26 Apr 2017 | Livemint.com

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Hindustan Organic Chemicals Ltd.

BSE

  • 24.60 0.80 (3.36%)
  • Vol: 71179
  • BSE Code: 500449
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    23.80
  • OPEN PRICE
    24.40
  • BID PRICE (QTY.)
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  • OFFER PRICE (QTY.)
    24.60(1968)

NSE

  • 24.55 0.00 (0%)
  • Vol: 246154
  • NSE Code: HOCL
  • PREV. CLOSE
    24.55
  • OPEN PRICE
    24.30
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  • OFFER PRICE (QTY.)
    24.55(110)

Hindustan Organic Chemicals Ltd. Accounting Policy

Report on Corporate Governance

The Directors present the Company's Report on Corporate Governance.

1. Corporate Philosophy / Main Objective on Code of Governance:

As per the Code of Governance propounded by the Government, Corporate Governance involves a set of relationships between a Company's Management, its Board, its shareholders, and other stakeholders. Corporate Governance provides a principled process and structure through which the objectives of the Company, the means of attaining the objectives and systems of monitoring performance are set. Corporate Governance is a set of accepted principles by management of the inalienable rights of the shareholders as a true owner of the corporation and of their own rule as trustees on behalf of the shareholders. It is about commitment to values, ethical business conduct, and transparency and makes a distinction between personal and corporate funds in the management of a Company. Hindustan Organic Chemicals Limited (HOCL) trusts on the conduct of its business activities and enhance the value of all those who are associated with the Company viz. shareholders, customers, suppliers, creditors, Government of India, Ministry of Chemicals and Fertilizers, Department of Public Enterprises, Various State Governments, other Governmental agencies / departments and the society at large. Essentially, it involves practicing good Corporate Governance and HOCL believes in transparency, accountability, and attaining maximum level of enrichment of the enterprise. HOCL also price the global recognition by ensuring the integrity, value addition to its domestic as also the international customers in its product commitments.

2. Board of Directors

The Board of Directors oversees all major actions proposed to be taken by the Company. The Board also reviews and approves the strategic and business plans including monitoring corporate performance.

a) Composition of the Board :

In accordance with the provisions of the Articles of Association of the Company (as amended from time to time), the number of Directors of the Company shall be neither less than three nor more than ffteen. The Directors shall not require to hold any qualification shares. As on 31-03-2015 the Board of HOCL consisted of Seven members with 4 Executive Directors, 2 Government Nominee Directors and 1 Non-Executive Director, who are acknowledged as leading professionals in their respective fields.

Company-[HOCL] is a Govt. of India Undertaking (a CPSU) and as per Company's Articles of Association, the power to appoint all the Directors on the Board of our Company vests with the Govt. of India. Therefore, as on 31-03-2015, the Composition of HOCL Board then comprised only one [1] no. Independent Director (i.e. Dr. N.J. Gaikwad), as against the requirement of 6 No.s of Independent Directors {as the Chairman is an Executive Director, 50% of the Board's Composition (i.e.4 Nos.) should comprise of Independent Directors.}. Further, the tenure of Dr. N.J.Gaikwad was ended on 21-5-2015.

With the above position of the Composition of the Board of Directors, the Company is partially complying with the provisions of Clause 49 of the Listing Agreement with Stock Exchanges, as on 31.03.2015.

 Changes in the Board of Directors.-

During the year: None.

b) Brief resume of Directors appointed, their other Directorship, Membership/Chairmanship in other Committees etc.-

During the year- 2014-15: Not Applicable.

c) Meetings of the Board :

The Board meets statutorily as also as many times as may be warranted, at its Corporate Office, Registered Office and other locations, as convenient to the Directors. The Company Secretary serves as Secretary to the Board and its Committees. Board Agenda and Material:

The Board believes that a carefully planned agenda is important for effective Board Meetings. All major issues included in the Agenda are backed by comprehensive background information to enable the Board to take decisions. The Agenda is flexible enough to accommodate unexpected development (s), which require Board's attention and its decision. Agenda papers are generally circulated well in advance to the members of the Board. The Board Members, in consultation with the Chairman may bring up any relevant matter for the consideration of the Board.

The Board of the Company met 8 times during the financial year 2014-15 on the following dates:

29/4/2014, 29/5/2014, 2/7/2014, 13/8/2014, 24/09/2014, 14/11/2014, 13/1/2015 & 12/02/2015. The Company placed before the Board, the Budgets, annual operating plans, performance of the business and various other information, including those specified in Annexure 1 of the Clause 49 of the Listing Agreement, from time to time.

e) Information supplied to the Board:

Among others, information supplied to the Board includes :

• Annual operating plans and budgets, capital budget, updates,

• Quarterly results for the Company and its operating divisions or business segments,

• Minutes of meetings of Audit Committee and other Committees,

• Important show cause, prosecution and demand notices,

• Any materially relevant default in financial obligations to and by the Company,

• Significant labour Issues,

• Compliance of any regulatory, statutory nature or listing requirements and shareholder

service such as payment of dividend and share transfer.

