only 67798 MTs (main products) of production as against 83520 MTs production (main products) of the previous year. The capacity utilization for the year 2010-11 was 27%.

MARKETING:

HOC continued to enjoy support from all its valuable customers during the year 2010-11 due to excellent quality of its products manufactured at Kochi and Rasayani. It has achieved sales turnover of Rs.6673.600 millions (net of excise duty) as against Rs.4786.300 millions (net of excise duty) of the previous year. The sales volume during year 2010-11 was 1,45,173.65 MTs against 1,43,747.48 MTs for the year 2009-10, registering an increase in sales realization for the year amounting to Rs.1887.300 millions as compared to previous years sales of Rs.4786.300 millions.

STATUS OF OPERATIONS AND FUTURE PLANS

HOCL has signed the Gas transmission Agreement with M/s GAIL. With the availability of Natural Gas from GAIL, the Company has changed over the feed stock of Hydrogen from Naphtha to Natural Gas to reduce the cost of production. Further for boiler operation, natural gas is used in place of furnace oil to reduce steam cost.

Future Plans (Rasayani and Kochi Units):

Old and inefficient steam boiler at Rasayani unit is proposed to be replaced with a new one with higher efficiency. The same will be commissioned by October 2011. RLA study was completed on 2 boilers and based on the report economiser coils are to be replaced to save on the consumption of fuel. (Rasayani Unit).

Replacement of raw water pump by vertical turbine pumps based on actual water consumption and save on electrical power consumption. (Kochi Unit). Gas Transmission Agreement for compressed natural gas executed with GAIL. Conversion of both boilers and hot oil heater will be taken up to suit CNG fuel. (Kochi Unit).

Old mineral wool insulation of LPG storage sphere will be replaced by proprietary fire proof coating system to reduce heat losses. (Kochi Unit) Old and in efficient reciprocating compressor for instrument air service will be replaced by oil free screw compressor to save electrical power. (Kochi Unit)

HINDUSTAN FLUOROCARBONS LIMITED:

During the year, the sales turnover was Rs.335.242 millions as against Rs.192.706 millions in the previous year. During the year production of PTFE was 124.58 MTs as against 85.88 MTs in the previous year. Company has achieved 100% capacity utilization of CFM-22 plant and produced 1265 MT as against 940.5 MTs in the previous year. This will significantly improve the revenue from CDM. During the year, 405.49 MT of CFM-22 was sold in the market and balance quantity was used as feed stock to manufacture various products including Fluoro Speciality Chemicals.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management of Hindustan Organic Chemicals Limited (HOCL) presents its Analysis Report covering the Performance and Outlook of the Company. The Report contains business perspective and prospects based on the current environment and strategic options to steer the Company through unforeseen and uncontrollable external factors.

The petroleum feed stock prices in India is significantly higher as compared to major exporting countries. The capability of manufacturing units to earn a reasonable return has been largely affected by global competition and tightening of parameters like rationalized duty structure and strict quality controls. Moreover, the capacity in the Indian industry is small as compared to the competitors abroad, in effect the Indian Industry is in a disadvantageous position with regard to overhead costs.

In order to prevent dumping and to reform the sector to enable it to meet global competition, active follow ups is made with the Government for continuation of /levy of anti-dumping duties as per WTO Guidelines.

KEY OPPORTUNITIES INCLUDE

- Growth in certain sectors such as phenolic resins, laminates, plastics, rubber chemicals etc. in the overall markets of the country.

- High quality standard and wide spread marketing network to remain preferred supplier to large consumer all over the country.

- Growth in production/promotion of chemical industry.

KEY THREATS INCLUDE

- Availability of cheaper imported chemicals.

- Increasing input prices of feed-stock i.e. Benzene, Toluene, Naphtha, LPG, LSHS, CNG, Fuel oil etc.

OUTLOOK AND INITIATIVES FOR THE CURRENT YEAR

Both the units of the company have taken initiatives to improve the efficiency of the operating plants by implementing certain schemes like; Completion of laying of natural gas pipe line up to HOCL battery limit for the supply of gas.

Retrofitting of hydrogen plant and steam boilers to consume natural gas as feed stock/fuel.

Both the above schemes have been implemented successfully and are operational and giving satisfactory performance as expected.

Refurbishment of concentrated nitric acid plant along with capacity enhancement of di-nitrogen tetra oxide section is being taken up and is likely to be completed in the year 2011-12.

De bottlenecking of hydrogen peroxide plant at Kochi unit is also being taken up for implementation.

Implementation of voluntary retirement scheme for the surplus manpower at Rasayani unit is also planned for the year 2011-12.

An economically viable world scale grass root phenol/acetone plant is also planned for the company. The market research and techno economic feasibility study for the proposed project is underway and the report is likely to be ready in the first quarter of 2011-12.

Other feasible joint ventures with interested Corporate Bodies are also being explored.

REVIEW OF FINANCIAL PERFORMANCE:

The financial statements have been prepared in accordance with the requirements of the Companies Act, 1956 and Generally Accepted Accounting Principles.

The financial performance highlights are as follows:-

The sales turnover was of the order of Rs. 6673.600 millions against Rs.4786.300 millions for the previous year showing an increase of 39.43%. There was an Operating Profit before interest and depreciation of Rs.723.500 millions against the Operating loss of Rs 345.700 millions for the previous year. Company incurred an Interest expenditure of Rs.208.800 millions against Rs.232.300 millions of the previous year.

The outlook for the future appears to be good with the revival of economic growth. The Accumulated losses are likely to go down during the year in view of proposed implementation of several improvement plans for Rasayani and Kochi Units.

SHARE CAPITAL

a) During the year the company has forfeited 1,93,000 shares of Rs.10/- each (Rs.5/- paid up) for non payment of allotment and call monies with the approval of the Board of Directors and the amount paid towards application money in respect of these forfeited shares has been transferred to Shares Forfeiture Account.

b) The Government of India had released Rs.2700.000 millions (for financial restructuring Rs.2500.000 millions and Caustic Soda Plant recommissioning Rs.200.000 millions) against allotment of 8% Non-Cumulative Redeemable Preference Shares, thereby broadening the capital base as per the revival scheme. The 8% Preference Shares were allotted to Government of India by the Board on 28^th January, 2008, redeemable @ 20% commencing from 4th year with last redemption in the 8^th year. The first installment of (20%) i.e. Rs.540.000 millions is due for redemption in financial year 2011-12 The company has requested to the Government of India to extend redemption starting in financial year 2014-15 @ 25% each year.

c) During the year, the Unpaid Allotment Money Account and the Security Premium Account has been reconciled. As a result, it was found that an amount of Rs.0.041 million received earlier from the shareholders was credited to Unpaid Allotment Money Account, although Rs.0.028 million belonged to the Security Premium Account and Rs.0.013 million for the Miscellaneous Deposit Account. This has been set right during the year by debiting Rs.0.041 million to Unpaid Allotment Money with corresponding credit of Rs.0.028 million to the Security Premium Account and Rs.0.013 million to the Miscellaneous Deposit Account. The amount of Rs.0.013 million credited to Miscellaneous Deposit Account is subject to final reconciliation.

CONTINGENT LIABILITIES:

Particulars	31.03.2011 (Rs. in millions)
Claims against the Company not Acknowledged as debts :	Nil
i) Differential tax on account of concessional forms in respect of concessional sales	80.851
ii) Income Tax Claims	76.158
iii) Sales Tax Claim	0.570
iv) Excise Claims	21.201
v) Customs claim	1.080
vi) JNPT claim	200.799
vii) Rental claim Harchandrai House	245.775
viii) Wage revision employees	293.195
ix) Other Claims	70.137

Bankers Charges Report as per Registry

Corporate identity number of the company	L99999MH1960GOI011895
Name of the company	HINDUSTAN ORGANIC CHEMICALS LIMITED
Address of the registered office or of the principal place of business in India of the company	Post Rasayani, District Raigad, Raigad - 410 207, Maharashtra, India E-Mail: sskulkarni@hoclindia.com
This form is for	Creation of charge
Type of charge	Immovable Property Any interest in immovable property
Particular of charge holder	Canara Bank, Kolkhe Branch, Palaspe Phata, Kolkhe, Panvel, Raigad – 410 221, Maharashtra, India E-Mail: arun.govil@gmail.com
Nature of description of the instrument creating or modifying the charge	Deed of "Transfer of Interest Secured by Mortgage Deed" Loan Agreement (Both agreement constitute a single charge)
Date of instrument Creating the charge	22.02.2011
Amount secured by the charge	Rs.28.000 millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest: Interest @ 3.75% above Base Rate i.e. presently @ 11.75% p.a. shall be charged Terms of Repayment: Term Loan (ST) to be repaid in 84 equated monthly installments of Rs.0.491 million each commencing from the first such equated monthly installment to become due and payable one months after date disbursement i.e. from March 2011 Margin: NIL- This is indirect Housing Finance exposure, hence margin has been already contributed by individual borrowers availing Housing Loan from HOCL. Extent and Operation of the charge: Mortgage of property of individual employees who has availed Housing Loan from the company by Registered assignment Deed in favour of Bank. Individual Documents remain with company. Others: Limits covered Term Loan (ST) Rs.28.000 millions
Short particulars of the property charged	Company hereby transfers (assigns) in favour of the Bank its interest secured by mortgage deeds executed by concerned Employees the details of which are mentioned in the schedule in the Deed of Assignment and more particulars mentioned in Loan agreement.

FIXED ASSETS:

v Land and Land Development

v Leasehold Land

v Buildings

v Drainage, Effluent and Pollution Control System

v Water Supply System

v Chemical and Utility Plant

v R and D Plants

v Electrical Instruments, AC and Electrical Equipments

v Furniture, Fixtures and Equipments

v Railway Sidings

v Vehicles

v Library Books

v Plant held for disposal

WEBSITE DETAILS:

Company Profile

Subject was set up by the Government of India in 1960 with the objective of attaining self-reliance in basic organic chemicals needs. In fact this was the first endeavor to indigenise manufacture of basic chemicals and to reduce country’s dependence on import of vital organic chemicals. Subject started as small chemical unit, has today acquired the status of a multiunit company with two fast growing units and one subsidiary unit.