3. Remuneration of the Directors

The Executive Directors have been appointed by the President of India for a period of five years or till attaining the age of superannuation, whichever is earlier. The appointment may be terminated even during this period by either side on three months' notice or on payment of three months' salary in lieu thereof.

* The Company has not given any stock options.

* Non-executive Directors: The Company does not pay any remuneration to its non- executive Directors.

4. Board Committees :

The following Committees have been constituted with its own specific charter of Responsibilities. In these Committees, the Committee members play an important role in deliberations of the Meetings and visualize the enrichment of the Company through their respective expertise and Public Policy.

Presently there are 3 Committees constituted by the Board of Directors - Viz. Audit Committee of Directors, Share/Bonds Transfer /Shareholders' Bond holders'/Investors' Grievance Committee and Corporate Social Responsibility & Sustainability Committee.

I. Audit Committee of the Directors :

Board at its Meeting held on 02/07/2014 has reconstituted the Audit Committee comprises of (1) Shri Rajiv Yadav, AS&FA, Chairman of the Audit Committee (2) Dr. A.J. V.Prasad, J.S., Member of the AC (3) Dr. N.J. Gaikwad, NOID, Member of the AC (4) Shri V.B.Ramachandran Nair, CMD as Invitee (5) Shri J.N. Suryawanshi, D(M), as Invitee (6) Shri Suresh Kumar R., DF, as invitee, (7) Shri. S.B. Bhide, DT as invitee and (8) Mrs. Susheela S. Kulkarni, Company Secretary and Secretary of the Audit Committee. The other terms & reference of the said Committee remains same and unchanged.

The Committee met 4 times during the year ended 31-3-2015 on the following dates : 2/7/2014, 13/08/2014 ; 14/11/2014 ; 12/02/2015

 (i) Terms of Reference:

Apart from all the matters provided in Clause 49 of the Listing Agreement and Section 292(A) of the Companies (Amendment) Act, 2002, the Committee reviewed reports of the Internal Auditors, met Statutory Auditors periodically and discussed their findings, suggestions, internal control systems, compliance with the accounting standard, scope of audit, observations of the Auditors and other related matters. The Committee also reviewed the major accounting policies followed by the Company. The Committee invited senior executives as it considers appropriate at its meetings. CMD, Head of Internal Audit attend the meetings of Audit Committee as special invitees. The representatives of the Statutory Auditors are also invited to attend the meetings. The Company Secretary is Secretary to the Committee.

II. Share/Bonds Transfer / Shareholders' Bond holders' / Investor' Grievance Committee.

Terms of Reference:

As required under the Companies Act, 1956, the Company already has a Share Transfer Committee comprising of Shri V. B. Ramachandran Nair, CMD as Chairman (w.e.f. 17/06/2013), Shri J.N.Suryawanshi, Director (Marketing), Shri Suresh Kumar R., Director (Finance), Shri S. B. Bhide, Director (Technical) and Mrs. S. S. Kulkarni, Company Secretary, as its members. The quorum of the committee is Two Directors. Mrs. Susheela S. Kulkarni, Company Secretary is designated as the Compliance Officer and acts as Secretary to the Committee.

 Share/Bonds Transfer System:

The Company's Share/Bonds Transfer / Shareholders Grievance Committee is authorised to transfer securities as and when they are received and to redress the investor's grievances / complaints. The dematerialised shares are directly transferred to the beneficiaries by the depositories.

The Company seeks to ensure that all transfers are approved for registration within the stipulated period. With a view to expediting the approval process, the Committee meets regularly and approves all matters related to shares vis-a-vis transfers, deletion, transmission, dematerialisation and rematerialisation of shares. There was no pending complaints and requests for demat.

This Committee is vested with the requisite powers and authorities to specifically look into the redressal of shareholders and investors grievances.

The letters received from the Investors were attended/resolved to the satisfaction of the investors. The transfer of shares was effected within the stipulated time.

III. Remuneration Committee.

In view of the existence of only 1 Independent Directors on the Board, The Board pursuant to the provisions under the Articles of Association of the Company could not constitute the Remuneration Committee of the Board, during the year, 2014-15.

The Terms of Reference of the previous year's Remuneration Committee among other things included issues relating to the fixing of Remuneration of the Employees, wage related negotiations with the Employees Unions, and fixation of Remuneration of the Employees as per Govt./ DPE Guidelines , Orders etc. to put up the same to the Board for its consideration.

The Non-Executive Directors are not paid any remuneration except sittings fees for attending the meetings of the Board or Committees thereof. However, Government Nominee Directors are not paid any Sitting Fees.

IV. CSR &SD Committee.& CSR P[olicy

During the year 2014, in compliance with the Department of Public Enterprise (DPE) Guideline on Corporate Social Responsibility (CSR), Company has constituted Board level Corporate Social Responsibility (CSR) and Sustainability (SD) Committee comprising of Independent Director & other two Directors from the Board of the Company. The terms of reference of the said CSR&SD Committee included among others set up of the Committee with existence of the two tier organization structure with mandatory membership of an Independent Director on the Board level committee, frequency of meeting, range of decision, staff/ stakeholder involvement etc.

5. Disclosures:

1. There was no materially significant related party transaction with its Directors/or the Management or Subsidiary or relatives that may have potential conflict with the interests of Company at large;

2. There was no case of Non-compliance by the Company of Statutory Provisions of the Companies Act, 2013 [except Section177 (Section 292A of Companies Act, 1956) Reg: Provisions on Audit Committee] or SEBI Regulations or provisions of Listing Agreement (except Clause 49II) or any other Statutory Authority. Further, these authorities have never passed any strictures or imposed any penalties on the Company on any matter related to capital markets, during the last three years ;

3. It is affirmed that no personnel has been denied access to the audit committee;

4. Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause - are provided in this report;

6. Means of Communication

The quarterly, half-yearly reviewed and annual audited financial results are regularly posted by the Company on its website <http://hocl.gov.in> .

• These Quarterly, half-yearly reviewed and annual audited financial results of the Company are also submitted to the Stock Exchanges immediately after they are approved by the Board.

• The results are published in Regional Language (Navashakti) and English National Daily (The Free Press Journal) as per the requirements of the Listing Agreement with the Stock Exchanges.

• Management Discussion and Analysis Report forms part of this Annual Report.

• Whenever a Director is appointed or re-appointed, Stock Exchanges are intimated through Fax/

Speed Post/Courier Service.

7. General Shareholders' Information

Compliance Officer

Smt. Susheela S. Kulkarni, Company Secretary is the Compliance Officer of the Company under Clause 47 of the Listing Agreement.

Registered Office: At & Post: Rasayani, Dist. Raigad, Maharashtra 410 207.

a) Annual General Meeting :

Date & Time : 29th September, 2015 at 3.00 p.m. (Tentatively)

Venue : At Rasarang Hall, Dr.Kasbekar Park, Rasayani, Dist.Raigad 410207.

b) Financial Calender :

The Company follows April - March as its Financial Year. The Results for every quarter beginning from April, are normally declared in the month following the quarter except for the last quarter for which the results are declared by May as permitted under the Listing Agreement.

c) Dates of Book Closure (Proposed) :

(For the Purpose of Annual General Meeting)

From 22nd September, 2015 to 29th September, 2015 (both days inclusive)

d) Dividend payment date :

Not Applicable

e) Listing on Stock Exchanges :

Presently the shares of the Company are listed on The Bombay Stock Exchange Ltd., Mumbai, National Stock Exchange of India Ltd., Mumbai.

* Though the Company's shares are listed at Calcutta Stock Exchange Ltd., Company has already submitted application along with all the details for delisting of its Equity Shares from this Stock Exchange. However, the Company is still awaiting the confirmation from the said Stock Exchange.

f) Stock Code at

BSE : 500449

g) Registrar & Share Transfer Agents :

M/s Sharepro Services (India) Pvt. Ltd 13 AB, Samhita Warehousing Complex

2nd Floor, Near Sakinaka Telephone e, Exchange, Andheri - Kurla Road, Sakinaka, Andheri (E), Mumbai - 400 072

h) Demat ISIN at NSDL /CDSL :

INE048A01011

Dematerialisation of Shares and Liquidity

The shares of the Company are compulsorily traded in dematerialised mode. To facilitate the shareholders to dematerialise the shares, the Company has signed agreements with both the depositories i.e. National Securities Depository Limited and Central Depositories Services (India) Ltd. 96.67% of the share capital of the Company has been dematerialised as on 31st March, 2015 - total Accounts dematerialised is 36627 involving 64967315 35115 shares ( which constitutes 96.72% of the share capital)

Outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date & likely impact in equity - NONE/NIL

Plant Locations

Sr.No. Location :Main Product

1. Rasayani :Nitro Aromatic Complex

2. Cochin :Phenol Complex

o) Address for correspondence :-

(a) Regd.office address of the Company : P.O. Rasayani, Dist.Raigad, Maharashtra PIN -410207

(b) R&T Agents address :

M/s Sharepro Services (India) Pvt. Ltd

13 A\B, Samhita Warehousing Complex 2nd Floor, behind Sakinaka Telephone e, Exchange, Andheri - Kurla Road, Sakinaka, Andheri (E), Mumbai - 400 072

Tel : 022-67720400 / 67720401 / 67720402 Fax No. 022-28508927 / 022 - 67720416

Email: sharepro@shareproservices.com

M/s Sharepro Services (India) Pvt. Ltd

Investor Relation Centre,912, Raheja Centre, Free Press Journal Road Nariman Point, Mumbai 400 021.

Tel : 022 - 67720700