It was expected that indigenous manufacture of these chemical intermediates will give impetus to downstream industries resulting in setting up of chemical units and achieving self-sufficiency for the country in this area. This objective of setting up company has been achieved and at present more than 500 units based on the company’s products have been set up all over the country which have not only succeeded in meeting the goal of self-sufficiency but also entered the international markets earning precious foreign exchange by exporting chemicals, dyes and drugs.

Business

The company has two manufacturing units at Rasayani, District Raigad in Maharashtra and at Kochi in Kerala. The Company also has it's subsidiary HFL manufacturing unit at Hyderabad in Andhra Pradesh.

The main products manufactured by subject are Phenol, Acetone, Nitrobenzene, Aniline, Nitrotoluenes, Chlorobenzenes and Nitrochlorobenzenes. The raw materials used by subject are Benzene, Toluene, LPG, Methanol, Naphtha and Sulfur, majority of which come from petroleum refineries.

Subject provides the basic organic chemicals essential for vital industries like resins and laminates, dyes and dyes intermediates, drugs and pharmaceuticals, rubber chemicals, paints, pesticides and others, touching virtually facet of everyday life.

Subject provides the basic organic chemicals essential for vital industries like resins and laminates, dyes and dyes intermediates, drugs and pharmaceuticals, rubber chemicals, paints, pesticides and others, touching virtually facet of everyday life.

It also produces the versatile engineering plastic polytetrafluoroethylene (PTFE) through its subsidiary.

Achievements and Awards

Year	Description
1976-77 to1980-81	Export Award from CHEMEXCIL for five consecutive years.
1977	Dujodhwala Endowment Award by All India Manufacturers Organisation (AIMO for Recovery of Resorcinol from Waste Stream of MAP plant.
1979	First Prize for HOC's Annual Report (1978-79) in the 21^st National Award for Excellence in Printing and Designing by DAVP, Ministry of Information and Broadcasting, Government of India.
1980-81	"Award in the “Public Services Advertisement Category” for HOC's Advertisement captioned “Eye Appeal” for its Community Vision Project, by DAVP.
1982	Indian Chemical Manufacturers Association Award for Process Design and Process Engineering for developing know-how and installing a Detoxification plant for Solvent Extraction.
1982-83	Institute of Chartered Accountants' Shield for the best presented Annual and Report.
1983-84	"National Society for equal opportunity of handicapped (NASEOH)'s Award for being an ideal Employer.
1984	Grocery Markets and Shops Board for Greater Bombay (Mathadi) Board's Award for being an ideal Employer.
1987-88	Indira Gandhi Memorial National Award for Excellence in Public Sector Enterprises.
1988	First Prize for HOC's Annual Report 1986-87 from Association of Business Communicators of India.
1989	Certificate of Commendation for HOC Annual Report 1987-88 from the Association of Business Communicators of India.
1989	Second Prize in suggestion scheme by the Indian National Suggestion schemes Association.
1989-92	Productivity Award from Kerala Productivity Council.
1989-91	Industrial Safety Award Kerala Chapter (1998-1991) and consequently thereafter from the year.
1993-98	1993 till 1998.
1991-92	First Prize in the Chemical sector for Energy Conservation for the year 1991-92 by Government of India, Ministry of Energy, Department of Power.
1995	Dyestuff Manufacturer's Industries' Association – Industrial Pollution Control Award – 1995.
1995	Certificate of Merit by the Kerala State Pollution Control Board for Kochi unit. Second Price for Safety from the Kerala Chapter of the National Safety Council.
1995	Wisitex Foundation International Award Life 2000 (1994) for National Excellence in Industrial Pollution Abatement.
1996	The Dyestuff Manufacturers Association of India's Award (DMAI) for successful development of indigenous technology for product by a large scale unit for the year 1995-96.
1996-98	First prize award from Kerala State Pollution Control Board among large scale industries in making substantial and sustained efforts in pollution control.
1996-98	Prize for Energy Conservation in Chemical Industry by Ministry of Energy, Government of India successively for two years (1996-97, 1997-98).
1997-98	First Prize for Indira Gandhi Official Language Puraskar for the year 1997-98 for Best Implementation of Rajbhasha Hindi.
1998	Kerala State Productivity Council's Productivity Award among large Industries in Kerala – 1998.
1998	ICICI Technology Award by National Chemical Laboratory Research Foundation jointly with the Process Development and Chemical Engineering Division Team Members of National Chemical Laboratory for the Mono Chloro Benzene Expansion Project.
1999	National Energy Conservation Award, 1999 – First Prize in Chemical Sector by Government of India, Ministry of Power, New Delhi.
2000	National Energy Conservation Award, 2000 – First Prize in Chemical Sector by Government of India, Ministry of Power, New Delhi
2001	National Energy Conservation Award, 2001 – Second Prize in Chemical Sector by Government of India, Ministry of Power, New Delhi

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.48.94
UK Pound	1	Rs.77.95
Euro	1	Rs.65.94

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		26

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.